43_European_Business_Magazine_Summer_2022 by European Business Magazine

SUMMER EDITION | 2022

EUROPEAN BUSINESS europeanbusinessmagazine.com

MAGAZINE

Maximillian White THE BRITISH ENTREPRENEUR LEADING THE PACK OF THE NEW CANNABIS BILLIONAIRES CLUB

Digital transformation / Fintech / Open Finance / Real Time Data Platforms / Decarbonisation Strategies

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Table of Contents 09

News

Steering oman’s global trade revival

InterExec. Unique Network. Outstanding Talent

Driving Recovery and Sustainable Growth

Navigating the post-Brexit geographic minefield of cross-border hires

Investing in the UK

The three Cs impacting brand loyalty in the age of the digital shopper

What Real Digital Transformation In Banking Looks Like

What the Banking-as-a-Service revolution can offer retailers in 2022

Is the Government becoming too reliant on financial tech?

interview - Maximillian White The British Entrepreneur leading the pack of the New Cannabis Billionaires Club

Plan to become a ‘cryptoassets hub’ may just be the what the UK Govt needs

Facilitating open finance through secure services

Why B2B businesses should be happy

Real-time Data Platforms and ISO 20022 Drive Revenue Opportunities for Financial Institutions

Why it is long due reform

Decarbonising Strategies For Businesses to Achieve Their Net-Zero Ambitions

Preparing For The Future With Climate Intelligence

Is Elon Musk is wealthy enough to bring free speech to the tech platform

Global Coordination Could Unlock more Efficient Trade, New TradeTech Report Reveals

Factories of the future call for responsible scaling that prioritizes planet and people

A new chapter in the books of “Evolution of Money” – Central Banks Digital Currency

How Corporate sanctions against Russia are bringing a new level of social responsibility

The Proliferation of Embedded Finance

European Philanthropists Who Are Changing The World One Step At A Time

Real-time Data Platforms and ISO 20022 Drive Revenue Opportunities for Financial Institutions

NFT’s- The New Age Buzzword That Has Gotten Everyone Talking

Global Talent Shortage Threatens Growth of Fintech Sector

Personio reaches milestone giving European SMEs more ways to build efficient people processes

Bridging the gap between old and new

How employers can challenge the taboo of taking a mental health day

Ukraine- three ways businesses can adapt their models to working in an age of crises

Russia has put the rouble on a gold standard – but can it last?

Can Europe Save Europe’s Struggling Semiconductor industry?

Your business in Poland?

Four problems that private aviation needs to fix now

Stablecoins. What are they?

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Internal Communications

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EUROPEAN BUSINESS

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

FACEIT, the world’s leading platform for competitive online gaming, has today announced a multi-million dollar partnership with Cake DeFi, one of the world’s fastest growing crypto fintech platforms, which allows users to earn cash flow from their crypto. Facilitated by Pivot Agency, the collaboration will provide Cake DeFi with authentic brand exposure to all FACEIT users globally through a series of bespoke and multifaceted gaming experiences which will offer the community a chance to win crypto. This year Cake DeFi will be offering players more than half a million dollars in prizes, paid in crypto. Research suggests that 55% of the Millennials gamers own crypto as compared to just 5% of all Millennials, illustrating the natural connection between the gaming and crypto industry. The partnership with FACEIT marks Cake DeFi’s first move into the gaming and esports space. The agreement will offer the company access to FACEIT’s 25 million user base, the largest network of competitive gamers, and will offer players a unique opportunity to earn actual crypto prizes while playing. Furthermore, through Cake

DeFi’s platform and access to decentralised finance applications, they can compound their winnings and earn returns on their crypto. Michele Attisani, Co-Founder & CBO of FACEIT said: The FACEIT platform is home to the largest community of competitive gamers, which means we have a unique understanding of this audience. Our users are incredibly forward thinking and educated when it comes to crypto, so the partnership we chose had to bring tangible and substantial value to be of interest. The collaboration with Cake DeFi is much more than brand integration, and offers our community clear experiential and financial benefits which go beyond what any partnerships of this type has delivered before. FACEIT users are core gamers who spend an average of 2.5hrs a day on the platform. A recent survey of FACEIT users found that many were already interested in, and investing in crypto, showing a natural synergy between both brands and industries: • They are innovative thinkers with 66% agreeing that cryptocurrencies are the future of online transactions

• 80% have heard of Crypto • 36% invest in Crypto • 46% very Likely or Likely to use Crypto in next 12 months - 4x more likely than the general population to use Cryptocurrency for online purchases The partnership will incorporate Cake DeFi Missions, involving in-game tasks and monthly challenges for players to complete in order to win crypto prizes. It will also include Cake DeFi Weekly Tournaments which will run throughout the year and will be open to FACEIT players around the world. Players will be able to earn even greater rewards on the crypto they win when they sign up to Cake DeFi. All crypto prizes are redeemable through their Cake DeFi account, allowing FACEIT to expand its current play-to-earn offering. Speaking about the partnership, Dr. Julian Hosp, CEO and Co-Founder of Cake DeFi said, “Gamers have a natural affinity with crypto and they can now join us on the DeFi movement. Cake DeFi’s partnership with FACEIT will allow players to earn crypto while they game, and further earn returns on their crypto through our platform. In 2021, we paid out US$230 million in rewards to our customers. So it’s a win-win-win for FACEIT gamers.” Cake DeFi is the leading crypto fintech platform that provides users access to DeFi (decentralised finance) services and applications such as liquidity mining, staking and lending, which generates regular returns for users. They currently manage over $1 billion in customer assets and offer users one of the highest returns on crypto in the market, as a one stop platform that is easy-to-use, secure and transparent. Last year they paid out $230 million in rewards to customers and this year they are looking to increase this to 74% more, or $400 million, in rewards. To find out more about Cake DeFi please visit: www.cakedefi.com europeanbusinessmagazine.com 9

Brexit two years on: Over 75 per cent of project managers are concerned

APM research highlights project manager’s hopes, expectations and current concerns

esearch by Association for Project Management (APM) [apm. org.uk] has found over three quarters of project professionals still have concerns about Brexit’s impact on projects, with increased costs, disruptions and shortages among the main sources of worry. A national survey of 1,000 project managers found that 78 per cent have current concerns about Brexit, most notably: increased project costs (38 per cent), disruption to collaboration with EU partners (37 percent) and materials and equipment shortages (37 per cent). Challenges foreseen The same survey showed participants’ worries are mostly consistent with the challenges they anticipated before Brexit happened, pre-January 2020. Increased project costs and disruption to collaboration were the most commonly cited concerns at that time. Key shortages ranked fifth in their predictions (36 per cent),

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however, behind complications due to legislation and legal issues (37 per cent) and reduced access to skills and knowledge (36 per cent). Among project managers who still have concerns over Brexit, those working in construction say disruption collaborating with EU partners is their biggest Brexit-related worry. In manufacturing, shortages of materials or equipment is the main concern. Those working in healthcare point to project delays as the main anxiety. An optimistic outlook Despite current Brexit-related concerns, a similar survey commissioned by APM in July 2021 revealed the effects of Britain leaving the European Union as the second biggest opportunity for the project management profession, after new ways of working. The recent survey found the most anticipated opportunities from Brexit, pre-January 2020, to be improved access to materials and equipment

(37 per cent), reduced complications with legislation and legal issues (36 per cent), revamped supply chain management (36 per cent) and quicker project delivery (36 per cent). Adam Boddison, chief executive of APM, comments: “Through years of expertise, collated in APM’s latest study, Dynamic Conditions for Project Success [https://www. apm.org.uk/media/50481/apm-dynamic-conditions-for-project-success-2021-v2.pdf], we know the ingredients for a job well done, and they’re what have helped and continue to help the profession navigate the impact of Brexit, among the many other challenges added into the mix since January 2020. “Challenges are more manageable with strong leadership, clear communication, a diverse team, a sustainable mindset and agility. Therein lies part of the lesser recognised opportunities from Brexit: a chance to overcome adversity and be better at what we do as a result.”

Aviation innovation:

The new platform transforming private aviation

ore passengers than ever are turning to private aviation as an alternative to the stress, crowds and inconvenience of commercial flights – but modernisation is urgently needed in order for private travellers to secure the flights they need quickly. One industry innovator has set out to tackle this issue, and it’s set to transform private aviation: for brokers, operators and passengers alike. AeroBid is a new live bidding platform, launched to modernise the private charter booking process. Using data and instant communications, it brings a fast, transparent and convenient way for brokers to request charters for their clients, and for operators to receive and bid on live flight requests. For broker’s, it’s a breath of fresh air: a fast, reliable and fully transparent way to access the right flights for their clients. For operators, it’s a route to access a broader audience and tap into a growing pool of private

aviation clientele. As for passengers, it’s the best way to ensure that their brokers are securing the flights that best fit their criteria, fast: including aircraft specification, locations and added extras. It’s AeroBid’s real-time bidding that will be truly transformative for the industry, and its growing number of clients. Brokers can submit detailed flight requests, including aircraft specifications, destinations and special requests. In addition to seeing live flight requests on the Platforms Marketplace, Operators can also choose to receive instant notifications by text or email and can bid anonymously, in real-time, for the charter. With those anonymous bids being placed and received in realtime, AeroBid avoids the problems associated with static private charter marketplaces, such as price inaccuracy – ensuring that passenger requests are met quickly by brokers, with flights tailored to their needs.

The platform was designed by experienced business aviation experts, who recognised the need for an instant, data-driven bidding platform to help the industry cope with increased interest in private flights and enable everyone involved to benefit from a fully transparent request and bidding process. Zaher Deir, CEO and founder of AeroBid, comments: “Passengers need to feel like requesting and securing a charter via a broker is a quick, simple process, that is always going to result in exactly the flight specification they want: whether it’s a particular aircraft, travel time or location. With AeroBid, we’ve created a data-driven platform that benefits brokers and operators, as well as the passengers who ultimately benefit from faster bookings. We can’t wait to see the difference it makes to private aviation in the near future.” To find out more about AeroBid and how it’s set to transform the business aviation industry, visit their website or call +441865819991. europeanbusinessmagazine.com 11

UK companies attract 18% of Europe’s total investment in cleantech With over half of total investment in cleantech going to energyrelated companies, the UK is a key driver for the future of global environmental and sustainable energy sources

recent report has revealed the UK to be a leading nation in cleantech, in a year that was a recordhigh year for investment in cleantech globally. £134 billion was injected into the sector in 2021 – 4.4% higher than the previous record year of 2018. The report finds that UK cleantech attracts 18% of Europe’s total investment. Plus, almost a quarter (23%) of the 8,500 companies in Europe who create technology in renewable energy, decarbonisation, agricultural technology and related sectors come from the UK. Energy-focused industries make up three of the top five UK sectors in terms of cleantech and climate tech funding. Collectively, they’ve benefitted from over £41.5 billion in financial support since the turn of the century. The report was created by IP specialists and R&D tax credit experts GovGrant to discover which UK companies are attracting most funding for their green innovations. Cleantech companies in energy production have the highest level of investment in the UK’s green technology landscape, benefitting from over £20.16 billion in investment since 2000. Coming in second are energy asset cleantech companies – including wind and solar farms – receiving £17.99 billion. Alternative energy equipment companies – such as

manufacturers and providers of solar panels and hydroelectric equipment – also rank in the top five, attracting £3.44 billion.

The global picture: rise of cleantech investment As the case for climate change solutions becomes more and more compelling, with a recent UN report warning of irreversible change, financial support for the sector grows and grows. Data analysed by GovGrant reveals that there’s been a 2,384% global increase in capital injected into cleantech companies since 2002. This century, 3.07% of total capital invested worldwide has gone into climate change solutions. The percentage is even higher in Europe: 4%. In the UK, it sits slightly lower at 2.44%. Although the amounts invested in cleantech – when compared to investments across all areas – seem relatively modest, the number of investors is high. Worldwide, 8.33% of all investors are involved in cleantech. In the UK, the figure is 6.05%. This indicates a growing appetite for placing money in climate change solutions. Energy-related industries also dominate cleantech investment around the world. Globally, energy-related companies

Top 5 UK industries receiving cleantech investment

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receive over 43% of overall clean tech investment, with energy production receiving £305.4 billion since 2000. Adam Simmonds, investment research analyst at GovGrant, says: “As climate change action becomes increasingly urgent, it’s no surprise that investment in cleantech is soaring. However, the level of growth is still remarkable. “The strength of the sector in the UK is also really pleasing. Clearly, our cleantech sector, helped by tax credits, is flourishing. It’s going to be exciting to see where the industry goes and what rising investment can do for the future of the planet.” Tom Mason, CEO at clean energy startup Bramble Energy, says: “With the serious social pressure that has been building over the last few years for change around our impact on the planet and a focus on the need for clean air and sustainable choices, politics has had to listen and we are finally starting to see a shift in rhetoric towards clean energies and how important their role will be in the fight against climate change. Regulatory moves looking to restrict fossil fuel use are starting to be put in motion, and are only likely to grow with industry looking for matured energy technologies that can work with their needs. The great thing is the UK is already uniquely placed with its renewable resources, particularly wind to deliver a stable clean energy market for years to come.” David Hunt, founder and CEO of global cleantech sector acquisition specialist Hyperion Executive Search, says: “Put simply, founders and investors are finally seeing the massive local and global growth opportunities in clean technologies, as they are increasingly cheaper and better than dirtier, traditional alternatives. Yet the largest barrier to progress the sector is facing regardless of investment is the talent shortage. Workers are at the heart of the clean energy transition as employment in the energy sector is set to increase to 100 million by 2050. Without the people to actually drive the transition forward, longterm ambitions can’t be realised.”

ShelfNow Becomes The World’s First Blockchain-Enabled Marketplace

2B online marketplace ShelfNow announces the launch of blockchain integration throughout its intelligent platform to become the world’s first blockchain-enabled marketplace, promoting transparency, sustainability, accountability and ethical operations. In partnership with Trackgood, a New Zealand software company, ShelfNow is introducing blockchain capabilities to its platform to optimise transparency and ethical practices for its producers and buyers. By scanning a QR code on their smartphones, buyers can discover the places and faces of those involved in the supply chain. Available documents include images of the production process, profiles of those involved, quality certificates, lot numbers, and travel documents. The certified public information is counterfeit-proof due to the symbol blockchain protocol, whose operational function is a cryptographic hash that confirms authenticity. For producers, the company is launching a programme to support its producers to implement blockchain into their operations as part of its

continued efforts to support SMEs. Furthermore, buyers can also utilise the data-led marketplace to tailor their search for producers that share the same principles as them. Caffè Barbera is one of the ShelfNow producers optimising its presence on the marketplace through the introduction of blockchain transparency. Elio Barbera, Managing Director of Caffè Barbera, commented: “Blockchain has enabled us to validate our supply chain and share the journey of our coffee - from the plantation to the cup - with our customers. ShelfNow is a fantastic partner to work with as it provides us with the guidance to modernise our practices, as well as ensuring that buyers that share our ethical principles can easily find our products on the marketplace.” With a 230% rise in the number of organic, fair trade and sustainable brands on the platform over the past year, ShelfNow prioritises partnerships with ethical producers. Blockchain will enable producers to provide evidence for ethical claims in the most reliable and transparent way.

Philip Linardos, Co-founder and CEO of ShelfNow, said: “As consumers are becoming more aware and interested in ethical brands, there is a greater demand from buyers to work with transparent and ethical producers. The integration of blockchain technology will allow us to lead the way in enabling our buyers to discover like-minded producers and see proof of ethical claims that brands make. Furthermore, we are excited to be launching a programme to support our producers to introduce blockchain technology into their small businesses - something that would be difficult for SMEs without our support.” John Hussey. Founder of Trackgood said: “It is not good enough for brands to have sustainability strategies alone as they increasingly need to be showing consumers what they are doing for society and the environment. A staggering 95% of 5,300 home and family products struggle to substantiate their ethical production claims and 88% of consumers want brands to help them improve their social and environmental footprint. With Trackgood, businesses can provide transparent insights on their supply chains and showcase the positive impact they are having in supporting ethical and sustainable production.” europeanbusinessmagazine.com 13

Cambridge companies square up to innovation stagnations

New research has highlighted the challenge of maintaining innovation-fuelled growth in the new hybrid working environment. A survey of current working practices carried out by Cambridge Ahead – a membership organisation of nearly 50 major employers in the city – found widespread concern that hybrid working has reduced the opportunities for people to connect beyond their immediate team. Collaboration between teams and with other organisations was more likely to have worsened than improved. The research found a major shift to remote working with time spent in the workplace falling to 2.5 days on average in the last six months – down from 4.7 days on average before the pandemic. On average, that was expected to increase to 3 days over the next 12 months. Hybrid working was seen to have been better for the environment and for the organisation’s productivity and financial position but worse for collaboration, professional development, company culture, recruitment and some people’s wellbeing. Of those looking to boost collaboration over the next 12 months, most effort is focused on supporting culture through encouraging behaviours and 14 europeanbusinessmagazine.com

setting policies, management activities such as better co-ordination and communications, and adoption of new technology. Very few respondents were planning to change their workplace locations, create new spaces, or reconfigure interiors at this stage. Commenting on the findings, Jane Paterson-Todd, CEO of Cambridge Ahead, said: “We know that Cambridge’s strength as a high-growth economy lies in its networks between individuals and organisations, which drive cross-fertilisation and creativity. Now, as people spend more time working from home, either in the area or increasingly elsewhere in the country, the nature of the networks that have fuelled the Cambridge eco-system is changing. “It’s this kind of impact that we’re looking to spot and address through our New Era for the Cambridge Economy (NECE) project. We’re investigating how new behaviours driven by the pandemic may change the way the Cambridge economy functions, and identifying what needs to happen to put our city – and others like it – in the best position to thrive sustainably.” Dr David Cleevely, entrepreneur, Cambridge Angel and Chair of the NECE Steering Committee, said:

“Cambridge companies have a long history of achieving huge competitive advantage through innovation, from commercialising scientific breakthrough to reinventing business models. We can’t underestimate the role that chance meetings have played in Cambridge’s ability to pursue ideas that change the world. Increasingly, we may need to process engineer our serendipity, finding new ways to ensure we continue to work together, design space and connect in the city of ideas. “The NECE project is an example of influential organisations coming together in a high-growth city to adopt an anti-fragile way of thinking and operating – not just attempting to become more resilient and robust, but also seeking to use a shock like Covid to learn, adapt and improve our economy and quality of life.”

Key findings include: • Survey respondents reported employees spent 2.5 days a week in the workplace on average over the six months to November 2021 (down from 4.7 days before the pandemic). Respondents expected that to increase to 3.1 days on average over the next 12 months. • More than half of respondents reported that at least some employees were now allowed to choose where in the country to base themselves, and more than a quarter said some employees were allowed to base themselves abroad. • While just over a quarter thought collaboration within their team had improved, the same amount thought it had worsened. Getting on for half thought collaboration between teams within their organisation had deteriorated, and more than a third thought collaboration between organisations had worsened. • Respondents were optimistic about the future, expecting a positive impact on all the factors measured in due course, suggesting that people see the current time as a period of transition.

Five years on from Brexit Article 50: Are European businesses prepared for the 1 January 2023 deadline? March 29th marked the 5th anniversary since the UK triggered Article 50, beginning the process to exit the EU. Five years on, and the UK has now formally left. But for many European businesses and manufacturers, the challenges of adapting to the necessary changes are still ongoing, with some unsure of the requirements for continuing to supply goods to the UK. Adrian Rudd, from NMi, the leading measurement institute in the Netherlands, offers advice on how businesses can navigate the new regulatory processes, comply with the correct rules and adhere to deadlines.

From CE to UKCA One of the most significant changes caused by Brexit, which is set to affect many manufacturers, is the replacement of the CE marking for UK market entry. Before the UK left the EU, the CE marking was used across Europe as a guarantee to consumers that suppliers or manufacturers had met a set of standards and requirements. For nearly 20 years, the CE marking was recognisable, offering consumers peace of mind. It was a system that worked well and indeed still does in the EU. That’s why the British Government has decided to replicate this level of protection for consumers, taking the same requirements and rules to form the basis for the UK Conformity Assessed (UKCA) marking. Initially, manufacturers were expected to meet the UKCA requirements by 31 December 2021 for UK market entry. However, this was pushed back to 31 December 2022 by the UK government when it became clear, due to such challenges as the Covid pandemic, that the necessary changes would place undue pressure on the industry when trying to deal with the impacts of the global health crisis. For many manufacturers operating in the EU and UK markets, the change was made more complex as bodies registered in Europe and designated

to conformity assess against CE requirements (i.e. Notified Bodies) could not become a UKCA Approved Body. Conversely, UK-based bodies were appointed as UKCA approved bodies but lost their ability to provide CE conformity assessment services. Finding a Body able to approve both markings at the same time has subsequently become a key factor for many businesses looking to retain access to both the EU and UK. NMi, for example, has set up an office in the UK and gained the applicable UKAS accreditations, leading to its appointment by the UK government as a UKCA Approved Body. This appointment exists alongside its role as a European Notified Body based in the Netherlands.

What’s needed for both markings? The technical processes for both approvals are currently the same and require two identical tests. Depending on regulatory requirements, products may need Declarations of Conformity (DoC). Other products covered by regulations may need type evaluation, where they are tested by the Body to make sure they meet requirements, with the type being formally certified. An assessment of the manufacturing system may also follow this to ensure that products are capable of being produced according to the type evaluation and that each can meet performance requirements. Again, the

manufacturer will gain certification when the assessment is satisfactory and is then able to have the relevant markings applied to products completing the manufacturing process. As with the CE, the products covered by the UKCA are wide-ranging, varying from phone chargers and game consoles to bike helmets, sunglasses, and teddy bears. For a complete list of products and requirements, please visit https://www.gov.uk/guidance/ using-the-ukca-marking . For manufacturers selling into Northern Ireland, there is a choice of meeting CE or UKNI requirements, though the current technical requirements are the same. The most important point for manufacturers is that the time to act is now. This is particularly pertinent for manufacturers operating in the measuring instrument sector, as from April the UK National Measurement Office (NMO) will no longer provide CAB services. This means former NMO customers will now need to turn to other UKCA Approved Bodies, such as NMi, for any necessary UKCA services. It is also not yet clear what will happen, from a UK market enforcement perspective, to companies that fail to comply by the deadline. Still, it would be fitting to assume that failing to meet the requirements is not in accordance with UK regulations. At a minimum, delaying UKCA could hinder doing business in the UK. europeanbusinessmagazine.com 15

Mortgage borrowing still above pre-pandemic levels but rising rates and tighter criteria set to dampen lending Net borrowing of mortgage debt by individuals increased to £7.0 billion in March, up from £4.6 billion in February, data from the Bank of England revealed today. That is well above the pre-pandemic average of £4.3 billion in the 12 months up to February 2020. Gross lending rose slightly to £26.5 billion in March from £26.0 billion in February, while gross repayments fell to £19.7 billion in March from £21.0 billion in February. Adrian Lowery, financial analyst at investing platform Bestinvest, says that recent monthly mortgage lending data has been extremely volatile. But as can be seen from the BoE’s graph in the release, lending is still well above pre-pandemic levels, as average UK property prices have been steadily increasing - while house purchase numbers are fairly steady around the 71,000-a-month mark (compared to a pre-pandemic 12-month average of 66,700). ‘As house prices stabilise and lenders tighten their mortgage availability criteria in the coming months, the trend is likely to return closer to levels seen before the pandemic disrupted the property market in a quite unpredictable manner.

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‘A detail in the release reveals that the “effective” interest rate – the actual interest rate paid – on newly drawn mortgages increased by 14 basis points to 1.73% in March, while the rate on the outstanding stock of mortgages ticked up 2 basis points to 2.04%. Confirming that homebuyers and remortgagers are facing higher loan rates - as well as stricter borrowing rules. ‘The Bank of England’s quarterly credit conditions survey last month noted that lenders expect loan defaults to rise over the coming months and also plan to rein in mortgage lending by the greatest amount since the early days of the COVID19 pandemic. That report showed lenders expect more defaults on mortgages (as well as unsecured consumer lending and business loans) in the three months to the end of this month. ‘Despite this the bank has suggested it could dilute a required stress test that states borrowers must be able to afford a three percentage point increase in their mortgage rate. The new stipulation will be 1.5 percentage points. That might seem a contrary move given the expected upwards

path for interest and mortgage rates in the medium-term. ‘Two of the UK’s biggest mortgage lenders have tightened their criteria for borrowers seeking larger loans. HSBC now requires those who apply for a mortgage at 4.75 times their annual income to earn at least £50,000 a year, up from £40,000. Those who earn less will be limited to a maximum of 4.49 times their income - a typical limit on home loan size. ‘Nationwide meanwhile has increased the minimum salary required to apply for its “Helping Hand” mortgage range, which offers loans at up to fiveand-a-half times income. Single applicants now need to earn £37,000 (up from £31,000) and couples need to earn £55,000 (up from £50,000). ‘But, especially in the current climate of rising costs across the board, homebuyers and remortgagers should be careful not to overstretch themselves, even if a broker or lender can arrange it. A good rule of thumb is that no more than a third of total household post-tax income should be taken up by housing costs, whether that is rent or mortgage payments.’

Lufthansa Group BusinessToGo in partnership with TripActions launched as new innovative travel solution for small and medium businesses Lufthansa Group airlines and TripActions today announced an innovative, all-in-one business travel platform for small- and medium-sized companies. The pioneering, user-friendly solution provides direct access to flight, accommodation, rail, and car rental content elevated by a fast and personalized booking process that leverages advanced technology and enables access to all attractive NDC offers. With the launch, the two companies are implementing an important part of their joint vision to proactively shape the landscape for managed travel in the new, increasingly digital corporate customer relationship. “I am delighted that today we are going live with a completely new booking and servicing platform for the first time since more than a decade,” says Tamur Goudarzi Pour, Senior Vice President Channel Management at Lufthansa Group Network Airlines and Chief Commercial Officer SWISS. “We’re bringing the seamless travel experience for our corporate customers to a new industry leading level thanks to our strategic partnership with TripActions. As an emerging global leader in digital travel management TripActions is the ideal partner for us to launch this 360-degree travel solution.” Corporate clients can choose between two BusinessToGo platform tiers depending on individualized needs: an Essentials and a Premium package.

In both versions, corporate clients can access the entire range of flights from the Lufthansa Group and its joint venture partners, as well as a broad range of hotel, train, and rental car content from TripActions. Customers also benefit from enhanced policy and profile management, TripActions hotel negotiated rates, duty of care and CO 2 emissions reporting, real-time management information, 24/7 support and centralised billing, all of which enables the holistic management of a company’s travel programme. In addition, members of the Lufthansa Group’s PartnerPlusBenefit program have the opportunity to collect points directly via the booking platform and redeem them online. With the Premium package, corporate customers are offered enhanced on-boarding and support in configuring the platform if needed, in addition to access to the offers of other airlines. For the fee charged per trip in the Premium package, corporate customers can make unlimited use of the servicing support provided by TripActions. “With the launch of the new travel solution we’re providing unmanaged small and midsize corporate customers the ability to use an innovative and modern business booking platform that combines the latest technologies and a wide range of flights, hotels, and rental cars with the advantages of PartnerPlusBenefit,” adds Stefan

Kreuzpaintner, Senior Vice President Sales for Lufthansa Group Network Airlines and Chief Commercial Officer of Lufthansa Airline. “We are excited to see the results of a winning collaboration between TripActions and Lufthansa Group airlines go live after our initial announcement in December,” says Danny Finkel, Chief Commercial Officer at TripActions. “This product is a great example of the way in which world-leading technology can join with world-leading support and service to help forever change the value equation for corporate travelers. We are grateful for Lufthansa Group airlines’ pioneering vision and partnership that allowed us to build this industry-first product in such a short time.” Corporate customers can learn more on the Lufthansa Group for Business and PartnerPlusBenefit websites, and register directly at tripactions.com/ businesstogo. Lufthansa Group BusinessToGo in partnership with TripActions is available immediately in the DACH home markets of Lufthansa Group airlines (Austria, Germany, and Switzerland) as well as in Belgium and will be supplemented with further offers and functionalities over the course of the year, which includes benefits such as upgrades, corporate products and additional languages. The platform will be rolled out successively in additional markets. europeanbusinessmagazine.com 17

More Industrial Hubs to Accelerate Their Net-Zero Transition

Davos-Klosters, Switzerland, 24 May 2022 – Four leading industrial clusters in the Netherlands, Belgium and the US today announced that they are working together with the World Economic Forum to reduce their carbon emissions faster through the Transitioning Industrial Clusters towards Net Zero initiative. Launched at COP26 in November 2021, the initiative aims to accelerate the decarbonization of hard-toabate industrial sectors, while maximizing job creation and economic competitiveness. The approach focuses on building cross-industry and cross-cluster partnerships to better implement low-carbon technologies – as in the case of the regionally developed Basque Hydrogen Corridor – and on accessing public funding and blended-finance options for clusters’ decarbonization projects. Under this initiative, the World Economic Forum, working closely with 18 europeanbusinessmagazine.com

Accenture and the Electric Power Research Institute (EPRI) as knowledge partners, connects private and public stakeholders to assess how to meet individual and collective decarbonization goals, fosters new enabling policies and provides guidance and support for local community engagement. Industrial clusters are geographic regions where industrial companies are concentrated, making them an attractive target for impactful emissions reduction strategies. Since industrial assets are located in close proximity of each other, sharing of infrastructure (such as CO2 and hydrogen pipelines or renewable energy assets), financial and operational risks, and natural and human resources becomes possible. This also provides opportunities to deploy and scale new green technologies, such as hydrogen and the capture, utilization and storage of carbon for industrial

applications, enabling a systemic approach to emissions reduction. The clusters joining the initiative are: • Brightlands Circular Space, together with Brightlands Chemelot Campus, Chemelot, and the Chemelot Circular Hub in Geleen, Netherlands. It will help accelerate the energy transition and circular economy. • H2Houston Hub, formed through the Center for Houston’s Future and encompassing more than 100 organizations and companies. It will leverage the Houston area’s position as the US’s largest hydrogen producer and consumer, and use innovation and scale to reduce the cost of clean hydrogen and emissions. • Ohio Clean Hydrogen Hub Alliance, with approximately 100 corporate, governmental and community organization members. It will lead the region’s campaign to

establish a clean hydrogen hub in the state of Ohio, US. • Port of Antwerp-Bruges, Europe’s second-largest port. It will drive the circular economy and energy transition. These four large industrial emissions centres, involving oil and gas extraction and processing, shipping, heavyduty transportation, chemicals and other sectors, currently account for CO2 emissions of 296 million metric tonnes per year – greater than the annual emissions of Poland. They employ more than 470,000 people and represent an annual gross domestic product (GDP) of $135 billion. “Supporting industrial clusters and corporate partners in the development and implementation of their netzero strategies is at the heart of what we do,” said Roberto Bocca, Head of Energy, Materials and Infrastructure Platform, World Economic Forum. “We are proud to leverage our collaborative platform and expertise in partnership building to grow the clusters initiative as well as other decarbonization efforts we support, such as the First Movers Coalition, Mission Possible Partnership and Clean Hydrogen Initiative.” The four new clusters join four others in the UK (Zero Carbon Humber and Hynet North West), Australia (Kwinana Industries Council)

and Spain (Basque Net-Zero Industrial Supercluster), which were part of the initial launch of the initiative. Based on metrics provided by each cluster, all eight clusters could potentially save more than 334 million tonnes of CO2 – more than the equivalent annual emissions output of France. They could also create and protect 1.1 million jobs and contribute $182 billion to regional GDP. “The Ohio Clean Hydrogen Hub Alliance seeks to locate a clean hydrogen hub in the state of Ohio, leading to the eventual decarbonization of much of the transportation, electricity, industrial and heating sectors,” said Kirt Conrad, Co-Founder, Ohio Clean Hydrogen Alliance and Chief Executive Officer, Stark Area Regional Transit Authority. “Investment into a clean hydrogen hub in Ohio will help create massive economic, environmental and health benefits for the state and its citizens.” “With our focus on becoming the premier circular ecosystem in Europe, it is of upmost importance that we foster competitive collaboration between the companies in our cluster as well as with other global clusters,” said Lia Voermans, Director Brightlands Circular Space, “We believe that this initiative provides a gateway to access the best practices and processes supporting industrial decarbonization.”

The new clusters are already actively advancing their decarbonization journey. For instance, the Port of Antwerp-Bruges is starting to convert hydrogen into sustainable raw materials and fuel for the port’s chemicals sector, whereas the Ohio Clean Hydrogen Hub Alliance has developed hydrogen fuel cell buses which tour around the US, educating transit authorities on the potential and viability of clean transportation. However, to achieve net-zero emissions, these efforts must be scaled up. Often, financial mechanisms, rather than technology, are the main roadblock, and policy frameworks to support valuable future technologies are lacking. As value chains are transformed, the creation of new partnerships will be key. “The Houston region has the talent, expertise and infrastructure needed to lead the global energy transition to a low carbon world,” said Brett Perlman, CEO of the Center for Houston’s Future. “Clean hydrogen, alongside carbon capture, use and storage are among the key technology areas where Houston is set to succeed and can be an example to other leading energy economies around the world.” “The Port of Antwerp-Bruges hosts Europe’s largest chemical cluster and supports the European Green Deal to become climate neutral by 2050,” said Jacques Vandermeiren, Chief Executive Officer, Port of Antwerp. “To reach this goal we will all have to work together with respect for individual company needs, industry characteristics and timing. The Transitioning Industrial Clusters towards Net-Zero initiative is a means to inspire and incentivize companies to share best practices in our common pursuit of staying well below 2°C.” In addition to the eight clusters currently involved in the initiative, more than a dozen in the US, Europe and the Asia-Pacific region are also in the process of joining. The aim is to build a community of 100 global industrial clusters to accelerate industrial decarbonization. To learn more or to participate in the cluster initiative, visit https://initiatives.weforum.org/transitioning-industrial-clusters/home. europeanbusinessmagazine.com 19

New Initiative to Strengthen Cross-Border Investment in the Digital Economy Davos-Klosters, Switzerland, 25 May 2022-A pioneering effort to facilitate cross-border investment in the digital economy was launched this week at the World Economic Forum Annual Meeting 2022. The new initiative on digital foreign direct investment, the Digital FDI initiative, will implement projects in several countries to help grow Digital FDI, as the reforms to attract such investment must take place at a country level. The first digital FDI project will take place in Nigeria. Over the past few years, the Forum has worked to find the right partners to guide the work, develop principles published in the white paper launched 20 europeanbusinessmagazine.com

in 2020 and share the potential for cooperation at the G20 and other platforms of corporation. Attracting Digital FDI requires creating digital-friendly investment climates through targeted and country-specific policies, regulations and measures. These investments involve new business models, often based on data and technology, and platform economies, as well as using non-traditional assets. The Digital FDI initiative will aim to identify and implement enabling reforms through public-private projects in emerging markets and developing countries. “Global FDI is rebounding, following the COVID-19 pandemic, and investment

in the digital economy could not come at a better time. These country projects will help grow FDI into the digital economy, which is key for long-term growth, competitiveness and sustainable development”, said Børge Brende, President, World Economic Forum. The Digital FDI initiative will be delivered as a joint effort between the World Economic Forum and the Digital Cooperation Organization (DCO), a new international organization that seeks to enable digital prosperity for all. “As the first and only global multilateral focused on enabling digital prosperity for all, the DCO is partnering with the Forum on a Digital Foreign Direct Investment initiative to help countries develop digital FDI-friendly investment climates. We invite digital innovators with a commitment to economic development and inclusion to join us," said Deemah Al Yahya, Secretary-General, DCO.

Unlocking the Triple Returns from Social, Tech and Green Jobs New insights and initiatives at the World Economic Forum’s Annual Meeting 2022 seek to launch a jobs recovery to strengthen resilience and dynamism in economies, businesses and societies in the midst of a turbulent outlook. Investing in education, health and care jobs can yield a triple dividend – boosting economic activity, expanding employment opportunities and generating social mobility. New modelling of the United States economy suggests that investing $1 in social jobs would yield a $2.3 return. The model estimates that $1.3 trillion in the social jobs of tomorrow could unlock $3.1 trillion in GDP returns and create 11 million jobs by 2030. These jobs include 4.2 million teaching jobs, 1.8 million jobs for personal care and service workers, and 900,000 jobs in healthcare. These are the key findings of the World Economic Forum’s new report Jobs of Tomorrow: The Triple Returns of Social Jobs in the Economic Recovery, published at the World Economic Forum Annual Meeting 2022 today. Developed in collaboration with Accenture, the report finds that the associated increases in productivity, increased GDP and tighter labour markets will lead to a parallel increase in real wages. Aided by technology and better skills, the jobs of tomorrow have the potential to lift living standards globally. After more than two years of turmoil in the global economy and a continued uncertain outlook, leaders need to support workers in pivoting towards a future which works for everyone. Higher wage, higher-quality, future-ready jobs are possible and benefit companies, workers and economies alike. Good Work in the New Economy As many employers and workers seek a “new normal” after the disruptions of the past few years, there is an opportunity to develop a new vision for the future of work, one that is ready for the new economy and society. Five key issues have emerged that need to be addressed to ensure better work for workers and employers alike: volatility in wages and the cost of living;

divergence on the demand for flexibility; silent pandemic in well-being; an erosion of diversity, equity and inclusion gains; and the need for a reskilling revolution. The Good Work Framework, a second report released at the Annual Meeting, drawing from the views of employers, unions and experts and developed in collaboration with Mercer, proposes enhancing job quality through five objectives and associated goals: promote fair pay and social justice; provide flexibility and protection; deliver on health and well-being; drive diversity, equity and inclusion; and foster employability and learning culture. The Jobs Consortium To support this broad agenda and to mobilize the required investments globally, the first meeting of the Jobs Consortium was held at the World Economic Forum’s Annual Meeting in Davos. The initiative comprises CEOs and ministers championing productive employment, growth in the jobs of tomorrow, new standards in the workplace and better wages for all. Underpinning the Jobs Consortium is a shared understanding of the need to expand opportunity and quality in the jobs of tomorrow, with a particular focus on social, green and tech jobs as the high-growth, job-creating sectors of the future. The initiative is supported by insight products, action frameworks and a collaboration

platform, which develop expert knowledge to drive tangible change, and will work closely with initiatives on developing skills for the global workforce. Refugee Employment and Employability Refugees are a particularly vulnerable group, often excluded from the labour markets of host economies. Over 6 million refugees have left Ukraine since February 2022, adding to the estimated 31 million people worldwide who have been forcibly displaced across borders. As businesses mobilize to assist refugees with integration into host communities and workforces, the World Economic Forum’s Chief Human Resources Officers community, drawn from over 140 organizations, has launched a Refugee Employment and Employability Initiative. The initiative will pilot its work with supporting learning and job opportunities for Ukrainian refugees in Europe in its first phase and draw best practices to build a methodology for supporting system-wide global support from employers for refugees. “Our ambition is to lead with action and we know that refugees bring a broad set of skills, experience and perspectives that benefit societies and businesses. Helping people find work isn’t just a humanitarian effort, it’s also good for business,” said Jesper Brodin, CEO of Ingka Group. europeanbusinessmagazine.com 21

Private Sector Sends Powerful Market Signal to Commercialize Zero-Carbon Tech, as Key Coalition Tops 50 Members The First Movers Coalition, a flagship public-private partnership to clean up the most carbon-intensive industry sectors, from heavy industry to long-distance transport, announced today a major expansion to more than 50 corporate members worth about $8.5 trillion and a total of nine leading governments, including the US, covering over 40% of global GDP. US Special Presidential Envoy for Climate John Kerry made the announcement alongside Bill Gates, founder of Breakthrough Energy, at a press briefing hosted by the World Economic Forum. Led by the World Economic Forum and the US Government, the First Movers Coalition targets sectors including aluminium, aviation, chemicals, concrete, shipping, steel, and trucking, which are responsible for 30% of global emissions – a proportion expected to rise to over 50% by mid-century without urgent progress on clean technology innovation. For these sectors to decarbonize at the speed needed to keep the planet on a 1.5-degree pathway, they require low-carbon technologies that are not yet competitive with current carbon-intensive solutions but must reach commercial scale by 2030 to achieve net-zero emissions globally by 2050. To jump-start the market, the coalition’s members commit to purchasing – out of their total industrial materials and long-distance transport spending – a percentage from suppliers using near-zero or zero-carbon solutions, despite the premium cost. If enough global companies commit a certain percentage of their future purchasing to clean technologies in this decade, this will create a market tipping point that will accelerate their affordability and drive long-term, netzero transformation across industrial value chains. Today, the First Movers Coalition launched a major expansion across three dimensions: 22 europeanbusinessmagazine.com

1. New corporate members Global technology giants Alphabet and Microsoft, along with AES, Aveva, Ball Corporation, BHP, Consolidated Contractors Company, Ecolab, Enel, EY, FedEx, Ford Motor Company, HeidelbergCement, Mitsui O.S.K. Lines, National Grid, Novelis, PWC, Schneider Electric, Swiss Re and Vestas are new members. With this expansion, coalition membership exceeds 50 companies, with a collective market value of about $8.5 trillion – or more than 10% of the Fortune Global 2000. 2. New government members In addition to the US Government, the coalition welcomes India, Japan and Sweden to the Steering Board, as well as Denmark, Italy, Norway, Singapore and the United Kingdom as government partners. These government partners will invite companies from their countries to join the coalition and will pursue public policies to commercialize the green technologies corporate members commit to purchasing. 3. New sector commitments The coalition is launching two new sectors: carbon dioxide removal and aluminium, which join the four existing sectoral pledges (aviation, shipping, steel and trucking) launched at COP26. Carbon dioxide removal • Alphabet, Microsoft and Salesforce have collectively committed $500 million to carbon dioxide removal (CDR). Microsoft will further serve as an expert partner by sharing lessons from its carbon removal auctions. • Boston Consulting Group (also the First Movers Coalition Knowledge Partner) commits to removing 100,000 tonnes of carbon. • Three additional companies have each committed to 50,000 tonnes or $25 million of carbon removal: AES, Mitsui O.S.K. Lines and Swiss Re.

• All members must deliver on their commitments by 2030 and demonstrate that the carbon can be stored for more than 1,000 years. • Members’ carbon removal purchases will be supported by implementation partners, including Breakthrough Catalyst, Carbon Direct, Frontier and South Pole. • Why CDR? Carbon dioxide removal is the process of removing carbon dioxide from the atmosphere and locking it away. The latest Intergovernmental Panel on Climate Change (IPCC) report emphasizes that due to a lack of progress on emissions mitigation to date, limiting the global temperature rise to 1.5°C will now be impossible without carbon removal solutions.

Aluminium • Ball Corporation, Ford Motor Company, Novelis, Trafigura and Volvo Group are founding members of the coalition’s new aluminium sector, committing to have near-zero carbon emission from 10% of their primary aluminium purchases by 2030. This can only

be achieved by producers who use advanced technologies that are not yet commercially available. • Why aluminium? Aluminium represents 2% of global emissions.

Quotes • US Special Presidential Envoy for Climate John Kerry said: “The purchasing commitments made by the First Movers Coalition represent the highest-leverage climate action that companies can take because creating the early markets to scale advanced technologies materially reduces the whole world’s emissions – not just any company’s own footprint. With today’s expansion, the coalition has achieved scale across the world’s leading companies and support from committed governments around the world to tackle the hardest challenge of the climate crisis: reducing the emissions from the sectors where we don’t yet have the toolkit to replace unabated fossil fuels and swiftly reach net-zero emissions.” • Børge Brende, President of the World Economic Forum, said: “The

coalition’s members are truly the ‘First Movers’ who are focused on scaling disruptive innovations that pave the way for long-term transformation rather than the lower-hanging fruit of short-term process efficiency gains. Once the tipping point is reached in the market, the First Movers Coalition will demonstrate that a net- or nearzero transformation across the value chain is not only possible but that it will be no more expensive than the high-emitting alternative.” • Mikael Damberg, Swedish Minister for Finance, said: “Sweden is proud to be joining the First Movers Coalition as a government partner. With a number of Swedish business actors already members of the coalition, we look forward to encouraging more actors to join as well as supporting the development of innovative solutions to facilitate the transition to net-zero globally. The Swedish experience shows that the transition paves the way for new jobs and strengthened competitiveness. The First Movers Coalition will accelerate this global movement.” • Piyush Goyal, Minister of Commerce and Industry, Consumer Affairs, Food & Public Distribution and Textiles of India, said: “India has been at the forefront of climate change actions. The idea of LIFE – “Lifestyle For Environment” – as highlighted by Prime Minister Narendra Modi and the call for a global mass movement on sustainable lifestyles, is very critical for combating climate change. India has also taken global leadership with initiatives like the International Solar Alliance, One Sun One World One Grid, and the Coalition for Disaster Resilient Infrastructure. We believe that the need of the hour is to strengthen technological innovation so as to have cost-effective climate technologies on a larger scale. The First Movers Coalition has a huge role to play in this and to achieve our climate goals.” • Koichi Hagiuda, Japan’s Minister for Economy, Trade and Industry, said, “Japan will be a ‘First Mover’

country to become a strategic partner country of the First Mover Coalition. Japan will contribute to the creation of initial demand for the critical technologies needed for the green transformation. Japan will also actively promote the supply of critical technologies in which it has strengths and work on the development of the necessary standards.”

Explainer: Harnessing value chains to reduce the green premium of innovative technologies The majority of decarbonization required across the seven so-called “hard-to-abate sectors” (aluminium, aviation, chemicals, concrete, shipping, trucking and steel) – as well as the negative emissions needed for net-zero through carbon dioxide removal – cannot be achieved by the incremental efficiency gains offered by existing materials and technology solutions. Today’s most commercially competitive clean energy technologies, such as renewable wind and solar energy, are decarbonizing the electric power system; but on their own they cannot clean up steelmaking, shipping, aviation and other hard-to-abate sectors. The necessary technological solutions – including green hydrogen produced using renewable energy, clean ammonia and near-zero carbon aviation fuels and technologies – are not yet commercially competitive. Yet, it is essential to bring them to market by 2030 to achieve global net-zero emissions by 2050. The First Movers Coalition was inspired by the success of advance market commitments in driving innovation in other fields, from life-saving vaccines to commercial spaceflight. The coalition’s technical commitments were developed in close consultation with the sector Champions, the Design Committee and Expert Members, the Mission Possible Partnership, the Boston Consulting Group (First Movers Coalition Knowledge Partner), and Breakthrough Energy (First Movers Coalition Primary Implementation Partner). europeanbusinessmagazine.com 23

A new report from Netcel, Optimizely and Siteimprove has found that senior business leaders are no longer thinking in terms of digital transformation. Instead, more than two-thirds (68%) are moving to constant evolution and iteration to embrace change, suggesting that digital evolution is likely to replace digital transformation as a more effective method for businesses to adapt to and embrace today’s constantly evolving commercial landscape. Research carried out by independent agency, London Research, questioned more than 300 C-suite executives about their attitudes towards digital transformation and how it relates to their business. 24 europeanbusinessmagazine.com

The findings, published today in ‘From Digital Transformation to Digital Evolution: Survival of the Quickest’, demonstrate that business has entered a period when thinking in terms of digital transformation isn’t enough. Instead, organisations need to achieve a state of continual evolution and constant awareness of – and response to – changes in technology, customer behaviour, and the competitive environment.

Key Survey Findings The report found that, in a rapidly changing world, many organisations don’t have a shared view on what their digital experience should be achieving

for business and customers and are struggling to keep up with the pace of change: skills are in short supply, insights aren’t clear, decision-making is arbitrary, and experimentation is not widespread, understood or encouraged in a systematic way. Additional survey findings include: Everything is digital: A significant number of respondents have abandoned the idea of ‘digital’ as something separate from the rest of the business, with two-thirds (64%) saying everything they do is digital. Digital transformation is a state of readiness: Digital-first businesses are less likely to see digital transformation as a fundamental organisational change (42%) compared with offline

businesses (50%). Combined with their enthusiasm for Web 3.0, more than half of these digital-first businesses see digital transformation less as a journey with a defined end point, and more as a state of readiness for whatever technology might throw at them next. More opportunities for marketing and martech to improve the digital experience: The survey found that marketing’s potential to transform the digital experience is not being used to its full potential with almost half of respondents saying they are unable to focus on continual improvement. Sixty-six percent of respondents say their marketing technology enables them to tailor and personalise digital experiences to individuals or segments, yet 44% feel that their marketing technology would benefit from greater development and 34% don’t have a marketing technology stack that is seamlessly integrated in a way that breaks down organisational silos. “The passing of time has revealed that, while digital transformation can be successful to create short-term wins, digital transformation alone is only the first step to achieving true digital excellence. Instead, to achieve true and sustained digital excellence, digital transformation needs to be followed by the highly complex and ongoing process of digital evolution. This report produces fascinating insights into how organisations are evolving and reshaping themselves to create digital experiences that are high performing over the long term,” noted Tim Parfitt, CEO of digital product consultancy, Netcel. “Over the past two decades, digital has proved itself to be the theatre for the most exciting, innovative and disruptive commercial and social initiatives to impact how we shop, connect, build relationships, become more efficient and grow our businesses,” commented Dom Graveson, Experience & Strategy Director at Netcel. “This report has been designed to take the temperature of where we stand in 2022, after many years of discussing the concept of digital transformation as a strategic goal to enable these benefits. It asks how far we have

come, whether we feel equipped for an uncertain, dynamic and exciting future and, most importantly, where do we go next to discover, create and optimise differentiating digital product experiences that benefit our customers and audiences, our organisations, and our wider environment.” The research also showed that respondents felt that technology is not widely thought to be prepared for the challenges ahead: systems struggle with shared data, analytics and a single customer view. Integration is an issue, and evolution and rollout of enterprise architecture may be a challenge. On top of that, martech is often owned by the IT department, which may lack cooperation with marketing, front-line services, and data and insights teams. “While the digital landscape is constantly evolving due to changing consumer behaviours, companies must adopt new marketing strategies to keep up with the digital evolution. The ones who will thrive are those that recognise the importance of building a digitally fluent culture,” said Shane Paladin, CEO of Siteimprove. “Our core mission at Siteimprove is to help marketers meet their goals at every stage of their digital maturity,

continuously evolve and progress. By building richer, deeper, more complete digital experiences, we’re part of the movement toward an internet that’s built for everyone.” “The report confirms that digital transformation is an antiquated mindset for marketers. Marketing is not a destination but a journey. Successful marketing organisations must be built for the journey of constant improvement and adaptability otherwise they will fall behind,” said Kevin Bobowski, CMO at Siteimprove. Alex Atzberger, CEO of Optimizely, commented, “Our findings draw a clear conclusion for many who continue to think their digital transformation is complete: in fact, businesses are often only talking about systems and processes rather than the broader organisational and cultural integration that reflects true and durable digital maturity. In other words, many businesses are ‘digitised’ rather than truly ‘digital’.” The research was carried out by independent agency, London Research, during March and April 2022, who questioned more than 300 C-suite executives about their attitudes towards digital transformation and how it relates to their business. europeanbusinessmagazine.com 25

Steering oman’s global trade revival With its Strategic Location, Advanced Infrastructure, and Plenty of Incentives for Doing Business, it’s No Wonder Sohar Port and Freezone is at the Peak of Oman’s Current Trade Revival

ositioned right at the crossroads between Europe and the Far East, Oman has long been a global centre for trade, dating back thousands of years. With its stable economy, strong infrastructure and peaceful and tolerant culture, it might be one of the lesser-known countries of the region, but provides an extremely favourable climate for those wishing to do business, not to mention its incredible touristic appeal. As set out in the Oman 2040 Vision, the country is actively seeking foreign direct investment, particularly in high value-added and non-oil sectors, and is in the process of improving the regulatory framework to encourage such investments. Its new Foreign Capital Investment Law came into force in January 2020; a highly significant legislative development that removes most legal restrictions on the foreign ownership of Omani companies. Having jumped ten places in the Ease of Doing Business 2020 report, Oman now ranks at the top in the Gulf Cooperation Council (GCC) countries in the cross-border trade index, a positioning that is in no small way supported by SOHAR Port and Freezone. The logistics behemoth is on a journey to revive Oman’s standing as an international trade hub.

AN AWARD-WINNING PORT Established in 2004 as a joint venture between the Omani government and the Port of Rotterdam, SOHAR Port and Freezone is not only one of Oman’s mega-projects, but is also one of the fastest-growing complexes of its kind in the world and a major industrial hub. Today, with 26 europeanbusinessmagazine.com

seven out of 10 products that Oman buys or consumes coming through SOHAR, it serves as the main gateway for import and export and contributes 2.8% of the country’s GDP. With a focus on sustainability and cutting-edge technology, it is leading the development and modernization of the country’s logistics infrastructure, while offering unrivalled access to key markets in Europe, Africa, Asia and the Americas, as well as across the Middle East. Facing the Arabian Sea and with direct access to the Indian Ocean, the world’s largest ships are able to dock without having to navigate the Strait of Hormuz, the only waterway between the Persian Gulf and open ocean where one-third of the world’s liquefied natural gas and 25% of total global oil consumption passes through. SOHAR’s rise to prominence over the last 18 years has no doubt been impressive. Since the Freezone was added in 2010, the complex has grown to 21 million square metres – all fully leased ahead of schedule – with a further 2.5 million square metres currently being added and even more space primed for development at a later stage. The efforts to optimise every step of the process has been recognised within the industry. SOHAR has been a frequent winner at fDi Magazine’s annual Free Zone of the Year awards, including taking the ‘New Investments Award’ and commendations for Infrastructure Improvements and Energy Independence in previous years. SOHAR was also named the world’s best dry bulk port in 2018 at the IBJ Awards and the annual index 2020 released by the United Nations Conference on Trade and Development named

Oman’s ports as the world’s fastest in container ship handling. Meanwhile, during a period of global uncertainty, the Port has continued to operate at full capacity throughout and welcome new tenants to the Freezone, as well as seeing throughput grow quarter on quarter, year versus year.

A FLOURISHING FREEZONE Conveniently connected to the Port via a bonded transport corridor, the Freezone offers sector-specific zones and clusters, and integrated, bespoke logistics solutions across

INCENTIVES IN ABUNDANCE

the value chain, with warehousing and cold storage facilities available. As with any other industrial zone, SOHAR continues to experience a rapidly rising energy demand, but this has been anticipated. The company joined forces with Shell to co-develop onsite solar power projects to harness solar power within a dedicated 600-hectares solar PV project area and create long-lasting economic value for Oman and the companies in the Freezone. Over the last year, SOHAR has ramped up its efforts to attract investors, taking advantage of Oman’s burgeoning trade relations with developing

countries like China and India. With an abundance of space readily available and filling up fast, some 26 companies are already reaping the benefits of unrivaled access to land, low-cost energy, and a skilled workforce. SOHAR is currently home to logistics, petrochemicals and metal clusters that provide downstream industries with iron, steel, plastics, marble, fertilisers, quartz and chemicals. Moreover, its new Food Zone boasts the region’s first dedicated agro-terminal offering an ideal, close-to-market base to import, process, package and distribute fresh food products to the region and beyond.

But there is more to entice investors than SOHAR’s abundance of energy, raw materials and world-class logistics, like generous incentives for local and international partners. The Freezone allows 100% foreign ownership with 0% personal income tax and 0% import or re-export duties. Companies can enjoy a guaranteed 10-year exemption from corporate tax, normally 12% in Oman, and this can even be extended to 25 years. It has cultivated an environment where business can flourish and prosper by providing a One-Stop-Shop for investors to set up and operate their businesses effectively. The Freezone supports tenants with company registration, licensing and permits, as well as tax exemption certificates and customs registration. Everything a company requires to get started and begin trading with the world. Until the end of 2022, new and renewing tenants can also purchase a General Trade Licenses (GTLs) for one, two or three years at up to 50% of the usual cost. SOHAR is also offering a complete working solution for companies looking to relocate to the complex through its commercial office partner, Corporate Parks, which offers a reduction of between 30% and 45% in office rental rates for up to three years. The new offers are designed to encourage investment in SOHAR across all sectors and provide the spark for existing businesses to take the next step in their development. Companies can enjoy all of the benefits of working and trading in the Freezone with added flexibility and greater cost-efficiency. With competitive rates starting from one to three years, companies can register for a SOHAR GTL electronically from anywhere in the world and secure all required permits through the One-Stop-Shop. With its eyes set on the future, SOHAR has strategically set its course to capitalize on its location, resources and competitive edge as well as invest in new technologies to cement Oman’s leadership position in the global logistics arena and enhance its own reputation as a trade and manufacturing hub. europeanbusinessmagazine.com 27

InterExec. Unique Network. Outstanding Talent

nterExec are a London based consultancy working with C-Suite Senior Executives across all major business sectors, as they confidentially seek their next new challenge. With a global network of the leading Search Consultants, InterExec offers a unique support service and over four decades of experience guarantees a track record which is world leading. The service is individually tailored to the busy Senior Executive who is seeking a choice of opportunities to realise their optimum career enhancement in a new role, with minimum disruption and maximum confidentiality. The transition from one organisation to another brings with it significant prospects of both short and long term benefit but equally demands focus and commitment to achieve the best result. InterExec facilitate that process, through the planning stage and by careful introduction to engage clients with the most relevant search consultants. The aim is to minimise the clients unnecessary market exposure and ensure genuine

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value and validity in all communication and meetings. InterExec is uniquely placed to plan and implement such transitions, having done this for over forty years. The InterExec team are specialists, with a wealth of experience and knowledge at senior executive level as former company directors or executive search consultants. Using proprietary methodology, specifically developed for InterExec, they provide fast and transparent solutions and above all have daily access to thousands of the most influential individuals in the Senior Executive market, providing absolutely current intelligence and massive unadvertised vacancy access. InterExec’s search consultant network has been established across all major geographic regions and is a unique benefit in hunting the ideal new challenge. There are two stages involved in the InterExec process. Planning to best determine the career target, strongest market proposition and prepare for a global search campaign.

Followed by Implementation, which includes the search and constitutes an intensive campaign with comprehensive support throughout.

Planning: Some Client’s have a very good idea of their objective in this transition and some are absolutely open minded as to where they should best go for the future. Either way it is important to be certain before commencing the search that the target is likely to be the optimum achievable and that the client presentation, both in word and visual, is best suited to enhance their prospects.

Implementation: Whether the client is seeking full time executive employment, interim management, non-executive, consultancy/ portfolio roles or employment in a PE/ VC environment, the channels to market are very similar. Having agreed the focussed market proposition and the client’s ideal

target an intensive search campaign is undertaken to unearth the ideal opportunities. InterExec maintains constant contact with the market globally, managing existing and developing new search consultant relationships. Being in daily contact with the market means InterExec’s knowledge is current and covers all regions, disciplines and sectors.

Senior Executive Access To The Market Typically, Senior Executives seeking to find a new role have limited access to sufficient senior contacts in the recruitment market. Looking at the whole executive market, of those who control executive vacancies, the Executive searching for a new role has very strong access at the bottom end through selective channels including advertisements, job boards and websites as well as personal networking, whereas the unique benefit of working with InterExec is their outstanding access at the top end, where the market is unadvertised and where personal introduction and contacts are essential. Despite the continued COVID problems especially in the Far East and the terrible situation in Ukraine the demand for outstanding Senior Executives in most business sectors and several key markets including Western Europe, UK and the US remains strong. There is clearly a real opportunity for Senior Executive candidates who are seeking their next challenge.

Especially in such market conditions the unique InterExec process and network has proven and continues to

prove to be a powerful asset for those Senior Executives seeking that next key challenge.

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IRELAND

Driving Recovery and Sustainable Growth I

t is 100 years since James Joyce’s Ulysses was published. What would the protagonist Leopold Bloom make of walking the streets of Ireland’s capital today? Dublin, just like the rest of Ireland, is a beacon for global giants like Google, Microsoft, and Pfizer, as well as a thriving hub for some of the most exciting start-ups bringing innovation across the nation. Ireland’s diverse ecosystem is tied together by a stable, adaptable and resilient business environment. This is reflected in the broad-based growth of the economy last year, which saw a

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record year for foreign direct investment (FDI). With employment levels now surpassing pre-pandemic levels, there is a confidence across the Emerald Isle for new opportunities. Tommy Fanning is the Head of Strategic Policy at the Investment Development Agency (IDA) Ireland, which encourages investment into Ireland by foreign-owned companies. As he says: “Our stability, adaptability and resilience attracts the very best talent and most forward-thinking international companies. Our workforce is thirsty for a challenge and

prides itself on innovation, collaboration and the unique perspective found in our country” Tommy has carried out wide-ranging roles in the engineering, biopharmaceuticals and finance sectors of IDA, and is now responsible for the development of Ireland’s strategy for investment in these key areas across Europe, North American and Asia-Pacific regions. With many years working for Ireland within IDA, Tommy has a varied perspective of what’s to know about the FDI offering found on the Emerald Isle.

Facts and figures:

• Ireland is comparable with Japan and Germany, powerhouses of manufacturing, with in excess of 40% of value added in the economy coming from the manufacturing sector in 20211. • Ireland is highly integrated in the global economy and one of the most open in the world to trade2. Provisional figures show Ireland’s good exports reached a record high in 2021 of €165.2bn. • 2021 saw the highest FDI employment level ever at 275,384 directly employed in the multinational sector accounting for 11% of total employment.3 • Employment in Ireland grew at among the fastest pace in the EU in Q4 2021, with employment now surpassing peak pre-pandemic levels4. 1

CSO, Quarterly National Accounts, March 2022

OECD, FDI Qualities Assessment of Ireland, 2020

DETE, Annual Employment Survey 2021

Eurostat, Q4 2021 GDP and employment release, March 2022

• 249 FDI investments won in 2021 - 104 of them being new name investments to Ireland and 145 companies choosing to re-invest and expand their Irish operations. • The government has also provided a registry of digital hubs - a community to provide for the full needs of a remote worker – bringing remote work opportunities to the whole country • A third of MNC’s have locations in Ireland for over 20 years including IBM, Citi and Apple. • Ireland is a now a leading global economy which has shown initiative, creativity and resilience. These outstanding numbers reached after enduring a pandemic perfectly realise the wise words of Joyce: ‘Fall if you will, but rise you must’ – encompassing the admirable journey made by this remarkable nation.

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About IDA Ireland IDA Ireland is an autonomous Statutory Agency set up under the Industrial Development Acts 1986 - 2019. The Agency operates in accordance with the provisions of the Acts and under the aegis of the Minister for Business, Enterprise and Innovation, who is empowered to provide funds to discharge its obligations and issue general policy directives/seek information on the Agency’s activities. 34 europeanbusinessmagazine.com

Navigating the post-Brexit geographic minefield of cross-border hires The Swiss problem To add to tax restrictions, the well-trodden route between the UK and Switzerland – as key European pharma hubs – is facing further geographic hurdles. Switzerland recently introduced a new quota system for foreign workers which places restrictions on the movement of hires; those looking to work in Switzerland on a long-term basis could find themselves faced with the new limit of only staying 90-days in any 180-day period. However, this could work in favour of the UK recruitment market. For instance, a major US pharma company or biotech might find London an easier entry route than Basel going forwards.

The end of European flight culture? Lisa Owens and Jerry Temko, Managing Directors, In-House Counsel Practice, Major, Lindsey & Africa

any feared Brexit would lead to a mass brain drain from the UK. While undoubtedly many industries have suffered high vacancy rates in Brexit’s wake – not to mention as a result of the pandemic – for professional services at least, the capital has not yet lost its allure as a global hub. In fact, according to the Mayor of the City of London recently, fewer jobs have been lost in the Square Mile as a result of Brexit than previously predicted. While the dual impact of Brexit and the pandemic on talent flows cannot be underplayed, there are also further knotty factors at play impacting the recruitment pipeline. For fast-paced, international industries such as law, which have previously been reliant on the diversity of a rich global pool of talent, there are several restrictions at play which are shifting the centre of gravity in the hiring landscape.

Navigating the tax red tape Most notably, companies are increasingly finding themselves facing thorny tax sensitivities over cross-border hires. By way of example, in the life sciences industry, which has historically been reliant on a healthy pipeline of international moves, post-Brexit, companies and individuals are now finding themselves at greater risk of triggering ‘permanent establishment’ rules over the domicile of an employment contract. As such, companies are taking a closer look at hires closer to home to try and avoid any potential red tape. The tax sensitivities over international moves could likely explain an uptick in domestic hires in industries previously reliant on a wider talent pool. For large corporates, one way to avoid a new employee triggering such rules could be to have recourse to an affiliate. However, for smaller companies, temporary secondments or alternatively short-term rotations could provide an alternative, flexible solution.

It would also of course be remiss not to acknowledge the huge shift in working habits post-pandemic which is also having an impact on how to attract potential candidates. A typical Friday afternoon at London City airport would have once been abuzz with business travellers en route to Switzerland. However, during the course of the pandemic, companies have got accustomed to a tidier bottom-line as a result of the pandemic wiping out travel budgets. Post-pandemic, the appetite for business travel and a weekly cross-border commute is unsurprisingly waning and employers need to be alive to their candidates’ new priorities. As companies look to navigate the cross-border minefield of tax complications, quota restrictions and a diminished appetite for business travel, those who stay nimble and think creatively will be the best placed to stay ahead. After all, with the talent war raging on, employers need to adapt fast if they want to attract the best talent in a competitive market. europeanbusinessmagazine.com 35

INVESTING IN THE UK Immigrating to the UK is no longer a route paved with gold By Kerry Garcia, Partner at Stevens & Bolton LLP

he Investor route – or so-called golden visa – has been a popular immigration route into the UK for many years for high net worth individuals. Numerous changes have been made to this category over the years but, up until the sudden closure of the route in February 2022, this was by far the most flexible immigration route for those able to invest

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at least £2 million in share capital or loan capital in active and trading UK registered companies – usually listed companies. It was also relatively common for wealthy parents to gift their children the required funds to enable them to come to the UK. The route was particularly popular because it allowed successful applicants to work in the UK, either on an employed or self-employed basis, to study or indeed to do nothing.

Investors were also able to bring their partners and children under 18 to the UK. Another attraction of the route was that, provided Investors continued to invest the required funds; spent no more than 180 days outside of the UK in any 12-month period; met the English language requirements; and passed a test about life in the UK, they were likely to be eligible for settlement in the UK after spending 5 years here as an Investor. Indeed, if they

were willing to invest £5 million, they may even have been able to obtain settlement after a mere two years in the UK. Applicants were also often able to go on to naturalise as British citizens. As a result, hundreds of applicants applied each year, although numbers had been dropping since the all-time high of nearly 2,000 applicants in 2014 and following the change in rules, which required applicants to invest at least £2 million, rather than £1 million. Indeed, in 2021 only 335 people applied under this route. In terms of the nationalities of those applying, between 2008 to 2021, 33% of Investor applicants were Chinese and 18% were Russian. This all ended when the route was abruptly closed in February 2022, following a Twitter announcement by the Home Secretary who cited security concerns, stating that some applicants had acquired their wealth illegitimately and were associated with wider corruption. Even assuming the relatively low number of applicants applying in 2021 would have continued, on the basis each investor invested only the minimum £2 million, accumulative new investments into UK companies would total £670 million. This does

not include the inevitable additional expenditure on UK properties, luxury goods and independent schooling, as well as UK taxes paid by Investors. Since then, the Government has announced a number of new immigration routes but none come close to offering the flexibility of the Investor route. The Home Office promised reforms to the Innovator route “to provide an ambitious investment route which works more effectively in support of the UK’s economy”. The reforms are disappointing and, in practice, this route is unlikely to be an option in most cases. Those investing £50,000 in a UK business can apply for an Innovator visa if they want to set up and run an innovative business in the UK, but it must be something that is different from anything else on the market; and the business or business idea must have been endorsed by an approved body, known as an endorsing body. This does not suit many would-be-passive investors and few business ideas meet the stringent requirements so this remains a poor cousin to the Investor route. Other routes are for very particular purposes, such as the student route to study and the Skilled Worker

route for those with a job offer from an employer willing to sponsor them. A new global talent route is available from 30 May 2022 but only those who have been awarded an overseas degree from a university on the Global Universities List during the five years before their immigration application are eligible. The Global Universities List is compiled on an annual basis and consists of all non-UK institutions that are ranked in the top 50 of at least two of the following ranking systems: Times Higher Education World University Rankings, Quacquarelli Symonds World University Rankings, and The Academic Ranking of World Universities Unlike the Investor route, applicants must meet English language requirements and will only be granted two or three years’ leave. Importantly the route does not lead to settlement. Only time will tell, but many other countries are still keen to entice wealthy investors and it looks likely that many high net worth individuals will instead look to invest their cash elsewhere, focusing on countries such as Portugal, Greece, Malta and Spain who continue to offer attractive golden visas.

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COST, CONVENIENCE, CONSCIENCE:

The three Cs impacting brand loyalty in the age of the digital shopper By Jamie Saucedo, Senior Vice President of Business Operations at PFS

hen we think of brand loyalty, many of us will think back to a series of personal experiences built up over a series of physical in-store interactions. But what does loyalty look like in today’s digital world when in-store interactions are becoming few and far between? As high street footfall continues to decline, many could argue that we are also seeing brand loyalty start to crumble – or at least what it had meant in simpler times.

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The stark reality is that loyalty and the brand behaviours rewarded by consumers have rapidly altered over the years. In a recent survey conducted by PFS, which took a pulse check of the wants and needs of shoppers from 2021 to take forward to 2022, over one-in-five (20%) of consumers admitted to not feeling any emotional connection to a brand at all. More interestingly still, the way brand connections are formed has also shifted. PFS’ research found that despite 51% of consumers agreeing that brand experience is often better in-store than online – when brand connections are made, it seems that they

are stronger online (38% compared to 23% offline/in-store). This sentiment is echoed by 42% of respondents who agree they receive a more personalised experience online than in brick-and-mortar shops/stores, as they receive benefits such as personalised recommendations, sizing predictions and photo reviews. So, with loyalty now leaning towards the online realm, what elements make up and define this now rare and precious commodity? Here we explore the three Cs that are set to impact brand loyalty in the age of the digital shopper - cost, convenience, and conscience…

Cost and value for money are more important than ever With rising living costs, inflation and now rocketing energy costs set to hit every household, this is expected to take its toll on consumer confidence and spending over the coming months. Cost, therefore, has never been more important for today’s shopper. In fact, according to PFS’ research, in the UK especially, shoppers are more driven by cost than brand loyalty (31%). When looking at achieving the ideal online shopping experience in 2022, free delivery/shipping was reported as the ultimate preference for 66% of shoppers surveyed. Free returns are also a key factor – with 23% of respondents naming it as a key factor influencing last year’s purchasing decisions for multiple purchases from the same retailer1. ASOS has previously spotted this trend, offering ASOS Premier Delivery, their unlimited nextday delivery service for a flat fee. Brands simply cannot afford to ignore such demands, especially with shoppers becoming increasingly savvy online. For example, customers can now easily use the internet to look for the best price and value for money. Tools such as Google Shopping have made it increasingly easier for consumers to quickly compare prices and delivery costs across a wide variety of retailers.

Convenience has become table stakes Whilst cost remains king – convenience is not too far behind when it comes to the top considerations for today’s shoppers. In fact, even where customers are loyal to a brand, it doesn’t necessarily mean that they will buy direct from their website or store, with 52% of consumers in the US and UK saying they don’t mind which website they purchase their trusted brands from. Instead, consumers are increasingly turning to the most convenient option whether that be an umbrella store or marketplace offering a range of different brands. But what will define convenience in 2022? 1

For leisure or non-essential items

According to PFS’ research, over half (54%) of consumers prefer to have multiple options to return a product, with 27% strongly agreeing with this statement. This is good news for retailers and brands that have invested in omnichannel operations to support consumer expectations for choice, following the 2020 peak period (between Thanksgiving and Cyber Friday). PFS’ previous post-peak research suggested that in 2021, retailers were planning to invest more into curbside pick-up (30%) and growing their ‘buy online, pick-up in-store’ (BOPIS) capabilities (24%). If retailers get this investment wrong, however, it can be a real turn-off for consumers – with two-thirds (67%) of shoppers admitting that they are put off a brand entirely if the returns process is too difficult. This puts nurtured customer loyalty and advocacy at risk.

The conscious consumer shouldn’t be ignored Last but by no means least, there is the conscious consumer to consider. Sustainability in retail is an area that simply cannot be ignored by brands when building loyalty. However, it has become apparent that both consumers and retailers are struggling to make sustainable shopping behaviours and purchasing decisions a reality. The aforementioned C – cost – is one factor to blame here with 34% of consumers agreeing that the higher cost of sustainable products was holding them back from making more eco-friendly purchases. This notion was further emphasised by 63% of shoppers agreeing that buying a sustainable product is important, but so too is getting the best price. Cost vs convenience is certainly a tricky balancing act, but it is one that

must be urgently addressed as discussions around sustainability continues to rise. To capture loyalty, brands must also ensure that their sustainability efforts or credentials aren’t going unnoticed as concerningly, a quarter of consumers surveyed revealed they find it difficult to understand which brands actively support such initiatives. This is reflected by 17% of consumers not knowing if the brands they shop with use recycled/ recyclable packaging or offer a sustainable packaging option. Building awareness and actively promoting sustainable practices will therefore be vital for brands to ensure that consumers are able to make more sustainable choices, whilst building loyalty with the more environmentally conscious consumer.

Rebuilding loyalty …one C at a time 2021 was another challenging year for retail, dealing with the ongoing impacts of the pandemic and Brexit, and battling through a sea of shortages – from raw materials to labour and infrastructure. Amid this turbulence, retailers and brands need to recognise that brand loyalty is no longer what it once was. To appeal to and build loyalty with today’s consumer, cost, convenience, and consciousness around sustainability need to be brought to the forefront of operations - and that involves providing a range of options around delivery and returns that seamlessly integrate across commerce channels. Those who acknowledge these changing consumer preferences and behaviours, will be rewarded by consumers in 2022 and beyond. europeanbusinessmagazine.com 39

FROM ROOT TO BRANCH:

What Real Digital Transformation In Banking Looks Like

raditional banks face significant challenges from digital and onlinefirst competitors, but by taking a wide-angle view of their own capabilities, keeping the pace is possible, writes Roy Zakka, CEO and Founder of Layer Despite the slew of reports reminding the sector that there is no priority more urgent, traditional banks are understandably hesitant to embark on a full-scale digital transformation project. It’s easy to see why. Most are burdened by lagging legacy core systems, while investors and executive leadership are lukewarm about the prospect of multi-year digitisation projects. Factor in the upfront investment, which can be as high as 10 percent of annual expenditure, a lack of IT resources, and the relentless demands of compliance, and you have

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a scenario where digital transformation remains a buzz phrase, not a plan. Now, I’m not arguing for the sweeping replacement of traditional branch banking by a twinkling array of mobile apps. The right approach to digital transformation may actually restore a sense of purpose to brick and mortar banking. That’s an urgently needed solution to the current rapid demise in physical banking since the pandemic, where even the big banks are struggling to find a role for their branches and trying to compete with neobanks by going digital themselves. That approach ignores the fact that up to 22% of customers still prefer to bank in-branch, but explains why one US study has already predicted that bank branches could be extinct by 2034. I believe that true digital transformation is about future-proofing a business,

not just digitising existing processes. That’s a leap into the unknown for banks already constrained by a traditionally risk-conscious culture, but it doesn’t have to be.

The options for upgrading the core Digitizing core systems is a major hurdle in any transformation project. The risks are too high when the back end is likely to be a bespoke, heavily customized system designed in a language from a different era. Up to 43% of traditional bank’s systems are built in COBOL, and many were first deployed in the pre-internet age. These core legacy platforms were never designed to give an end-to-end view of data, or a Single Customer View - something digital-first banks

are designed to do from day one. Data is siloed, making it difficult to extract insight and release value. In defence of core systems, they are extremely reliable at what they were designed to do, but that strength is a weakness when it comes to adapting to a mobile, digital market. That leaves banks with the following options, involving various degrees of risk and disruption: • Migrate code but not functionality, essentially upgrading to a newer, more robust version of a database • Integrate middleware without changing the backend configuration, essentially patching over the shortfall in backend functionality using APIs. • Modernize the codebase, eg. translating COBOL to Java without changing essential functionality. This at least opens up the potential for cloud-ready functions. Ultimately, however, this is merely dressing up the front end for a slicker user experience, without addressing any key issues through backend or middleware changes. • Replace the core banking system this ‘rip and replace’ approach calls for the highest degree of investment and exposes the bank to maximum potential disruption.

• Augment the core banking system to address the priority needs not covered by the legacy core. This solution offers quick transformation without disrupting essential processes. Ultimately, the augmented platform can become the target destination for the legacy core.

Overcoming the challenges and embracing digital transformation Returning to my point about digital transformation and digitisation, the fact is a bank could implement any one of these strategies and still not achieve true digital transformation. True digital transformation fundamentally changes what a bank is. It changes the purpose of a branch, a mobile app, or even a phone. You need to change each channel from a services channel to a sales, support and advice channel, in which case transformation has to make sure that all those different elements are achievable and integrated on digital services. In other words, it’s not enough to reskin existing functionality into a mobile app. Instead, there’s the task of supporting the client base in using new digital services, upskilling staff

Roy Zakka Roy Zakka is CEO and Founder of Layer, which works with traditional financial institutions to rapidly digitalise their core legacy systems. To learn more, please visit www.wearelayer.com. on what they do on a daily basis, and ultimately changing how you operate as a financial services business. That’s a long-term project rather than a short-term challenge.

Getting ready for the future Through a combination of events, circumstance and changing customer demands, a new age of digital banking is on the horizon, one which is much more than just an online or app service, but a complete rethink of what banking is - from root to branch. Banks need not panic. The solution is in small tactical changes that avoid the need for major capital expenditure and disruption, leaning towards cloud-native, open-banking compliant digital platforms that deliver an outstanding customer experience without affecting core transaction processing.

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What the Banking-as-a-Service revolution can offer retailers in 2022 optimise their customer journey and enter new markets. But partnering with BaaS providers can do more for retailers than just enable them to increase their revenue through sales growth – it can allow them to improve their relationships with their existing customers, and learn more about them through improved data and insights.

Building loyalty through banking

Nikhil Sengupta, Sales Director, Vodeno

n the world of retail, building customer loyalty is critical. How someone feels about their experience with a brand will determine whether or not they come back. For retailers, making the checkout experience as easy and seamless as possible is one of the most effective ways to create brand evangelists. Improving CX has been proven to influence sales growth, as it increases the chance that the consumer will come back and spend again. Smart brands understand that the integration of embedded financial services allows them to innovate their customer experience and, as a result, grow their business. While Buy Now, Payer Later and embedded insurance are among the most in-demand services today, they don’t begin to cover the full potential of what Banking-as-a-Service (BaaS) providers can offer retailers. An entire portfolio of banking products, such as integrated payments, digital wallets, branded debit and credit cards and lending, are now accessible to retailers and eCommerce players. The rapid pace of innovation made possible by API-based technology and Open Banking adoption is making it easier than ever before for

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non-financial brands to tap into this trend and reap the benefits. But how does embracing embedded finance benefit retailers – and what does it involve?

Banking for everyone – not just banks Building a fully operational, compliant banking product from the ground up was traditionally out of reach for non-financial companies due to the risk, complexity and regulation involved. BaaS providers can provide the underlying technology and regulatory and compliance expertise required to integrate fast, reliable products into any company’s ecosystem, using APIs to facilitate the connection between user input and the banks’ internal systems. In the case of Vodeno, we offer a cloud-native platform, combined with a full European Banking License, giving our clients everything they need to create, support and operate a portfolio of banking products in a modular way that is tailored to their business. This is the first benefit available for retail brands – the ability to implement embedded banking products without incurring massive infrastructure costs. This allows them to create new commercial opportunities,

Retailers have long sought out ways to earn their customers’ trust and attention in a competitive market, in order to keep them coming back. Embedded finance options are a new way that retailers can gain a competitive edge. Offering a personalised experience that seamlessly integrates their preferences and personal information makes consumers more likely to be loyal – 73% of consumers say a good experience is key in influencing their brand loyalties. Regulation supporting Open Banking (PSD II and GDPR) benefits the vendor as much as the customer in this respect. Ensuring that every step of the purchasing journey takes place within the brand’s own platform, rather than forcing their users to leave their environment, allows retailers to know their customers better. Armed with these insights, they can launch new commercial models, bolster revenue streams and ultimately deliver products and services that their customers want to see. BaaS providers and the innovative solutions they can provide are changing the landscape for retail. Giving retailers access to innovative banking products, they can focus on what really matters - their customer and building the best customer journey possible. Delivering a modern banking experience that suits their customer’s needs is no longer out of reach for retailers.

Is the Government becoming too reliant on financial tech?

echnology has become a normal part of our everyday lives, from more mainstream things like smart speakers and doorbells, to the more unusual, including AI powered contact lenses. With all the tech advancements happening in the world, it’s no surprise that we live in an increasingly data-driven society. This data is being used to build a picture of the world, of us, and our habits. It can be interpreted to make assumptions on us as consumers and people. In the not-too-distant future, it will be able to determine how likely a person is to become bankrupt or commit bank fraud. It will be able to do this by using machine learning to consider past behaviours and predict a person’s future decisions. It’s almost unbelievable, albeit inevitable. When it comes to tax, the UK tax system is the longest in the world sitting at 22,000 pages. In fact, it’s so long, it contains more words than the average human will read in their lifetime. Part of the reason that it is so long is because successive governments have simply added clauses, for Corporation Tax, Capital Gains Tax, and Inheritance Tax to name a few, to suit their needs

at the time but haven’t ever rewritten or reformed the system. This has resulted in a multitude of issues, including numerous loopholes which leave it open to potential abuse. What’s more, our tax system was largely complied in an analogue era. So, it is very much trying to get up to speed when it comes to modern concepts such as cryptocurrency, and even online banking in some cases. To try and plug the gap and keep up with the modern age, the Government has created yet more layers of rules designed to protect the system. However, is the civil service sufficiently prepared and equipped to deal with the digital era? Does it have the right systems and knowledge to cope with an ever-expanding digital landscape? Digitisation holds potential advantages to the government. Given individuals and businesses have become so reliant on software for their finances, this means their financial history is well documented in data. In turn that provides opportunity for governments in the form of assessing such records against the amount of tax paid. HM Revenue & Customs use Connect, a data mining software, to

cross-references business’s and people’s tax records with other databases to establish fraudulent or undisclosed (misdirected) activity. This suggests the answer is that the government can no longer just rely on the civil service, it is increasingly having to use tech developers, including fintech, to help police adherence to the tax system. In turn this poses a risk to Parliamentary authority. The likelihood being the code, that makes up the software people use, will determine what businesses and individual can, and can’t, do. At present, the law works as a deterrent. If you commit a crime, you will be punished. In the future though, tech will design out crime. It won’t allow citizens to break the law. Looking at tax as an example, the current system leaves room for human error. It can also be legally manipulated to work in a client’s favour while also being exposed to fraud. In the future, this may not be able to happen purely because of the tech that is in place to monitor and prevent wrongdoing. The software you’re reliant on simply won’t let fraud and errors be feasible, a case of prevention being more effective than the threat of punishment. However, if it’s private firms that are in charge of the tech that is regulating these processes, what would stop them from bending it to work in their favour, rather than the government? After all, they answer to their stakeholders, not the government. When you consider that eBay’s digital dispute resolution centre resolves 60 million disagreements per year, which is three times more than the US court system, it’s easy to understand why governments, including in the UK, are so keen to embrace tech. Especially when government bodies like HMRC struggle to keep up. It begs the question, who will hold the power in the future, governments, or tech? For now, tech companies need governments for legitimacy, but a seemingly irreversible trend means that at best, government authority hangs in the balance. For more information on Wellers, please visit https://www.wellersaccountants.co.uk/ europeanbusinessmagazine.com 43

INTERVIEW - MAXIMILLIAN WHITE

The British Entrepreneur leading the pack of the New Cannabis Billionaires Club Medicinal cannabis is riding on a high. The medicinal cannabis industry has burst onto the scene in the past few years and has witnessed phenomenal growth, allowing investors and businesspeople alike to rack up significant wealth within the space. North America and Europe are home to some of the world’s most famous cannabis cultures, such as California and Amsterdam. Millions of Europeans use cannabis every year, and with little legality for recreational cannabis, this high demand is met by the illegal market. As a result, yearly illicit cannabis market sales are estimated at over £9 billion, representing significant untapped potential and profit as laws and legislations shift towards a more regulated cannabis sector. The drug trade has always given rise to huge wealth, but now the legal industry is producing a new breed of corporate marijuana moguls. Step forward Maximillian White. White sells medicinal marijuana to wholesalers across the world and is hoping to provide medical marijuana patients with the perfect product. Initially a technology investor, White founded a company dedicated to the manufacture, research, cultivation, processing, and distribution of the highest quality medical cannabis for the pharmaceutical industry. Innovative White is Nottingham-born and was one of the first entrepreneurs to seize an opportunity, providing patients of psoriasis, multiple sclerosis, and seizures with the product that relieves symptoms. Medicinal cannabis comes in a variety of forms including pills; liquid; oil; powder or dried leaves. At the forefront of the booming legal marijuana industry is Maximillian White , a British entrepreneur at the head of the game in this booming industry . For our lead front cover story - we caught up with the very innovative business man about the many challenges he has faced over his career , his current situation and his many exciting plans for the future. 78 europeanbusinessmagazine.com

Where did you first have the foresight of investing into the Cannabis Industry I realised there was an opportunity as I saw the quality all over the world was so up and down and nobody specifically was really producing enough of it. It was really when I looked into that when I saw the demand was seven times higher than the availability that I should really look to be doing something on my own.So I started to look into doing my own stuff.Not sure I realised at the time how big it was going to get but I was certain from various experiences through my business career that there was an opportunity worth looking into. From there I managed to put a fantastic team together of all the best people that I’ve met on my journey with whom I made a lot of money with. Then, what happened was , I got asked to speak in an UN webinar during COVID and it was to take medical marijuana off the dangerous drugs list onto what would be classed as an edible medical green tea like product or something seen as a herbal tea to which people could benefit from. From there me and my team spoke about it and we told people about the fact that as a normal human, we’ve got cannabinoid receptors in our body, we’re producing THC and CBD anyway. One of the natural ways to take any form of medicine is with cannabis because of our cannabinoid receptors. The difference between pure cannabis and marijuana is the fact that cannabis is grown naturally, marijuana is grown in a way like you would ferment a grape to turn into wine. So we keep it as the purest version and essentially it becomes one of the most powerful drugs in the world. So once the UN decided they were going to take it off the dangerous drugs list onto almost like an edible list, a food list, an agricultural list , they then said, ‘Look, this is okay but it’s still a drug and it still needs to be controlled, so how are we going to deal with this?’ So with 90% of the pharmaceutical companies that use my medical marijuana being in Europe, they insisted that they would legalise it in more or

less all of the countries they could but it needed to be EU GMP quality, which means that it needed to be at some form of level of European spec and quality controlled. I knew that nobody was prepared for this because to have the ability of EU GMP, you’d have to build it from scratch. But at that time I was looking for my own stuff anyway, so it made sense to hold back a bit and we’d go for the GMP product. From there I bought 35 hectares of land, now I’ve just bought another 100 hectares of land, I’ve bought two factories that are around 150,000 square metres between them and I’m just doing a deal now with 1,000 hectares as well, just to give you an idea of the sizeof where we’re going with this now.

That is a big increase. How will that affect business do you think? A 1,000 hectares of licensed land, yeah. Now what I’ve done is, I’ve managed to put myself years and years ahead of everyone else. Why? Because of the quality, I’ve always had the capability of growing the best quality.

How did you manage to get to this stage do you think? Because I’ve got patents on growing systems that are the best in the world. Used by the best in the world for the best. I’ve always had them anyway. That’s why I made my money in the earlier years. Irrespective of what we’re doing now, what we’ve done is, we’ve got the best

quality and we’ve got the capability of you being able to get everything from under one roof. So you don’t have to mess around and go round to 60, 70 different companies to try and fulfil a small order, you can get it from one stock. This is key as well as the fact that we’re based in Portugal, demographically it’s fantastic, as well as the fact we’re European, we’re very close to all different countries, especially the ones that use it. Additionally we have good trade agreements with Africa, amazing trade agreements with America and the places in all European countries being an European country ourselves and also, the only country that’s got an European trade agreement with Brazil. It’s demographically where we’re so advantageous and have huge advantages over our competitors.. Even before we started building our facility, when people knew who our team was, because my team was picked the best of the best, people that have grown the EU GMP. One of our master growers during COVID got 25 cannabis cuts out of 27. So we’ve put the best team together and working with some of the best people in the industry, we were getting the orders coming through before we’d even started our facility. The only problem when we started doing it, we realised the problem wasn’t what we were doing, it was not being large enough. So over these last two years, since we last spoke, we’ve scaled up amazingly well . In fact we have probably quadrupled in size and that is just a conservative estimate. europeanbusinessmagazine.com 45

So from say two years ago, where were you at capacity wise compared with now? Two years ago, It was roundabout 35 hectares, now we’re over 1,000 hectares with over 100,000 square metres of indoor space as well, which makes us the largest indoor facility in the world with cannabis. I’m also taking on new partners such as Nick Candy,another rwell known British entrepreneur. Growth wise ,to give you an idea, maybe a couple of years ago, our possibility was growing around 600 million a year in cannabis, now we can grow anywhere up to 10 billion a year in cannabis. We are the only people in the market kitted out for the EU GMP drive that’s just about to come. You’ve seen it in Germany, recreational marijuana’s now being legalised and in France and in Malta and these countries alike. They’re not going to accept any kind of marijuana that somebody’s grown in the garage, it’s going to have to be grown in some form of quality control as well. So I’m prepped for that as well. Which nobody else is because I had the insight to do that at an early stage and make sure I had all the licences. It also means that I can save a lot of the old manufacturers as well, because I’ve got a system where I can transform the quality of their marijuana to the highest quality through one of our transformation facilities. So we can also save a lot of time and wasted energy even for the old companies within the industry.

So you have essentially made your company into a ‘One Stop Shop’ and all sorts of companies within the industry can come to you ? They can come to me, correct. As long as I can do the transformation for them, which is taking all the parabens and with that all of the humidity has to go too so we can have the formal state of dryness removed which is imperative for me to achieve the EU GMP spec. So, effectively, we can take a good quality and turn it into an impeccable quality. So that’s something we are build on hugely in the future. As you 46 europeanbusinessmagazine.com

know, just recently, people like Pfizer, they’ve invested 7 billion just into research into medical marijuana. It’s a movement. Just to give you an idea, what do you think the yearly market is for medical marijuana?

I was under the impression it had risen to well over 100 billion a year ? It’s now at 186 billion a year. A lot of the big companies, they’re not set up to produce that type of amount. They were set up to be an investor

stock. Basically a stock. I don’t want to say too much on that because it may cause issues but essentially they’re not set up to produce,

Where are the major medical marijuana companies based Max? 90% of the pharmacies that use medical marijuana are European-based. 90% of the companies that want to buy Medical Marijuana are European based and the laws and conditions are Eu GMP. That’s why it makes me the biggest player in the game right now.

Size-wise, we have the biggest interior. Size-wise, we’ve got the biggest exterior and we’re also going to have the quality of the EU GMP manufacturing.

What was the year you started looking into marijuana? 2015.

You had a bit of Cypriot financial crisis in 2012 Correct. With the Cyprus banks, I lost 90% of my wealth.

Did you ever receive any compensation or anything like that? I received 100,000 Euros back from 30 million Euros .It was insured by the European Union, but they knew that

Literally unbelievable. It’s robbery.

After that, you went into the property market. Yeah, property market, I’ve always been in music as well, so don’t forget my music career. I’ve always been into music as well, which has kept me afloat. Then with property and music, it transitioned me into nightclubs, that kind of industry.

You made a fairly sizeable investment into the online music industry , where you were allowed to download stuff. That initial investment, where does that take you to, say, five, six years later? Did that spring you onto serious cash reserves? It made it possible for me to lose 30 million in the Cypriot banks.

Could you not turn around to anybody, a financial regulator for example? This is what a lot of people don’t understand. When you go into a bank and you sign thousands of documents, one of them is saying if the bank goes down, you go down. It’s a non-spoken thing but a known entity. You learn

the hard way. Bank of Cyprus had over 400 branches. They weren’t a small bank, they weren’t a post office, they weren’t a building society.

I know people who have lost money and they found it very tough to come back from losing 20 ,000 pounds. How did you manage to turn it around from losing that amount of money ? Can I be honest with you? I realised that I enjoy making the money, than having the money. It gave me a new path and a new journey and I enjoyed it better the second time. I didn’t start from scratch, I started from experience.

What about your mind-set? It must have been a very dark and negative place? Don’t me wrong, my head was down for a while but I Know now it’s a mental block, it’s never a physical one. You can have what you want, you mentally block yourself. It’s a competition, you versus you.

What I’m trying to get at is more the mindset, did the loss make you work so hard that you go into the mindset that nothing was going to stop you in your way? Were you mega determined? Like I said to you, you set your limits and you set your rules. The only thing to stop you from getting what you want is yourself. If you can lift the limitations and restrictions of what you think you can do and aim for Mars and be happy with the stars.

You started off in 2015, was it your foresight or were you talking with people, did you have a team? How did it work? Somebody said to me, ‘Have you ever thought about cannabis? I’ve got an opportunity for you. I think you should have a little look into it.’ I think they were trying to pump me for investment. I asked a few people and I did what I do. With information and business, you have to sift through the sand to find the gold, so I’ll always take things on board, I’ll do my homework and I’ll come back and I’ll make my decisions. When I did my due diligence it came back as ‘this is what you should be in.’ It makes sense, it’s got great ethics behind it, it’s something that can help the world as well. 65% of the population suffers from glaucoma. The only known treatment for glaucoma is medical marijuana. It is also greatfor the nervous system, in a world where we’re not looking after ourselves, medical marijuana rebalances you in the correct way. It puts you back in harmony with your nervous system, and that is medically factual.

Do you take it yourself? I take it myself, I use CBD. The misconception about CBD is that if you take it, you’ll fall asleep. What happens is, if you go to bed at night and you’re ready for bed, you take some CBD drops, you can quite easily fall asleep because your nervous system

So I am assuming with this increase in business your wealth has changed significantly Yes - I’ve got a few KYCs as well as I know people are a bit dubious about the actual wealth status of billionaires and if they are actually billionaires . The fact is I’m in the billionaires’ club, I’ve got KY documents that can show you that. I have to do that for a lot of the companies we work with and I think it puts me in the top 60 now in the UK. europeanbusinessmagazine.com 47

is balanced from the CBD. If you wake up in the morning and you’ve got a little bit of brain cloud, you’re feeling a bit anxious or you can’t motivate and you can be a bit lethargic mentally. Well, when you take it, it rebalances your nervous system and it helps you motivate yourself without being drowsy or anything of the like.

It’s interesting you said that because as you said, there’s a lot of misconception and to be honest, I had it as well. What’s the active ingredient that is why people smoke spliff? THC? People smoke recreational marijuana to feel a bit funny. Tetrahydrocannabinol, THC.

That’s not in CBD at all? No, very small doses of it. There’s 200 components to a marijuana plant. Especially with us, we’ve got good proper professional growers who are experts in their trade. We can DNA hack in and we can remove different ones and reinforce different strains For example, I can create a CBD that’s completely THC-free. I’m also looking to target the Islamic market with that because having a THC-free CBD with the likes of maybe olive oil or coconut oil, in a chewing gum, and it’s completely THC free which is in line with Islamic law so it is something that could be introduced into Islamic countries, like the UAE, Saudi, etc.

So for the Islamic market , at the moment , medical marijuana is prohibited? They’re not because of THC. I have a patent which can isolate the THC from CBD, so there’s 0% THC in it, it isolates it completely. You’ll have more toxicity in a chewing gum than you would in a bottle of our CBD oil. And a high quality as well. Because a lot of the time, people are taking cosmetic CBD with a spectrum of maybe 12%,20% . I can create CBD up to 90%. If you’re getting some benefits from your cosmetic CBD,it would be a good idea to try mine and your life’s going to change. 48 europeanbusinessmagazine.com

On the medical benefits, where is it most penetrated? Medical uses, where are people using it most? From what I hear, it’s good for Parkinsons type, muscular dystrophy. It’s good for the nervous system. It’s a natural anti-inflammatory. It’s very good for IBS. It balances your nervous system, so if you were to be doing, for example, chemotherapy, it would be almost mandatory that you take CBD with it. Because as long as your nervous system is balanced, it’s receptive to changes in your body and what you’re trying to do with the chemotherapy. When your body gets stressed, your nervous system is unbalanced, you produce cortisone, high acidity, which is almost like an acid in the body that you don’t need. So rebalancing your nervous system with the CBD, it starts to run naturally again. A little bit like the ketones diet.

We discussed previously that you were looking at formulating strains based in DNA samples which is going to work for the super rich or the wealthy . How is this coming along? The reason I’ve not pushed forward so much with that is that I want to create a method and some form of system where we can deal with everyone, where it can be tailor-made for their specific needs. The cost behind it is so costly to my company that we’d only be able to approach that market but with R&D and everything that we’re doing constantly in our labs as well - we’ve got two labs in one of the best scientific parks in Europe called Bio [inaudible 13:40] Park Facility - in our lab there, we’re constantly striving to find a better quality product and a cheaper, more affordable product all the time. It’s not about so much

How big do you see that in five years? It’s a growing market. The more people that open up the competition, the better for me. I don’t see competition as a threat. I see it as you’re in the right market. If it’s only you doing it, there’s something wrong with the market. It’s an evolving market, all I’m going to do is make sure that I’m ahead of the game technically and with the research we’re doing into it and making sure I’m more advanced than everyone else. I want to produce the beluga caviar of medical marijuana.

On a personal level, you’re one of the UK’s most successful businessmen entrepreneurs, what do you think has made that success within you? You’ve had a good childhood, then it got taken away, where do you think you’ve seen the success in you and why?

the profit, but about the gains and the accessibility to the general public, not just the exclusive millionaires and super rich.

With regard to company size, from 2015, how many people are working under your umbrella at the minute? Obviously we’ve just gone through COVID, which was a bit of a funny time. By 2025, our staff will be just under 10,000.

How much of the medical marijuana market would you say you’ve got of it percentage wise? Over the next two years, I’ll take a big chunk of the 186 billion a year market.

Over the next two years, the market will be at 186 billion.

In life, if you’re happy where you’re at, then you can’t blame anything that happened because obviously that’s your sat navigation bringing you to your destination today. If you’re happy, then you have to also accept the journey. Seeing both sides, understanding both sides of having money, not having money, I understood where I wanted to be. I don’t think money buys happiness and I need to reiterate this because it doesn’t, it just gives you more freedom and the freedom to make better choices.

I’d agree 100% on that. Not that I’ve ever been in a position of having a lot of money. I was watching Tyson Fury, he essentially said that so there’s obviously a lot in it. It gives you more options and the freedom to make better decisions and less poor decisions.

What about Max White in 3-5 years. Obviously, you’re going to stay within the cannabis industry, it’s treating you well. There are so many variables to the business. The only thing with me is I was always peaking in the industries

from the music industry to the property industry. I capped out. But with an industry that’s growing so fast and has got so many variables, I’m sure I’ll be busy for the next ten years, no problem.

With regards to the market of pharma and the market of cannabis, the cannabis industry, even though it’s worth 186 billion, I still think it’s nearly in its infancy. I think there’s a long way to go. The population of the world’s not getting smaller. Healthwise, we’re becoming more health conscious as humans and it’s something that can benefit you medically in over 2000 different ways and hundreds of different ailments. So it’s never going to be a shrinking industry. Like I said, it will be a growing industry with growing competition but competition is healthy.

With regard to CBD, do you think that’s going to become mainstream within hospitals? Even doctors handing it out? It’s interesting what you said about the cortisone and the nervous system. 100%. There’s so much money being put into it. Even the fact that Pfizer’s put 7 billion into research alone this year, that’s their investment this year into research. I can see it even going as far as medical marijuana being available on the NHS when they understand the benefits of taking it.

Is there some reason people aren’t using medical marijuana? Why isn’t it being used? It’s been used for thousands of years but other things became more profitable. That’s the only thing I’m willing to say. Marijuana itself, hemp - hemp’s the most biodegradable plant on the planet because even down to the biomass can be fed to farm animals. There’s not one thing that’s wasted from the plant. You can make clothes from hemp, you can build buildings from hemp and obviously you can make numerous amounts of different medicines from hemp but it became non-profitable and now we’re bringing it back in. europeanbusinessmagazine.com 49

As a lifestyle I’ve been wealthy for the last twenty years. What is wealth? How do you measure wealth? My lifestyle, I’m too busy to even look at how much it’s made me so far.

On a personal note, I know you like the jewellery, the bling, what’s your most prized possession? As a toy. My children. Possession. I don’t think your children are your possessions. My favourite possession was my first bought home which was a little semi-detached house I bought in Portugal almost 15 years ago. It’s the only thing I can’t part with.

On the kids, is it two or four kids you’ve got? Can we not talk about the children please. My football team’s growing and I got absolutely slaughtered in The Times for it as well.

So you are Notting Forrest Fan? I’m Nottingham Forest, correct.

I’m sure you’re going to be buying them soon, Max.

They really did suppress the research back in the 70s on marijuana. Yes they did but it’s like anything, once the evidence is there, there’s nothing stopping you. How do you see yourself? Are you going to stay as a resident in Dubai? Just for me, because obviously working all over the world now and having just made new contracts with Africa and 50 europeanbusinessmagazine.com

Turkish governments to name just a few, demographically, it’s better for me to be here but I don’t mind moving. Eventually, I don’t want to just be in the cultivation of marijuana, I want to be helping countries start their own cultivation and the bottom line medicine for themselves and help educate themselves.

What is your travel frequency like? How often are you on a plane? Are you a real frequent flyer? I’m on a plane more than I’m on my sofa.

It’s on my list. Very interesting times-I think they’ve won the last ten matches but Nottingham Forest was always a business. They grew some amazing players, they’ve got a great academy, but it was a business and they had to sell a lot of their players on. Now I think they’re looking into the future of the club and where the money’s at and they’re keeping the players and they’re nurturing them and they’ve got a great side at the minute. I could see them in the Premiership if not next year, the year after. If I get hold of them, they’ll be in the Premiership.

It’d be a good time to buy them now. Yeah, 100%. If they stay where they are, you make good money and if they go up, you make a shitload of money. Pleasure talking to you Max And you Nick

Plan to become a ‘cryptoassets hub’ may just be the what the UK Govt needs

n a busy start to April 2022 for the British chancellor, Rishi Sunak announced his intention to make the UK a “global hub for cryptoassets technology”. Put simply, this means he wants the country to be an attractive place for cryptocurrency companies to operate. For the government, this requires a delicate regulatory balance between preventing financial crime and protecting consumers, and allowing cryptocurrencies to flourish. If all goes to plan, greater engagement with the sector could result in a welcome boost to the UK economy. It’s early days of course, and many central banks and economists remain unsure of the role cryptocurrencies should play in a nation’s financial makeup. But Sunak’s plans featured some eye-catching proposals, including removing tax barriers, and developing a non-fungible token (NFT) with the Royal Mint. But the key element was a proposal to bring a particular element of cryptocurrencies, “stablecoins”, within the scope of existing UK banking regulation. Stablecoins are widely considered to be at the safer end of the sector, where the notorious volatility of other cryptocurrencies like Bitcoin is replaced with something more reliable.

So where Bitcoin’s value is derived purely from levels of confidence and demand, stablecoins are backed by other assets. Usually this means traditional currencies (usually the US dollar), but some are attached to commodities like gold. Either way, the aim is the same – to keep their value as close to constant as possible, making stablecoins more useful as a reliable medium of exchange. Stablecoins may also have attracted the UK government because they offer fast transactions, at low cost and without borders. This allows users to make speedy global transactions with individuals and businesses, without the need to exchange currencies into a local tender. Other appealing factors of stablecoins include their transparency, in that every single transaction is recorded and publicly visible. They are also (largely speaking) under centralised control, in the same way that traditional banks have control over customers’ accounts. It makes sense then, that as the UK dips its toe into cryptocurrencies, it is stablecoins which have most appeal. An alternative approach would be to introduce a central bank digital currency, as China is doing, but this is time consuming and expensive. A well-regulated stablecoin space will

at least get the UK involved in the sector while the Bank of England decides whether or not to commit to a digital currency of its own.

Cryptic crypto But the lack of detail around the UK proposals – what regulation will look like and what it hopes to gain – remains a concern. So too is its recent lack of progress in dealing with a huge part of the modern financial world. For example, there have been promises since 2015 about regulating of cryptoassets, with little beyond tax issues and preventing money laundering being forthcoming – and both have had a restrictive impact on the sector. The UK’s financial services regulator meanwhile, has indicated recently that it is more focused on preventing risk than helping crypto technology to flourish. Perhaps then, the UK is not as welcoming to innovation and crypto technology as it makes out. Nor has the treasury provided any clear detail about what stablecoin regulation would actually involve. Yet to encourage wider use of stablecoins it would at least need to bring in some kind of registration system and a mechanism for consumer compensation should the stablecoin ever fail. Without this, a stablecoin could indeed fail, causing major damage to the economy, the wider crypto sector and to individual investors. It is also questionable to what extent the UK can become a global crypto leader, as the most successful stablecoins all peg, to some degree, to the US dollar. (Although this could change as the US and EU adopt tougher stances on cryptocurrencies.) The UK may well hope to gain a greater foothold in the relatively safe (and controllable) world of stablecoins and enjoy the potential benefits for the pound as an underpinning currency. But in reality, it will take much more than the measures announced so far to make any meaningful progress. They sound instead like a vague attempt not to be left behind by other countries, without committing too much in the way of investment and resources. europeanbusinessmagazine.com 51

Facilitating open finance through secure services Travis Spencer, CEO of Curity

pen Banking is becoming more established across the UK and Europe. As such, the financial services industry is becoming increasingly integrated. The introduction of regulations such as PDS2 in Europe and ongoing efforts in Brazil demonstrate the ongoing “platformication” and opportunity this presents businesses and consumers. The idea of handling a user’s financial data can be daunting for businesses, and as such requires strict processes. The alternative option of precious data falling into the wrong hands could be hugely destructive for businesses, with the potential to ruin customer relationships,

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business prospects and revenue. Financial-grade API security is the difference between securely exchanging data between third parties, and running the risk of large breaches of personal financial information. With security being such a crucial part of business management in 2022, there are an array of measures and regulations that financial services companies should adopt to set themselves up safely for success.

Intricacies of Authentication In a highly regulated system, it is important to have strong confidence in the users’ identity. This requires a Strong Customer Authentication (SCA) method, which usually translates to a high Level Of Assurance. This

is achieved in part by using multi-factor authentication. Equally essential, users must prove their identity as part of the registration process and authentication process. To achieve this, the regulators require standards-based proven methods that ultimately result in a token (i.e., a ticket or memento) that is cryptographically bound to the bank and codifies the identity of the user, their authentication method, and the bank’s assurance level that the user represented by that token really is who they claim to be.

Confirm consent Authentication is important, but, alone, it isn’t enough. Open Finance regulations are clear that users must consent to a business accessing

certain data or performing an action such as creating a transaction. But it must also be possible for users to manage and even revoke their consent through an easy-to-use user management service.

Protect data Protecting users’ data can be a challenging task, but it’s a critical one. It takes a long time to build up trust - particularly when finances are involved - and it can be slashed in seconds if users lose confidence in a business’s ability to look after their users. As well as costing customers time, money and frustration, this can ruin a business’s reputation. Consequently, the safety of user data must be prioritised. A combination of different techniques, frameworks and processes can be introduced to mitigate the risk of fraud, leaking or manipulating data and violating privacy. This is an opportunity to ensure standards are implemented across the board. Standards and directives such as PSD2 are designed to protect user data, as well as securing bank services. Businesses need to ensure they are investing in the right technology to adhere to these standards. By choosing solutions that automatically implement these specifications, businesses can reap the benefits of a secure customer database and improved customer relationships which they are exposing via APIs.

Prioritise skills In order to do this, businesses must also invest in their teams. It’s not enough to simply put protocols in place. Design and execution requires a specific set of skills which, unfortunately, are high in demand and low in supply. Recent research commissioned by the Department for Culture, Media and Sport found that half of UK businesses (approx. 680,000) have a basic skills gap, lacking staff with the technical, incident response and governance skills needed to manage their cyber security. Meanwhile, a third (approx. 449,000) are missing

more advanced skills, such as penetration testing, forensic analysis and security architecture. Despite being essential - even more so as services are increasingly digitalised, cyber security skills are often poorly understood and undervalued by both management boards and within IT teams. This can lead to a lack of investment in training, mishiring, and poor retention of staff in security roles. This only exacerbates the challenge of building a team that possesses the requisite skills. Hiring can be hard when there’s a shortage of skills, so businesses need to be creative. This means considering new recruitment avenues and, importantly, breaking free from the traditional model of what cyber security professionals look like. Curiosity is key, so, for more junior roles especially, attitude should be a key qualification. Businesses should trust that

many skills can be acquired on the job if the candidate has the essential fundamental knowledge and drive. To aid in this, employers should provide training and mentorship. We’re on the cusp of an exciting future for financial services which will shake up the way that banks do business and consumers manage their financial transactions. New opportunities mean new processes and challenges, however. This is particularly important when it comes to security. Previous measures simply won’t be enough. Not only will delivering on this future require financial-grade security and authentication protocols, it will also rely upon having the know-how to do so. Clearly, the skills gap in security needs to be filled in order to make this happen. So, balancing investment in both skills and best of breed product solutions is the blueprint for facilitating secure, open finance services. europeanbusinessmagazine.com 53

Why B2B businesses should be happy THAT COOKIES ARE ON THEIR WAY OUT

by Jon Clarke, Founder & CPO, Cyance

months and will need to look towards future-proofed MarTech solutions such as intent data, that do not rely on cookies to provide a longer term solution that generates the same, if not better, insights into customers and prospects. One such solution is Unified IDs.

raditionally, marketers have been able to target campaigns by leveraging data from thirdparty cookies on web browsers. Essentially, cookies allow third parties to identify visitors and see which websites they’ve previously viewed, providing useful insights for targeting. Yet, as we all know, Google has announced the end of cookies. Though this has been postponed, more and more people are opting out of cookies. Firefox and Safari have already blocked tracking cookies by default, and Google itself has announced that it won’t roll out alternative user-level ad identifiers as a replacement for third-party cookies, making cookies

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Why Unified IDs are the next step

a null and void entity, long before the deprecation deadline. As such, B2B marketers will turn their backs on cookies over the coming

Google, Facebook and Amazon are examples of “walled gardens”. Due to the nature of the services they provide, and how ubiquitous they are, they have a lot of 1st party data to track and engage with users. For other players in the digital advertising industry, it’s more complicated. Enter unified IDs.

Created by advertising consortiums, unified IDs are an identity solution which allow advertisers to recognise and track users across multiple platforms – much like 3rd party cookies, but without the need for cookie syncing and with stricter privacy controls in place. Unified IDs often work by requiring a single sign-on. This means that when a user visits a publisher’s website and provides their email address and consent, then they opt-in to receive targeted advertising across all the websites that belong to all the publishers who have a unified ID network.

Advantages over cookies As mentioned earlier, browsers are now phasing out 3rd party cookies. Safari and Firefox only allow 1st party cookies, and that will be the case for Chrome as well in 2023. This, however, is not the case for unified IDs, which will remain a viable option. Digital natives are a lot more savvy now when it comes to cookies and privacy. They are more guarded about their personal data, more selective, and do not provide consent as easily as they did before, particularly when it comes to 3rd party cookies. Furthermore, digital natives aren’t the only ones who are selective - because publishers bear the responsibility and hard work of cookie syncing, they too are careful about whom they collaborate with. Unified IDs don’t require constant syncing, which means a reduced workload for publishers and a chance for advertisers to support each other as opposed to walling themselves off. Finally, regulations like GDPR and CCPA mean marketers and the digital advertising industry must no longer rely on 3rd party cookies to reach and build audiences. It’s not only in the best interests of users, but businesses as well. What the industry needs is a better, unique and anonymous means by which to identify users – thereby transforming the industry to become more “consumer focused” so that user experience leads the way. Unified IDs are part of that transformation.

Key benefits of Unified IDs Unified IDs represent a personal, static, exchangeable and interoperable identifier for each user, taking into account their multiple devices. Unlike cookies, which have a relatively short-term shelf life, unified IDs have a longer in-life user identification period. This makes it much easier to build audiences consistently over time and analyse behaviour trends and activation outcomes. Unified IDs also happen to work in an “omnichannel” manner. This means they provide multi-device functionality and knowledge. So in addition to

traditional B2B channels, it is likely intent behaviour capture and activation will take place from newer channels like SmartTVs, wearables and more. There is a strong possibility that the use of unified IDs will translate into more reliable user identification and improved audience match rates. This improved accuracy and match rates will be a direct result of publishers and tech vendors expanding their UID network. And because of this, customer campaigns will yield much better results from increased engagement outcomes and an improved quality of intent signals. europeanbusinessmagazine.com 55

Real-time Data Platforms and ISO 20022 Drive Revenue Opportunities for Financial Institutions Stuart Tarmy, Global Director, Financial Services Industry Solutions, Aerospike

ignificant changes are underway in the payments industry today, driven by technology, customer demand, and business initiatives such as open banking and a new standardised, international communications system. While this evolution is not pain-free, the good news is that it provides some great opportunities for businesses, such as the availability of better-quality data, XDR found on real-time data platforms, and a chance to improve the customer experience.

The impact of ISO 20022 Let’s start with what’s known as ISO 20022. This is an international standard for all financial communications and data exchanges between financial institutions and payment systems. In other words, it creates a common language. More than 70 countries currently use it and ISO 20022 can be used by anyone in the industry on any network. ISO 20022 has other benefits like providing a better payment experience. With the new standard, payments are faster, more reliable, more secure, and cost less due to better interoperability and the elimination of different standards from various countries and financial institutions. At the same time, institutions can also benefit from ISO 20022 because it dramatically improves the quality of data that is shared about customers. This enables businesses to understand customers better and provide improved experiences. While most financial institutions are in the early days of ISO 20022 migration, Citi is 56 europeanbusinessmagazine.com

accelerating its ISO 20022 adoption in a partnership with Volante Technologies. One of Citi’s goals is to get better payments data to offer to corporate clients. Another benefit: When banks aren’t forced to use unstructured and ambiguous data that can arise from cross-border payment systems and instead rely on common standards under ISO 20022, compliance and efficiency are improved. “Moving to ISO 20022 is definitely worth the effort – and banks should use this watershed moment in the industry to ensure they make the right turns,” advises Accenture. For example, Credit Suisse explains in a case study from ISO, an independent international organization, that using ISO 20022 has improved its communications with other banks and upgraded the quality and quantity of data it can provide to clients. Another major development within the industry is open banking, which also seeks to share more information among institutions.

The impact of Open Banking Open banking – also known as PSD2 Second Payment Services Directive – was launched in 2018. It requires the United Kingdom’s biggest banks (HSBC, Barclays, RBS, Santander, Bank of Ireland, Allied Irish Bank, Danske, Lloyds, and Nationwide) to release their data in a standardised format. But while open banking may be closely linked to the UK and Europe, many other countries are also moving to implement a similar infrastructure, such as South Korea, India, Australia, Canada, Hong Kong, Japan, the U.S., and Singapore.

While this data sharing can provide information to customers such as the locations of various bank branches or where to find the best bank account deals, it also lets account holders give permission for their data to be shared with third parties or even other banks that can use it to create new products and services to attract and retain customers. An example of this type of third-party aggregation service is Intuit’s Mint, a free budgeting app launched in 2006 that puts all a customer’s information in one place, such as loans, credit cards, and investments. Mint has been a thorn in the side of banks for years as it acts as the customer’s ‘window’ into their accounts. More banks are now seeking to become “aggregation hubs” – a sort of go-to portal for all their customers’ financial data, very similar to Mint.

Still, it’s worth noting that sharing of this data may not take off overnight since some consumers are leery of providing private information because of cybercrime and privacy protection concerns. Their acceptance should improve as better communication with customers helps them understand that steps have been taken to make sure privacy and security rules are followed.

A real-time data platform is essential When discussing the changes coming to the payments industry and open banking, you need to include crossdata centre replication (XDR). It’s crucial because XDR provides greater security and flexibility when handling critical data, allowing it to be moved

where and when it’s needed (such as retaining some data in a home country because of data and privacy regulations). It also means that there isn’t a single point of failure that could crash an entire system, and data can be accessed globally when needed. For XDR, it’s key to have a real-time data platform. Organizations need to make sure they have a data platform that can build globally distributed applications and access regional data easily and quickly. In addition, there needs to be ongoing compliance with local data regulations such as those being considered by the United Kingdom. For example, now that the United Kingdom has left the European Union, it’s looking at how to also move away from European data protection regulations and forge its own path instead of complying solely with the General

Data Protection Regulation (GDPR) as it agreed to do before Brexit. It’s expected that the UK’s aim will be to convince other countries that any data protection plan they devise can meet international standards and easily allow for the transfer of information across borders. If not, the UK risks being locked out of data transfers to other countries. There are numerous revenue opportunities for financial institutions because of open banking and ISO 20022, such as the chance to gain more valuable data, better understand customers and deliver improved experiences. But to be successful, it takes the right data platform and an understanding of local compliance demands. With all those pieces in place, financial institutions can realize exciting new opportunities. europeanbusinessmagazine.com 57

THE UK TAX SYSTEM IS ENORMOUS!

WHY IT IS LONG DUE REFORM

he UK’s tax legislation is the longest in the world, standing at 22,000 pages. That’s the equivalent of 97 copies of Harry Potter and the Philosopher’s Stone back-to-back. Don’t be fooled into thinking this is the sign of a robust system. Rather than rewriting parts of the tax system as things change over the years, it has instead just been updated. Consequently, this is what makes it so long and that has contributed to the high level of bureaucracy embedded in the system. It also means that it’s easy, for those with sufficient resources, to find ways of circumnavigating the system to find loopholes. This doesn’t just present a problem for business owners who aren’t au fait with the ins and outs of the UK tax system, but also for accountants and HMRC whose job it is to provide in-depth tax knowledge. Any accountant that claims they know every page of the tax code is being somewhat economical with the truth. UK taxation is so complicated that it’s even hard for HMRC to fully enforce. This level of convolution means it’s easy for business owners to make mistakes, potentially leading to big fines worth thousands of pounds. It also leaves opportunities for less than reputable advisors to find ways help clients avoid tax through questionable strategies that bend the rules and can backfire at a very high cost to all concerned.

How the system is exploited Given the system is so long and complex that no one really understands it all in its entirety, it’s not hard to see 58 europeanbusinessmagazine.com

why UK taxation is open to abuse. The more layers of laws there are, the more opportunities appear for clever tax advisors to take advantage and try to reduce their client’s tax liabilities. They do this by exploiting legislation to pay as little tax as legally possible. This is well known as tax avoidance. Organisations such as Starbucks, Google, and eBay (to name just a few) have, over the years, all used methods such as these to reduce their corporation tax liability. So much so, they have paid incredibly little when compared to their sales revenue. This is achieved through a combination of strategies that makes use of their operations in multiple countries. To date, corporation tax has only been paid on profits generated in the UK. So, for tax purposes, each division within the corporate structure is treated separately which is utilised by tax advisors. To reduce profits, they have employed strategies such as: 1. Funding UK based operations from overseas head offices through loans. Essentially this means that the UK-based part of the business borrows money from the group. This method incurs interest payments with the rate set by the controlling company (the group). This inter-company interest charges are purposefully made high to help absorb some of the profits made in the UK. 2. Creating franchises to base royalty and licensing agreements in a low tax jurisdiction. This allows an organisation to charge operations based in the UK for use of their brand and name. This can be

charged as a percentage of sales which reduces profits. 3. Carrying forward historical losses incurred when operations were originally set up in the UK. These can then be used against subsequent profits to help reduce tax liabilities. Such strategies have played into the international tax system to ensure that large international groups can shift their profits to pay corporation tax at the lowest rate. They can do this because multi-national corporations have the resources to pay for highly intricate tax advice. Individuals and SMEs often don’t have the same access to resources, resulting in significant inequalities within the tax system.

What needs to change? There are global tax reforms on the table which if passed, will introduce a minimum 15% global profit tax rate. These would also be based on the place of sale, rather than the organisation’s place of residence. That then may help mitigate against some of the tactics explained above. However, for individuals and SMEs, quite simply, the only way to fully solve the issue relating to tax legislation is to rewrite the book. It’s hard to argue with this when you compare our tax code to those overseas. Take Hong Kong, for example. The highest rate of tax in the region is just 17%. There is no Capital Gains Tax, no inheritance tax, no tax on

dividends, and no VAT. Its rate of corporation tax is also lower than ours, at just 16.5%. Despite the lower rates of tax, residents are almost 25% better off than their British counterparts when GDP per capita is adjusted by purchasing parity. What’s more, Hong Kong’s entire tax code is just 350 pages long. That equates to just over one copy of Harry Potter and the Philosopher’s Stone.

In Summary Over the years, various Governments and politicians have added layer upon layer to the UK’s tax code. To counteract certain tax increases, some Governments introduced tax reliefs and allowances. This appears

to have been the strategy for updating a system created in an analogue era, that is now operating in an increasingly digital and, at times, borderless world. On top of these conflicting policies, VAT, Capital Gains Tax, Inheritance Tax, National Insurance, and the taxation of pensions have become difficult to understand and get right. In 2010 the Office of Tax Simplification was introduced to offer independent advice to the Treasury on how to simplify the taxation and make things easier to understand. However, despite this recognition of the complexity of the tax system, there has been little to no changes in the past 11 years. Can adding yet more layers to an already overly complex set of laws really improve the situation better? Won’t this just make things even harder to understand? An overhaul of the current system would appear preferable in the name of simplification. Accountants and tax advisors might then be able to make sense of it all. It would also cut the amount of time entrepreneurs waste trying to calculate their tax liability and fretting about whether they’ve made an error in doing so. Needless to say, this would also be far more straightforward for HMRC to police and that in turn could improve the tax take, helping the government to achieve a budget surplus and pay down the national debt. The argument may sound compelling but the government at present shows no signs of commitment to reform. The aspiration to simplify may have been present in establishing the Office of Tax Simplification however, the reality of individuals and businesses behaviour is such that the government may feel they can’t do anything other than legislate more in the name of fairness and wealth redistribution. For now, business owners and entrepreneurs should continue to work closely with their accountant to ensure that their finances are up to date and accurate, to prevent mistakes and potential costly fines. For more information, please visit www.wellersaccountants.co.uk. europeanbusinessmagazine.com 59

Decarbonising Strategies For Businesses to Achieve Their Net-Zero Ambitions

By Professor James McCallum, Co-founder and Chairman of Proteus developed by Xergy

t the turn of the millennium, the energy industry faced a deep crisis. With oil and gas prices plummeting, the continued existence of hydrocarbon supply from the North sea was under threat, exposing the fragility of our economy. Unprecedented levels of collaboration across industries, government and academia brought the changes needed to survive. As we learn to live with the impact of the global pandemic, it is fundamental we do not lose the Herculean collaboration spirit in what can be achieved. The need for us to address the immediate requirement for decarbonisation

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means we must drive the transition faster. When much of the world’s energy infrastructure functions to support fossil fuels and traditional heavy industry operates with outdated business practices, this is easier said than done. Technological and environmental challenges have been at the forefront of innovation and reinvention of UK businesses for over fifty years, hence why digital transformation is crucial at this very moment.

A lack of new digital methods The benefits of digitalisation can come into effect almost overnight. The application of work management automation tools optimise business processes and combat the challenges businesses face, such as

the development and productivity of existing IT infrastructure. The digital tools to replace the old with new and improved technology are already out there, but unfortunately, the sense of urgency to adopt new digital methodologies is still lacking. Companies are not yet convinced. Whilst digital transformation may be paramount to efficiently decarbonise the UK economy and continue to operate effectively in the future, the key question remains how to increase adoption?

Engaging a new generation of talent From an operational perspective, investing in carbon-efficient digital technology that maps business

gig workers. Hiring can be challenging and lengthy, but recruiting software platforms can help access and inform some of the reluctant knowledge from the best green energy talent available worldwide. Attracting and retaining talent in a way that reflects decarbonisation goals is now an essential component of the discussion. The adoption of remote, flexible workplace systems that embrace the aspirations of the gig economy will be an increasing part of the mix and the solution. This is hugely important, as the next generation of talent is looking for an attractive work environment without frustrating processes and slow decision making anchored around a long commute or decisions made at the pace of multiple committees. In a nutshell, businesses need to adapt to a new way of working or risk being labelled dinosaurian or worse consigned to the history books.

The foundation of a low-carbon future

processes is one way to drive the innovation needed to support a complete digital transformation. However, a shift in mindset is also essential. Management may be stuck in their ways and not just unwilling to make the changes needed, but also incapable. The younger, digitally enabled generation are perhaps more adept to embrace such advances. Businesses need to focus on attracting such talent, particularly in the energy industry, to help identify, adopt and manage the new systems and technology. Careers in the energy sector once solely reliant on hydrocarbon energy resources are no longer considered an attractive prospect to young, environmentally savvy talent eager to change the world. The industry’s

objective must be to demonstrate a meaningful cultural shift to invest in low-carbon solutions which support the global energy transition agenda. It is imperative that companies recruit with the emphasis of decarbonising businesses in mind and genuinely convey that they need help to reach this goal with the support of fresh, young talent.

The power of software Specialised talent software is an excellent, simple, low capital expenditure for businesses to start their decarbonisation journey. Talent software can offer an efficient way to access new talent and allow companies to post ads for specific low-carbon projects, search for rated talent and engage

As the climate crisis looms, businesses must reflect on strategies to improve the utilisation of hardware, software and intellectual assets. This will improve capital and carbon efficiency and give them a platform for continuous improvement. As we come out the back of a global pandemic, striking a balance between energy security, decarbonisation and growth are the challenges businesses face. Without addressing the low-carbon dimension of running a business, not only will the demise of our environment continue, but intellectual and capital investment will relent. Digital transformation will be pivotal in enabling our economy to transition. Streamlining processes to reduce waste and energy consumption and improve resource utilisation will be key. Finally, a willingness from leaders to change will be essential. Investing in decarbonising businesses may prove to be both the currency of a business’s right to exist and the foundation of a viable low-carbon future for our planet. europeanbusinessmagazine.com 61

PREPARING FOR THE FUTURE WITH CLIMATE INTELLIGENCE

By Iggy Bassi, CEO & founder, Cervest

he curtains have closed on COP26 and despite the jury still being out as to whether the Summit was a success, climate action is driving regulatory change with very real implications for businesses. In the near future, UK and US companies will be required to disclose their climate

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risk. Following the latest release of Task Force on Climate-Related Financial Disclosures (TCFD) recommendations, mandatory reporting is now being steadily rolled out across the UK and will be fully in place by 2025. In the US, President Biden released an Executive Order “to advance consistent, clear, intelligible, comparable, and accurate disclosure of climate-related financial risk”. Companies in both the UK and US need to take action now to get ahead of mandatory disclosure coming into force.

How prepared are organisations? A recent report from Climate Intelligence company Cervest surveyed 800 UK and US business decision makers on their climate strategies. They found a significant gap between company

awareness and company preparedness for climate risk reporting. Ninety percent of companies are aware of the pending disclosure requirements, but the majority still need to invest in talent and software to fulfill these requirements. Sixty three percent of companies claim they are planning to disclose their climate risk within the next 12 months, but many will need to invest in new solutions to meet new regulations. Companies that are already voluntarily reporting are taking action to embed climate risk strategies into decision-making across their organizations. However, 42% lack the actionable climate insights necessary to report on their climate risk. Even when they have access to data, companies are finding translating it into meaningful insights a challenge because climate data is often complex and fragmented. This is why companies are seeking software and tools to help them implement their climate disclosure. It is clear that Climate Intelligence is in demand, yet only 37% of organisations have plans in place to adapt

with climate change. Without the necessary insight to make plans to build resilience, companies cannot hope to make accurate disclosure on their climate related financial risk. Even with the best intentions, lack of clarity on climate risk could lead to underreporting or wrongly attributing carbon emissions.

Getting ahead on climate disclosure could be a competitive advantage There are clear and tangible benefits to getting ahead on disclosure and building the capacity . Climate risk is financial risk. The survey revealed that 83% believe disclosure will have a positive financial impact on their organization. For instance, access to climate insights allows businesses to disclose their climate risk to meet regulations and avoid possible fines, and it will also allow businesses to put climate at the core of every decision. From taking actions that protect assets against increasingly volatile weather events, to finding opportunities for future investment, Climate Intelligence is crucial for future business operations. Those planning to invest in the insights, software and training necessary to become climate literate stand to gain a significant

competitive advantage within their industry sector. With frameworks like the TCFD still evolving, what is really needed is standardization on climate risk. To make disclosure reporting valuable, climate intelligence must be derived from a single, standardized source of truth. Universal disclosure standards would ensure accountability, transparency and trustworthiness across industries, and allow for cross-industry comparisons. We also need standardization in place to resolve disclosure conundrums facing organisations with multinational assets, or those who work across multiple industries.

Net Zero is essential but insufficient While COP26 progress on Net Zero may not have met expectations, it’s clear that organisations are not waiting for policy to set ambitious climate goals. The survey found the vast majority (88%) of respondents are setting Paris-aligned emission targets (Net Zero by 2050). However, in focussing on Net Zero, companies need to be careful not to overlook adaptation. Decarbonization is essential, but it’s insufficient. Companies need adaptation strategies in place

to build climate resilience and be prepared to face the already locked-in effects of our changing climate. Overall, Cervest’s survey results highlight that integrating physical risk and adaptation into their climate risk strategies will strengthen organisational climate resilience and enable more coherent disclosure reporting. It’s clear that businesses are motivated to remove barriers to accurate climate-related financial disclosure. With an increasingly volatile climate, a greater frequency of extreme weather events, and mandatory disclosure rapidly approaching, it comes as no surprise that companies are pursuing a number of different activities to improve their climate literacy and build capacity for climate intelligent decision-making. The ability to accurately quantify climate risk and carbon footprint presents a complex accounting challenge for many companies, requiring significant upskilling, monitoring and resourcing. Yet, as more forward-looking companies take a climate intelligent approach to disclosing their climate risk, others will follow, leading to a global network of climate intelligent organisations that will drive climate change transformation in a more positive direction and at a greater scale. europeanbusinessmagazine.com 63

Is Elon Musk is wealthy enough to bring free speech to the tech platform

lon Musk is the planet’s number one billionaire. If anyone can turn cyberspace into a heaven – or hell – of free speech “absolutism” via a US$44 billion (£35 billion) Twitter takeover, then surely he’s the man. Right? When free-market elephants like Musk or Jeff Bezos (who bought the Washington Post in 2013) take charge of major mass-media outlets, concerns are raised about the direction of free speech, which remains the essential ingredient of democratic participation. This feeds into wider concerns around the ever-increasing privatisation of public spaces. In the online age, the fact that we spend so much of our time in private spaces earning advertising revenues for billionaires is seen by many as an affront to human dignity. The Twitter deal may only move

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ownership from one set of private hands to another, but the fact that the world’s richest (and controversial) billionaire is involved seems to make it worse. But the reality is more complex. The nostalgic idyll of free speech is that once upon a time there was a “town hall” or “public square”, where citizens would come together as equals to debate the issues of the day. Every idea could be freely aired because an enlightened citizenry would sift truth from falsehood, good from evil. The people’s elected representatives would then proceed to reach conclusions faithful to the “will of the people” and would frame wise laws accordingly. Those images of a town hall or public square are assumed to be public in the full sense – they are freely open to all, and no private citizens own them.

In fact, no such arenas have ever existed, at least not in modern democracies. In years gone by, blasphemy laws in many western nations placed restrictions on people’s abilities to speak with candour about what was, at the time, far greater church influence over public policy. More importantly, women, ethnic minorities, colonised people and others often enjoyed nothing like the prerogatives to speak out without fear in the public forum, let alone as equal citizens.

It was never quite like the brochure. Yarikart Yet myths often contain a grain of truth. There can be no question that protest and dissent which used to take place in public spaces has now largely shifted to online media platforms that are owned

and operated by private companies. (We do still have street demonstrations, yet even they rely upon online publicity to swell their numbers.)

Public power Yet if we should not underestimate the power of private media interests, neither should we overestimate it. Almost the same day as Musk’s Twitter deal broke, the European Union announced it would adopt a Digital Services Act. This will vastly increase the bloc’s powers to restrict content that promotes terrorism, child sex abuse, hate speech (which the EU has tended to define in broad terms), disinformation, commercial fraud, and other speech that poses problems for individual safety or democratic society. I should say, as I have written elsewhere, that I disagree with several elements of the EU law, and of similar UK rules, but that is not the point here. The point is that even Musk’s billions will not shield him. He can go ahead and fire all Twitter’s speech monitors if he wants to, but it will not be long before he needs to

rehire them. For each of the categories of content that are covered in the EU law, hefty fines can be levied for breaches, so the only way to avoid the fines would be to continue doing monitoring. In fact, why were these monitors ever hired in the first place? It was not because Facebook, YouTube, Twitter and other online platforms started out with a profound social conscience. Quite the contrary: they started out very much as the supposed free speech absolutists that Musk now fancies himself to be. As American companies, they assumed they would follow free speech law as set down under the first amendment to the US constitution. Since the 1960s, the US supreme court has construed the first amendment to allow more provocative speech than other nations have allowed. Nonetheless, and contrary to popular belief, even US law is by no means absolutist about free speech and never has been. Loads of speech is regulated, such as restricted military data, professional confidentiality agreements and details of jury proceedings, to cite only a few among many examples.

As I explained in my 2016 book, Hate Speech and Democratic Citizenship, no society has ever permitted absolute free speech, and nor is that something that any legal system would ever have the means to sustain. Our arguments about regulation are always about degree, and never all or nothing.

Talk is cheep. Rokas Tenys Unsurprisingly, the first-amendment bubble of the big US online media platforms quickly burst. Given their global reach, they are subject to the laws of all nations in which they operate. Once the EU started cracking down, these companies were suddenly hiring legions of online monitors. And the new EU laws – completed before Musk’s takeover was even in the works – show that countries hosting key markets can bear down even harder. The coming showdowns will therefore not be between dictatorial censorship in the one corner and free speech absolutism in the other. They will be between business and governments. And as Elon Musk will soon be aware if he is not already, plenty of governments seem up for the fight.

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merging technologies, such as artificial intelligence, blockchain and distributed ledger technology, paired with international policy coordination could propel global trade and accelerate economic recovery, according to a joint report by the World Economic Forum and the World Trade Organization. TradeTech – the set of technologies that enables global trade and its digitalization – is a critical part of supply chain resilience and a path to more efficient and inclusive trade.

While the benefits of TradeTech are promising, uneven development could result in unequal growth, cybersecurity risks, fragmented “digital islands” and techno-nationalism. Building international policy coordination through public-private partnerships would advance TradeTech adoption across borders. Trade agreements can play a key role in this regard. Recent trade agreements and plurilateral initiatives have started to explore the interplay between technology and trade. The new report, The promise of TradeTech: Policy approaches to harness trade digitalization, was released today by the Forum and the WTO. The TradeTech community has identified five specific policy frontiers – the “5 Gs” of TradeTech – that drive adoption and scalability in an inclusive manner: • Global data transmission and liability frameworks • Global legal recognition of electronic transactions and documents • Global digital identity of persons and objects • Global interoperability of data models for trade documents and platforms • Global trade rules access and computation laws This work builds on the Trade for Tomorrow call to action in 2021, signed by 30 CEOs and chairpersons 66 europeanbusinessmagazine.com

from five continents, urging world leaders to make trade work for all as part of an inclusive global recovery. One specific action was advancing an electronic commerce agreement that improves access and interoperability, enables safe and efficient digital trade and data flows, promotes openness and trust, and addresses market access issues – with the “5 Gs” contributing towards that end. “The Forum and the WTO are glad to be working on public-private partnerships that enable the further adoption of technologies in trade, in the goal of efficiency, inclusion and environmental gains,” said Børge Brende, President, World Economic Forum, at the report launch. Emerging technologies and digitalization are changing trade. Only 18% of trade in goods is now driven by labour cost arbitrage. Value chains are

becoming increasingly knowledge-intensive, thanks in part to embedded technology. The COVID-19 pandemic has shown that digital trade and commerce are necessary for the survival of small and medium-sized enterprises, while the application of autonomous technologies – from robotics to AI – contributed to the operation of ports and warehouses with minimal staff during lockdowns. According to a World Economic Forum survey, 65% of organizations have incorporated new technologies, resulting in reconfigured value chains and increased visibility of value chain data. Ngozi Okonjo-Iweala, Director-General, WTO, said: “Advanced technologies have the potential to make trade more efficient and more inclusive, but for this to happen policy action needs to keep pace with technological developments.”

Factories of the future call for responsible scaling that prioritizes planet and people

he World Economic Forum announces today the addition of 13 new sites to its Global Lighthouse Network, a community of 103 world-leading manufacturing facilities and value chains using Fourth Industrial Revolution technologies to increase operational performance and environmental sustainability. Local manufacturing and supply chain resilience are crucial in the current geopolitical context, as organizations strive to engage their workforces and sustain operations amid international unrest and economic headwinds. There are also new pressures to maintain sustainability commitments and accelerate the transition towards renewable energy, while addressing more immediate energy market disruptions. Members of the Global Lighthouse Network are applying advanced technologies to increase supply chain resilience, augment green measures and boost workforce engagement while bolstering productivity. The result: 66% of lighthouses made sustainability improvements by reducing consumption, resource waste and carbon emissions, and 82% increased productivity. Three lighthouses with outstanding environmental footprint reductions are gaining the additional designation of Sustainability Lighthouses. These global leaders are gaining momentum in achieving their sustainability pledges and greater operational competitiveness by realizing the potential of Fourth Industrial Revolution technologies in operations. A new report, The Global Lighthouse Network Playbook for Responsible Industry Transformation, outlines how manufacturers are effectively scaling Fourth Industrial Revolution technologies and achieving all these results at once.

“As the world grapples with many challenges, it is remarkable to see how lighthouses are yielding sustainability benefits while achieving business goals, which we call eco-efficiency,” said Francisco Betti, Head of Shaping the Future of Advanced Manufacturing and Value Chains, at the World Economic Forum. “We need them to continue illuminating the way forward for the global manufacturing community by shaping a responsible future of manufacturing that works for people, society and the environment.” Enno de Boer, Partner, McKinsey & Company and Global Lead of its digital manufacturing work, added: “The 103 lighthouses show how digital technologies drive value chain resilience, growth, and environmental and people sustainability. In the past, sustainability and resilience have often come at the cost of efficiency, but that is no longer true. Companies now have a digital playbook and tech tools at their disposal to make their operations more flexible, more agile and more sustainable. With these tools, they can amplify human capability, achieve sustainability breakthroughs and accelerate technological innovation – the recipe for smart manufacturing.”

The latest cohort of lighthouses will be officially presented at the Global Lighthouse Network Lighthouses Live event, which will feature chief executives and global manufacturing leaders focused on scaling digital solutions across their production networks to drive operations towards carbon neutrality and boost workforce engagement. The event will be livestreamed on 6 April 2022 (14.0015.15 CET) here.

The 3 new Sustainability Lighthouses are: The Janssen Pharmaceutical Companies of Johnson & Johnson (Cork): Janssen Sciences Ireland Unlimited Company has been long supporting regional initiatives for sustainability improvement and now enabling the corporate 2030 pledge of carbon neutrality. Through Fourth Industrial Revolution-enabled real-time release, adaptive process control and other sustainability efforts, the site has optimized its processes and reduced carbon emissions per kg of product by 56%, while the site footprint has expanded by 34% to meet growing business needs. europeanbusinessmagazine.com 67

Schneider Electric (Le Vaudreuil): Schneider Electric Le Vaudreuil has implemented industrial internet of things (IIoT) sensors connected to digital platforms, unlocking data to optimize energy management by 25%, reduce material waste by 17% and minimize CO2 emissions by 25%, with the objective to be net-zero carbon by 2025, without offset and ahead of the global Schneider Electric pledge. The smart factory is equipped with a zero-reject water recycling station connected to cloud analytics and monitored by an artificial intelligence (AI) model to predict process drifts, leading globally to 64% in water reduction. Western Digital (Penang): Western Digital achieved a reduction in energy by 41%, water consumption by 45% and material waste by 16% through a vertically integrated smart factory. Fourth Industrial Revolution technologies, such as internet of things (IoT) sensors, digital twin modelling, analytics powered plant management system and lights-out automation with machine learning, increased their sustainability impacts, while the site grew 43% (Compound Annual Growth Rate) in the last four years. This concerted effort enabled the Malaysia Green Building Index (GBI) certification for the site.

The 13 new lighthouses are: Europe The Janssen Pharmaceutical Companies of Johnson & Johnson (Latina): Janssen Latina has been deploying Fourth Industrial Revolution solutions that deliver faster, competitive and agile launches of new products and quality release, led non-conformance reduction by 30% and product release lead time optimization by 84%, while reducing energy costs by 10% and logistics labour costs by 72%. Sanofi (Paris): With the ambition to accelerate saving generation, Sanofi embarked two years ago on a digital and analytics 68 europeanbusinessmagazine.com

transformation of its procurement operations. To date, it has built and deployed six products – data platform, should-cost modelling and input-cost monitoring, smart tender analytics, supplier performance tracker and cockpit – that have delivered 10% savings on addressed spent and transformed the way of working. Teva Pharmaceuticals (Amsterdam): Global Procurement is the main contributor to Teva’s ambitious Gross Margin Improvement Program and contributes to the Free Cash Flow target, delivering three times historical Cost of Goods Sold (COGS) savings by the end of 2024. To achieve this, Global Procurement implemented Fourth Industrial Revolution technologies within 1.5 years, increased

labour efficiency by 30%, upskilled its workforce and optimized cross-functional processes to break down silos. It is leading the way in Fourth Industrial Revolution technologies at Teva.

Asia BOE Technology Group (Fuzhou): To pursue premium product market share with high-quality expectation, BOE Fuzhou has widely adopted AI and advanced analytics in a fully automated production system to achieve best-in class quality excellence, equipment efficiency and energy sustainability with a new product yield ramp-up period shortened by 43%, cost per unit reduced by 34% and output increased by 30% without major capex investment.

plants and customers. This has sped up order response lead times by 25%, increased production efficiency by 31% and improved quality performance by 26% from 2020 to 2021. Johnson & Johnson Consumer (Thailand) Ltd. (Bangkok): Facing agility, profitability and cost to serve challenges, Johnson & Johnson Consumer Health site in Bangkok adopted Fourth Industrial Revolution technologies, such as collaborative supply chain control tower, computational fluid dynamics, AI energy optimization and advanced data analytics on logistics. The value chain delivers 47% revenue growth with 25% inventory reduction, and it reduced 43% end-to-end supply chain lead time, 42% productivity improvement and 20% carbon footprint optimization. LG Electronics (Changwon): Facing growth of its product portfolio complexity by 70%, rising quality expectations from customers and labour shortages, LGE redesigned an old factory in Changwon, South Korea, into a digital plant leveraging flexible automation, digital performance management and AI to improve productivity by 17% and field quality by 70%, while reducing inventory by 30% and energy consumption by 30%.

Bosch Automotive (Changsha): Facing a 20% labour wage increase, year-over-year 10%+ price reduction request from customer and high fluctuation in customer orders, Bosch Changsha implemented 45 Fourth Industrial Revolution use cases with automation and AI to increase competitiveness, maintained the market position with 100% NEV (new energy vehicle) customer portfolio penetration and reached carbon neutrality. Haier (Zhengzhou): Facing a booming market for water heaters and increasing requirements of high-end products and services, Haier Zhengzhou, leverages big data, 5G edge computing and ultra-wide band solutions to build a close connection with suppliers,

Midea (Jingzhou): Due to consumer expectations with higher product complexity, Midea Jingzhou, as a 30-year-old factory, adopted flexible automation, IoT and AI at scale to transform the manufacturing system, increase labour productivity by 52%, reduce production lead time by 25% and eliminate 20% utility consumption per unit. Midea (Hefei): Targeting domestic high-end product segments and oversea market expansion, Midea Hefei Laundry Appliances widely deployed AI and IoT technologies across end-to-end value chains to form a faster response and higher efficiency supply chain, which resulted in a lead time reduction by 56%, customer report defect rate reduction by 36% and labour productivity improvement by 45%.

Procter & Gamble (Guangzhou): To meet 45% increased e-commerce demands, P&G Guangzhou leveraged AI, flexible automation and digital twins to integrate multi-systems across its value chain to serve omni-channel consumers. This increased the responsiveness of their supply chain with 30% reduction of inventory, 15% reduction of logistics cost and 99.9% on time delivery within three years. Schneider Electric (Hyderabad): Facing changing customer demands and a 54% business growth, Schneider Electric implemented Fourth Industrial Revolution technologies such as IIoT infrastructure, predictive/prescriptive analytics and AI deep learning. This has resulted in reduction of field failure by 48% and lead time by 67%, while manufacturing efficiency improved by 9%. Unilever (Dapada): Driven by the need to accelerate the pace of innovation and speed of response to consumer demand while augmenting cost competitiveness in an increasingly challenging market, and acting on sustainability goals, Unilever Dapada deployed digital, automation and AI-ML across its end-to-end value chain to shorten product development lead time by 50%, reduce manufacturing cost by 39% and energy by 31%. About the Global Lighthouse Network The Global Lighthouse Network is a community of manufacturing sites and value chains that are world leaders in the adoption and integration of the cutting-edge technologies of the Fourth Industrial Revolution. Lighthouses apply Fourth Industrial Revolution technologies such as artificial intelligence, 3D-printing and big data analytics to maximize efficiency and competitiveness at scale, transform business models and drive economic growth, while augmenting the workforce, protecting the environment and contributing to a learning journey for all-sized manufacturers across all geographies and industries. The Global Lighthouse Network is a World Economic Forum initiative in collaboration with McKinsey & Co, factories and value chains that join the Network are designated by an independent panel of experts. europeanbusinessmagazine.com 69

A new chapter in the books of “Evolution of Money” – Central Banks Digital Currency By Komal Motwani, CFP®

hange is the only constant. We’ve heard this from monks to philosophers when they describe life. It isn’t complex, it’s just a series of ‘constant’ changes. The same can be said to everything in life, and financial institutions are no different. In the chronicles of history, this evolution will go down as a major shift in the world of finance. The Future of Money is evolving. And this step, in evolution is a major jump to a new financial order. “Central Banks Digital Currency” aka CBDCs. A digital version of the country’s fiat currency having fullfaith and backing by the governments. Today, most businesses and consumers are taking advantages of the available digital platforms. Exchange of paper money is being replaced by electronic (cashless) transactions at a lightning speed (flared by Covid-19 changes). From direct deposits of salaries in the bank accounts to direct payment of bills, credit cards etc., paper money does not really exchange hands in this technology driven era. From paper, the first step was towards plastic (credit cards). That took some decades to establish, secure and make it the new norm. From plastic, the next step is digital. And that step has arrived. A CBDC is an electronic form of central banks money represented in the national unit (e.g., U.S dollar) and considered a legal tender that can be used to make payments like physical currency in circulation. There are twothree types of CBDCs, retail or general use for public, wholesale, and hybrid. Though, Cryptocurrency’s and CBCDs may use similar platforms like “Blockchain Technology.” CBDCs however are not crypto currencies. Unlike crypto currencies (such as Bitcoin) that are decentralized and volatile in valuation, CBDCs are not as volatile as their value is pegged to the country’s currency and issued by Central

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Banks. Currency pegging means that a country’s currency is attached to another currency or baskets of currency. The currencies will fluctuate in the same manner. CBDCs are still early stage of development hence the features are still in evolving and changing. According to CoinDesk, “the technology used today is DLT or Distributed Ledger Technology, where in banks and other financial institutions keep records of transactions in a ledger form. Instead of one centralized data storage, DLT stores several copies of this transaction history that is each stored and managed by separate financial entity. Central Banks manage this entire database from top-down approach.” Are there any tangible benefits in the near future of this shift? Yes, a few. Cost effectiveness, is one. Whereas managing and distributing physical currencies can be expensive, CBDCs could also improve efficiencies in cross-border transactions by avoiding long payment chains. It also helps facilitate safe and direct transactions thus eliminating the middleman “financial institutions like banks”. More and more countries are exploring CBDCs one way or the other. On

the other side, the higher technology and securitization (privacy) of the digital transactions cost can be counter intuitive to the benefit of cost effectiveness in the long run. So, it is a double-edged sword, like any new technological advancement. In the Bahamas, the Sand Dollar—the local CBDC—has been in circulation for more than a year. Nigeria became the first African country to launch eNaira, a digital currency that can be used for contactless payments. In China, the digital Renminbi / digital Yuan [called e-CNY,] continues to grow popularity. India’s RBI’s digital Rupee will debut most likely in 2023. The European Central Bank (ECB), Bank of England and the U.S. Federal Reserve also announced that they are considering launching digital currencies. However, these are still early stages, and we do not know how fast they will be accepted globally but then again Central Governments are taking the interest to familiarize themselves with the nitty gritty of CBDCs. The transition from plastic to digital is well on its way and we are at the cusp of this evolutionary transition in history.

How Corporate sanctions against Russia are bringing a new level of social responsibility

conferences like COP26; they respond to sustainable development goals set by the UN; they invest in and report on their environmental and social responsibilities. We have found that a developing moral awareness from corporate decision makers is helping to undo a traditional “us and them” form of leadership which is being replaced with a sense of “us with them”. Businesses of all sizes and in all sectors – coffee sales, metal manufacture, house building, public relations – are raising the value of their business while making a positive social impact at the same time.

Profit and power

he war in Ukraine has resulted in many of the world’s biggest companies deciding to stop doing business with Russia. McDonald’s, IKEA, Apple are just some of the well known corporations making a stand. But why have they done this? After all, a famous rule of economics states that the social responsibility of business is to “increase its profits”. Surely by closing themselves off from such a large country, these companies will take a financial hit? Perhaps then, the social role of business has changed, and the professional duty to maximise shareholders’ interests and keep businesses growing is no longer all encompassing. After all, the leaders of these large organisations are also citizens of the world; moral beings who want to do the right thing. And employees who feel anguish over the images coming from Ukraine will also expect their bosses to respond appropriately. Of course, we could also interpret such a “moral stance” as having no altruistic motivation whatsoever. Withdrawing from the Russian market may be nothing more than an attempt to minimise potential damage to a company’s global reputation and brand – particularly if they are seen as being out of step with a competitor.

For, as the Scottish economist and philosopher Adam Smith proclaimed back in 1776: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest.” According to this view, the purpose of supplying what a customer needs is no more (or less) than an exchange process designed to generate profit. But there is an alternative explanation for McDonald’s, Starbucks and the rest closing their outlets in Russia – something called “enlightened self-interest”. This is where acting to enhance the interests of others will eventually benefit your own interests. Put simply, it means a business doing well by doing good. I am part of a research group examining this approach, with the aim of showing how a sense of responsibility and purpose can be both financially profitable and also generate what we refer to as “good dividends” – developing a new theory of business which integrates profit, people and the planet. This does not mean the idea of acting solely in the interest of shareholders is dead. But we are in a very different context now. Corporations are involved in climate change

Decisions about doing business in Russia show how this works at a global level, where many corporations are as large as countries. Indeed, comparing the value of the largest companies (revenue) to countries (GDP), 150 out of the 200 richest global entities are businesses. The US retail giant Walmart is wealthier than Australia. The “economies” of Shell and Toyota are each larger than those of Mexico or Sweden or Russia. So alongside a country’s political sanctions, many large companies have the financial muscle with which to make an impact; when they walk away from doing business with a country, the citizens (and politicians) of that country cannot fail to notice. This is why I’m inclined to see corporate actions against Russia as more than just good PR. Business leaders are not immune from society’s concerns, and nor do many of them want to be. So maybe the business world has turned an important page, and the stand it is taking is evidence of a new way of understanding its purpose and role in society. For away from the horrors of Ukraine, there are many issues – climate change, poverty, oppression – which demand the business world’s urgent attention. Perhaps future generations will point to the early 2020s as a time when the relationship between business and society fundamentally changed. For humanity’s sake, let’s hope so. europeanbusinessmagazine.com 71

The Proliferation of Embedded Finance

Ivo Gueorguiev, Co-founder and Executive Chairman at Paynetics mbedded finance is revolutionising the way consumers and businesses make payments, as a growing number of brands incorporate financial products into their core offering.

This payment solution brings the bank to the consumer, rather than the consumer having to go to the bank, as it has been for centuries. This paves the way for businesses to form stronger relationships with customers, which is essential to preserving loyalty in the face of increasing choice and competition, as well as developing new revenue streams.

Embedded finance allows consumers to access the services they need when and where they need them, and pay for them without extra steps. For example, it’s possible to order an Uber, apply a promotion, split the fare and seamlessly pay one’s share with a few simple clicks - all without leaving the app.

What makes this solution particularly exciting is that we’re only at the start. In the next few years, embedded finance will be integral to how businesses transact with customers - and this is a paradigm shift and very significant for investors, consumers and businesses alike.

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A lucrative investment opportunity Embedded finance is set to disrupt the entire payment ecosystem. The total European payments market is worth over EUR 400 billion in revenue, with the majority of it now reserved to specialised financial institutions, mostly banks. What embedded finance will do is shift a large part of this revenue to non-financial players as they start embedding payment solutions within their own ecosystem. That is why it is such an attractive prospect for investors, the growth potential is huge. For instance, instead of outsourcing the payment to banks or acquirers,

merchants can embed the payment within their flow and be part of it. They would still need to work with a financial services provider for the actual building blocks but they would control the flow and share the revenue.

Improving the customer shopping experience Today’s consumers want innovative products that make their shopping experience simple and convenient, whether that’s online or in-store. Applications such as Deliveroo allow customers to buy their favourite takeaway without once having to leave the app. Consumers are therefore able to seamlessly go through the entire purchasing journey on one single platform. Additionally, embedded finance is reshaping business models – for example, to a lot of customers, BNPL is viewed as a simple and low cost form of credit that allows them to accelerate the purchase of goods and services. It is essentially the digital equivalent to store cards ten years ago. Having a BNPL option at the checkout stage mitigates the risk of checkout abandonment, as they no longer have to go through multiple checkout steps and end up on a third party interface. In turn, this enables businesses to maximise revenue and provide customers with a seamless buying experience.

Embedded finance for businesses Up to now, embedded finance has focused on the retail consumer market. However, over the next few years, we will see it used more commonly in the corporate world as well, particularly in business-to-business transactions. This will be particularly true for SMEs where inefficiencies prevent them from accessing higher value-added services. Embedded finance will change that. There are over 50 thousand companies in Europe that provide various services to SME merchants, soon they will all be able to bundle payments and banking as part of their offering. This will result

in improved access to capital as new lending products become available to SME-type businesses. Embedded finance is also a perfect instrument for companies with a large client base as it allows them to better leverage customer relationships, enrich it, grow loyalty, reduce churn, and design new revenue streams. Sectors ripe to embrace embedded finance include utilities, telecoms, and hospitality - especially large chains with a strong regional or global presence. Other sectors to be impacted by the possibilities offered by embedded finance include businesses with models where there is substantial use of cash. This is very much the case with the home care industry where we have a growing sector relying almost entirely on cash payments, creating a lot of logistical, security, and reporting issues. By adopting embedded finance, industries like home care are able to make funds available in real-time, manage spend to ensure it is appropriate, and provide access to both on-line and in-store retailers.

Enabling frictionless financial services The demand for embedded finance is growing as businesses start to

recognise the benefits of incorporating financial products into their product offering. With companies such as Delivery Hero and UberEats paving the way, we’ll see accelerated growth come from other large scale platforms connecting consumers with merchants. It must be noted that any new technological developments will inevitably come with some roadblocks on the path to adoption. For example, tighter regulatory controls are likely to be put in place to limit the ease of access to specific products such as BNPL, which have been subject to scrutiny due to the debt that can be generated from them. However, regulatory changes within the market present an opportunity as much as a challenge. In the longer term, organisations will come to appreciate the ease of incorporating technology built by established regulated fintechs rather than attempting to develop their own in-house capabilities and dealing with the regulatory headaches that come with this. Embedded finance will soon allow every company to seamlessly offer fintech products for both consumers and companies to reap the benefits. Frictionless financial services are the future of payments. europeanbusinessmagazine.com 73

European Philanthropists Who Are Changing The World One Step At A Time

ver recent years, the world has started to seem like a scary place, with major catastrophes such as the pandemic and the war in Ukraine making everyone feel unsafe.Thankfully, there is good news among the bad. The pandemic and other events of recent years have bought out the best in many of us, and 2022 has even been dubbed ‘the year of philanthropy’ by some. While individuals and corporations put a lot of effort into supporting others, those who dedicate their lives to supporting the less fortunate, known as philanthropists, have bought significant, positive change to the lives of those who need it the most. These individuals include both wealthy business leaders who now donate money to good causes and those who have experienced hardships first-hand and want to make a difference. Philanthropists come from a variety of backgrounds, and while some are wellknown names, others are not often given the recognition they deserve for their hard work and commitment to improving the lives of others.

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That’s why we’ve put together this article to celebrate some of Europe’s top philanthropists who are working to make the world a better place.

Beny Steinmetz Israeli-born Beny Steinmetz is a renowned entrepreneur who has risen to exceptional success over the years. After becoming a successful billionaire, Steinmetz decided to give back to the world by launching the Beny & Agnes Steinmetz Foundation with his wife. Dedicated to supporting education, healthcare, and culture projects for young children in Israel, the foundation works hard to ensure that future generations get the support and care they need to flourish. As well as donating to good causes and managing volunteering projects, the foundation also provides the Beny Steinmetz Scholarship, which allows 125 students to attend the Netanya Academic College in Israel, one of the few colleges in the country to have been accredited as a higher

education institution by both the Israeli Government and the Council of Higher Education. These scholarships are helping to support young people in Israel and drive them towards future success.

Jack Monroe Having experienced extreme poverty herself as a young single mother, Jack Monroe has worked hard over recent years to support those in need throughout the UK and change the system for the better. She is vocal on issues such as LGBTQIA+ rights, support for those in poverty and changes to the political system that would make it easier for those on lower incomes to live fulfilled lives without running into debt. Alongside her work as an activist and supporter of those in need, Monroe is also a cookbook author who shares thrifty yet filling recipes. Most of the profits from her cookbook sales and journalistic work go to charity, with Monroe being a vocal supporter of food banks to support those who

don’t have the money to buy essential items. This work has made Monroe a key figure in the modern anti-poverty movement, and she has worked hard over the years to debunk common myths around poverty and expose flaws in the UK economy that mean that many hard-working individuals are forced to rely on charity to make ends meet.

Len Blavatnik British/ American entrepreneur Len Blavatnik is among the richest individuals in the world, and he’s been deeply committed to supporting others for many years. He launched the Blavatnik Family Foundation over a decade ago to support the arts and sciences, and over the years, the charitable organization has donated to hundreds of projects. As part of this work, Blavatnik made a £50 million donation to the Tate Modern gallery in London in 2011, which is the largest donation in the history of the gallery. As a result, the gallery named one of its new wings the Blavatnik Building in honor of his contribution and dedication to supporting the arts. Blavatnik also offers prestigious scholarships for the sciences with some of the world’s most revered education establishments, including Harvard University and Harvard Medical School. His work has helped to preserve many great items of literature and art, as well as furthering our understanding of the world.

Dame Stephanie Shirley Originally an unaccompanied child refugee from Germany, Stephanie Shirley went on to launch Freelance Programmers, which later became F International. The company aimed to eliminate the sexism Shirley, who was now married to a physicist and went by the name Steve to deter those who judged her based on her gender, had experienced in her previous roles at other companies. The business was a huge success, and through her vocal support of women in the workplace, Shirley went on to change the way the world viewed her gender.

She’s now a motivational speaker, business expert and philanthropist who created the Shirley Foundation, an organization that was dedicated to supporting those with autism and funding projects to help improve our awareness and understanding of the condition. She now manages Autistica, the UK’s national autism research charity, which she also founded.

Michael Ebenazer Kwadjo Omari Owuo Jr. (Stormzy) Known professionally as Stormzy, Michael Ebenazer Kwadjo Omari Owuo Jr. is a British rapper who is deeply committed to using his platform and money to support others. As a liberal individual who endorsed Jeremy Corbyn in 2016, the rapper has given a significant amount of money to charity over the years, aiming to support young black people and help them to achieve the success they deserve. He also runs a charity called #MERKY Foundation, which aims to support the black community and provide talented individuals with support and opportunities. It also amplifies the voices of those who are against racism and bigotry. Through Penguin Publishers, the rapper also has a book publishing imprint called #MERKY Books, which published his first book as well as a range of others from up and coming black writers.

Paris Lees Journalist, campaigner, activist, author and philanthropist Paris Lees has a varied career and is dedicated to supporting trans and LGBTQIA+ rights in the UK and around the world. Having experienced sex work, the UK’s prison system and the way trans people are treated throughout her life, Lees has dedicated her time and money to supporting causes that educate the populous on the struggles that many trans individuals go through and helping those in need to get their lives back on track. Over the years, Lees has worked with many charitable organizations and projects, including All About The Trans, a project that brings together media professionals with members of the trans community for meaningful and informative conversations. She’s also a vocal supporter of Stonewall, the pioneering LGBTQIA+ charity and works hard to raise awareness and funds for a variety of other causes, so that sex workers, members of the trans community and all those in need throughout the UK can get the help, support and understanding they deserve. Philanthropy is a unique approach to changing the world by giving time, energy and money to good causes. These successful European philanthropists are helping to make the world a better place in 2022 and beyond, helping us to achieve a better tomorrow for everyone. europeanbusinessmagazine.com 75

Real-time Data Platforms and ISO 20022 Drive Revenue Opportunities for Financial Institutions

Stuart Tarmy, Global Director, Financial Services Industry Solutions, Aerospike

The impact of ISO 20022 Let’s start with what’s known as ISO 20022. This is an international standard for all financial communications and 76 europeanbusinessmagazine.com

data exchanges between financial institutions and payment systems. In other words, it creates a common language. More than 70 countries currently use it and ISO 20022 can be used by anyone in the industry on any network. ISO 20022 has other benefits like providing a better payment experience. With the new standard, payments are faster, more reliable, more secure, and cost less due to better interoperability and the elimination of different standards from various countries and financial institutions. At the same time, institutions can also benefit from ISO 20022 because it dramatically improves the quality of data that is shared about customers. This enables businesses to understand customers better and provide improved experiences. While most financial institutions are in the early days of ISO 20022 migration, Citi is

permission for their data to be shared with third parties or even other banks that can use it to create new products and services to attract and retain customers. An example of this type of third-party aggregation service is Intuit’s Mint, a free budgeting app launched in 2006 that puts all a customer’s information in one place, such as loans, credit cards, and investments. Mint has been a thorn in the side of banks for years as it acts as the customer’s ‘window’ into their accounts. More banks are now seeking to become “aggregation hubs” – a sort of go-to portal for all their customers’ financial data, very similar to Mint. Still, it’s worth noting that sharing of this data may not take off overnight since some consumers are leery of providing private information because of cybercrime and privacy protection concerns. Their acceptance should improve as better communication with customers helps them understand that steps have been taken to make sure privacy and security rules are followed.

A real-time data platform is essential When discussing the changes coming to the payments industry and open banking, you need to include cross-data centre replication (XDR). It’s crucial because XDR provides greater security and flexibility when handling critical data, allowing it to be moved where and when it’s needed (such as retaining some data in a home country because of data and privacy regulations). It also means that there isn’t a single point of failure that could crash an entire system, and data can be accessed globally when needed. For XDR, it’s key to have a real-time data platform. Organizations need to make sure they have a data platform that can build globally distributed applications and access regional data easily and quickly. In addition, there needs to be ongoing compliance with local data regulations such as those being considered by the United Kingdom.

For example, now that the United Kingdom has left the European Union, it’s looking at how to also move away from European data protection regulations and forge its own path instead of complying solely with the General Data Protection Regulation (GDPR) as it agreed to do before Brexit. It’s expected that the UK’s aim will be to convince other countries that any data protection plan they devise can meet international standards and easily allow for the transfer of information across borders. If not, the UK risks being locked out of data transfers to other countries. There are numerous revenue opportunities for financial institutions because of open banking and ISO 20022, such as the chance to gain more valuable data, better understand customers and deliver improved experiences. But to be successful, it takes the right data platform and an understanding of local compliance demands. With all those pieces in place, financial institutions can realize exciting new opportunities. europeanbusinessmagazine.com 77

NFT’s- The New Age Buzzword That Has Gotten Everyone Talking

efore we start talking more about non-fungible tokens also known as NFTs, let us first understand, what are these fungible and non-fungible assets? Fungible means goods or assets that are not unique and can be exchanged / substituted for another identical asset of an equivalent value. Fungibility is not exactly same as a Barter. A barter is when goods and commodities can be exchanged for other products that can be incomparable in value. For example, a farmer may barter (exchange) units of rice for required quantities of apples from another farmer. But in fungibility the farmer will have to interchange with the same product that is rice, of same quality and same value. Fungibility is also not always equal to liquidity either. Liquidity is the ability to exchange an asset, such as a gold ring, directly for an agreedupon amount of money. Fungibility, on the other hand, indicates an ability to exchange an asset for an equivalent or similar asset. In the above case, what we call an asset can have both the qualities of fungibility and liquidity. Let’s take an example, if you loaned a $100 bill to a friend, now the friend can return the $100 in denominations of one $100 bill or two $50 or five $20 bills. The value you receive is the same, the form or type of asset is also identical Now, let us look at another concept called “arbitrage”. An Arbitrage is a strategy used to benefit from the price difference of the same commodity trading on different platforms or exchanges. This difference in pricing may occur due to inefficient pricing or based on demand and supply figures. For example, if the XYZ company May 2022 futures contract is trading at $500 per unit on exchange 1

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whereas it is trading at $550 per unit on exchange 2. Upon identifying this opportunity, the arbitrageur can buy the futures contract from exchange 1 and sell it as per the futures contract on exchange 2, thereby making a profit of $50 per unit. This would be an example of a fungible investment. In our day-to-day life we come cross many such fungibility examples. Now that we understand fungibility, it gets easier to understand non-fungible assets. These assets are unique and one of a kind and requires complex valuations based on their unique attributes and scarcity and cannot be exchanged for another item. For example, diamonds are non-fungible assets due to their uniqueness in size, color, shape, and quality. Hence it is not possible to substitute exact same unit for same price. Another example is baseball cards, each card is assigned a unique value based on it attributes such as edition number, design, player, and rarity. Each card will be valued differently and therefore cannot be exchanged directly with another baseball player card. That is a lot of information to process. But we still don’t get what are NFTs or Non-Fungible Tokens? After understanding the basic difference between fungible and non-fungible assets, let’s talk about NFTs. NFTs are basically digital tokens or assets that can be used to represent ownership and value of unique items. NFTs are not cryptocurrencies but they are related and are often used in conjunction with each other. NFTs are frequently bought and sold with cryptocurrencies. No two NFTs are exactly alike. The concept is based on blockchain technology. If you need to understand what is a blockchain technology, then perhaps some technology

journals may provide detailed information. But here is a simple explanation by Coinbase, “Cryptocurrencies like Bitcoin and Ethereum are powered by a technology called the blockchain. At its most basic, a blockchain is a list of transactions that anyone can view and verify. The Bitcoin blockchain, for example, contains a record of every time someone sent or received bitcoin. The list of transactions contained in the blockchain is fundamental for most cryptocurrencies because it enables secure payments to be made between people who don’t know each other without having to go through a third – party verifier like a bank”. In other terms, a blockchain is a digital ledger that stores any kind of data such as NFT ownerships,

cryptocurrencies etc. The stored data is public or decentralized but encrypted to ensure privacy of the user is not compromised and data cannot be alerted. A few examples of NFT’s are, artwork, music composition, gaming & family heirlooms. Artworks such as paintings are valuable and are one of a kind. But digital files can be created easily and duplicated multiple times. NFTs can avoid those issues, non-fungible tokens assist to protect the artist’s artwork by creating tokens or digital certificates of ownership that can be bought and sold. These tokens are unique and not divisible. An Artist can even claim royalties for the

future proceeds after his/her original artwork is sold. This process allows a profit percentage to be paid to the artwork’s creator every time the NFT is sold or changes ownership. NFT’s can have only one owner at a time. Say if you purchase an NFT of an artwork and the ownership of the unique token is transferred to your account. The token proves that the copy of digital file is original, and your private key is the proof of your ownership. The artist’s public key serves as a certificate of authenticity for that artwork, and he can be paid royalties each time the owner changes. This entire system benefits the creator, and it also provides authentic value to the buyer.

We are living in an ever evolving innovative, technological driven digital world. NFTs are providing a solution for digitalizing ownership and property and allowing proper storage of the precious and rare artefacts. However, NFTs are discretionary assets and are based on demand rather than fundamentals. The future of this entire market will depend on people’s interest and understanding of the blockchain technology. With the advent and acceptance of cryptocurrency, NFT’s have gained immense popularity. However, whether they evolve and become a part of our daily lives or not, I believe they are here to stay. europeanbusinessmagazine.com 79

Global Talent Shortage Threatens Growth of Fintech Sector

he global fintech sector has seen an exceptional +182% increase in tech job growth for the first quarter of 2022 – with the top 8 fintech ‘mega-hubs’ accounting for over 90% of all new fintech jobs advertised around the globe. The findings - from recruitment firm Robert Walters’ Global Fintech Talent Report – highlights how the fintech industry is one of the fastest growing sectors post-pandemic, outperforming the wider market by 3x. However according to recruiter Robert Walters, the sector will face major hurdles this year as an acute tech talent shortage around the globe threatens to halt the fintech growth machine.

growth will be dependent on their ability to recruit and retain the right tech talent. “The most advanced economies have long established that they cannot be ‘good at everything’ and instead have focussed their efforts in becoming specialists in a few core areas.

“For example – you have Germany for engineering, China for manufacturing, and the UK for banking. But no country quite has a dominance over technology and given the remote & mobile nature of the tech industry it seems that all major economies are competing for a slice of the fintech pie.

Top 8 Fintech ‘Mega-Hubs’ Ranked by Job Growth VC investment

No. Fintech Firms

Job Vacancy Growth

USA

$11bn

1,872

+223%

Japan

$3bn

116

+214%

Spain

$200m

463

+210%

$1bn

600

+167%

$700m

483

+163%

Australia

Toby Fowlston, CEO of Robert Walters comments:

Singapore UK

$4bn

1,565

+136%

“The forecast for organisations working in the global fintech market is a very positive one, however, their

China

$4bn

111

+132%

Netherlands

$1bn

114

+117%

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“Whilst the outcome of competition means heightened innovation and consumer choice, from a talent perspective this creates a challenge and as the adoption of fintech products continues to grow at an exceptional rate the concern is whether there is enough of the right tech talent to keep up with the growth.” The Robert Walters’ Global Fintech Talent Report considers various factors across geographies impacting talent attraction including skills in demand, retention levels, gender diversity, salary and VC investment.

UK vs Rest of the World • VC Funding: The UK is behind only the USA when it comes to fintech funding – attracting $4bn in the past year, on par with tech giants China and Japan. • Fintech Activity: With almost just as many active fintech firms as the USA – standing at over 1,500 – London continues to play an attractive home for fintech HQs, with surrounding areas such as Manchester and Birmingham proving to be attractive locations for satellite offices. • Talent Landscape: Vacancies have grown year-on-year within fintech (+136%), with the UK fintech hiring predominately at the senior-end of the market to accommodate the fast-scaling nature of the market. Toby adds: “Exit strategies for UK fintech’s are front of mind and so it is not uncommon for professionals to move on to another role within 1.5 years once they have seen through one major growth cycle or investment round.”

of all fintech companies in the country as cryptocurrencies transactions continue to grow (+51%). Toby comments: “Technology professionals is one of the most mobile talent communities in the world, and they naturally draw towards hubs or hives of activity where their skillset will continue to be in-demand and paid well. “Now that travel and entry restrictions around the globe are fast disappearing it won’t be surprising to see a significant migration of talent toward the 8 fintech hubs.”

Top Skills in Demand According to the report, the most in-demand roles within fintech across the globe is software engineering & Gender Split of Fintech talent – by country Female Male

Year-on-Year Job Growth in Fintech The USA has seen the biggest jump in new tech jobs within fintech – illustrating a +223% increase across the board, with the majority of this growth in New York (+246%) and San Francisco (+200%). Second in the running for job growth is Japan (+214%) – where blockchain technology represents almost a third

San Francisco

28%

72%

Singapore

26%

74%

New York

25%

75%

Spain

24%

76%

Netherlands

24%

76%

22%

78%

Japan

20%

80%

Australia

20%

80%

development - accounting for a third of all job roles advertised by fintech’s. With San Francisco (40%), New York (33%), and Singapore (33%) all hiring en-masse for developers, it is clear to see which countries are heading into greater levels of disruptive innovation where we will see the emergence of fintech-as-a-service, hybrid cloud platforms, embedded finance, as well as a hyper-focus on customer experience. Toby adds: “The increasing digitalisation of all sectors has meant that software development is in demand across almost any industry. With the technology behind fintech advancing at astronomical levels, the high level of specialism needed from developers is certainly being reflected in inflated salaries.”

Falling Behind on Diversity Currently less than a quarter of the global fintech talent is female – a stark contrast to the growing representation of female professionals in technology and financial services, which now stands at over a third. San Francisco fintech’s appear to have the most gender diverse teams – with 28% female representation. Toby adds: “It makes little sense why the representation of women within europeanbusinessmagazine.com 81

fintech is so low – in particular considering the difficulty in finding candidates. Fast-growing start-ups need to look beyond ‘quirky’ soft perks and consider adding more meaningful benefits that may attract female professionals.” Survey findings from Robert Walters has found that females are more likely to assess company & job security, diversity policies, and enhanced maternity packages before applying for a job.

Retention Rates Healthy employee retention rates are crucial to the financial performance of a company. Research indicates that the average cost of employee turnover is around £11,000 per person – and for specialist roles the 82 europeanbusinessmagazine.com

turnover cost can be significantly higher due to the amount of time and money that an organisation spends to train them. According to Robert Walters analysts, fintech firms should try to aim to keep employees for at least 18 months – 2 years, if they are to get maximum potential all whilst keeping a channel open for fresh people and ideas. Currently just New York, Netherlands and San Francisco are able to retain their employees on average for 18months+, with fintech start-ups in other countries failing to keep new hires engaged for long enough. Toby comments: “Excessive turnover drives up costs and diverts time and attention from the goals of a fast-growing start-up. For fintech’s that are more established, high turnover of staff can lead to a loss of

institutional knowledge and hinder efforts to foster a workplace culture. “Fortunately, most of the drivers behind employee turnover are preventable and fixable. Steps to reduce turnover include rethinking recruiting strategies, enhancing career advancement opportunities and providing more training and development offerings.” Average Tenure in Fintech New York

2.0 yrs

Netherlands

2.0 yrs

San Francisco

1.8 yrs

Spain

1.7 yrs

Japan

1.7 yrs

Australia

1.5 yrs

1.4 yrs

Singapore

1.3 yrs

China

0.8 yrs

Personio reaches milestone giving European SMEs more ways to build efficient people processes

ersonio, Europe’s leading HR software for small and medium-sized businesses, has announced that it has added its 100th software integration to the Personio Marketplace. Just one year after the Marketplace launch, 70% of Personio’s customers are using its apps and APIs to save thousands of hours of manual effort and improve critical people processes like payroll, data analysis, hiring, and employee satisfaction.

With an ever-growing range of integrations, manual and fragmented HR processes can be automated and streamlined through Personio’s Marketplace. For example, Personio’s integration with messaging app Slack ensures that an employee can save time and request an absence like a holiday request directly within Slack, boosting the employee experience. Once the absence is approved in Personio, the Slack status of that person will change automatically, making the wider team aware. This accelerates productivity and efficiency for HR teams and employees, and delivers against Personio’s vision for the future of HR technology, People Workflow Automation. Sarah Thomas, People Lead at Mindful Chef, a Personio customer, commented: “Personio offered a great level of automation and personalization which meant that we could design workflows that suited our unique processes.” Hugues Vincent, Head of Product Partnerships at Personio, said: “Europe’s SMEs are grappling with an ever-expanding range of software services that touch people data and processes, and this is hurting HR teams. We recently found that 55% of HR decision makers in Europe spend so much time on admin that it impacts their strategic work. By building an ecosystem that drives efficiency we are

helping HR teams to take back control and focus on the tasks that matter to their organisation, and reaching 100 integrations is an important milestone on this mission.” The integrations available on the Personio Marketplace cover all relevant HR processes, including areas such as collaboration, identity and access management, travel expenses, and time tracking. The Personio integrations ecosystem allows different tools to automatically communicate with each other, enabling HR teams to tackle people processes across departments. The automated data transfer between systems also ensures that all employee data is always up-to-date whilst reducing manual sources of error. Integrations that can be found on the Marketplace include: • Microsoft Teams and Slack - the most common tools used by Personio customers to make use of automatic notifications and updates, such as “out of office” status being pushed to these platforms once submitted centrally

• WorkMotion - used for compliantly hiring and onboarding employees across the globe • Zapier - which extends Personio’s ecosystem’s reach to thousands of SaaS tools • Other integrations such as Culture Amp and Lattice Nick Matthews, Vice President and General Manager EMEA at Culture Amp: ‘’Some of the most forward thinking organisations across Europe are harnessing the power of People Workflow Automation to drive their Employee Experience programmes through Culture Amp. HR professionals are able to focus on driving their people strategies with real time and accurate data flowing between Personio and Culture Amp.‘’ Thanks to the growing number of integrations, Personio customers now have over one hundred workflows available to help them create more efficient people processes. The Personio Marketplace is constantly expanding, with new software integrations and automated workflows added frequently. europeanbusinessmagazine.com 83

raditional payment methods will always have a role to play in how we conduct our financial lives – indeed, it is estimated that more than 63 million credit cards will be in use by the year 2025 in the UK. However, the financial market is evolving and digital payments are becoming more influential. The world of digital currencies has come a long way since the first model of a digital currency was conceived in the US during the 1980s. This saw a mass economic shift in payments, and since then we have witnessed the emergence of the first decentralised cryptocurrency in 2009, Bitcoin, and now many other forms of digital payment services such as Venmo and PayPal. Digital currencies are the next evolution of payments, but that needn’t be at the expense of cash. Instead, they will complement each other and work in tandem.By Anthony DiMarsico, Banxe CEO

The rise of cryptocurrencies Cryptocurrency sparked interest when the world witnessed the sudden rise, fall, and rise again of Bitcoin between 2017 and 2019. The world became intrigued by the events, and people educated themselves on cryptocurrency’s offerings. Now cryptocurrency’s influence is growing, and a new era of payments is being ushered in, an era where cash and crypto can both be used as payment methods. Digital currencies are rapidly picking up momentum, and are being used by both avid and amateur crypto buyers. In fact, according to Statista the global user base of cryptocurrencies increased by nearly 190% between 2018 and 2020, and is only predicted to accelerate further in 2022. Crypto adopters are attracted to digital currencies for several reasons: it 84 europeanbusinessmagazine.com

offers a high degree of privacy and accessibility, the simplicity of only needing access to the internet to buy cryptocurrencies, and an option for individuals to send and receive funds without providing sensitive information. And this growing attraction has led to some comparing being involved in crypto currently now, to those who were involved at the forefront of developing the internet, including Ric Edelman, founder of Edelman Financial Engines. With there now being around 17,887 different cryptocurrencies, the future of payments is rapidly and continuously evolving, and that evolution lies in cryptocurrencies becoming more mainstream. Imagine a world, where, in your wallet lies a debit card that allows you to pay for groceries, public transport, gifts, flights or anything else that forms part of everyday life, but not just in cash, but crypto too. A debit card that allows the option of which to pay with, as seamlessly as using a credit card currently is. This is the future of payments, where cash and crypto operate together to create a new era of financial transactions.

The downfalls of limited functionality Converting crypto to fiat currencies (cash) has remained a barrier to this becoming a reality for the masses. But with more than 17,000 cryptocurrency ATMs in operation in America alone, it is clear the appetite for using crypto in the same way as cash is there, be it to pay a bill, buy a meal or use public transport. The future of functionality lies in giving people the option to switch between crypto and cash seamlessly, regardless of geographical location or currency.

Currently, people need to create a different e-wallet for each cryptocurrency they wish to receive and store, which is a time-consuming and complicated process – not to mention that cashing out crypto often comes at a financial price. The result is a cryptocurrency experience that is not seamless or personalised. This, the old way of using crypto will continue to hold back the adoption rates of cryptocurrency worldwide.

Uniting the old with the new With cryptocurrencies in their early stages of development, there are

numerous promising advancements on the horizon for them to grow in value and trust, such as more exchangetraded funds (EFTs) expected to hit the market and boost cryptocurrencies, and the UK Government currently considering implementing a central bank digital currency (CBDC). The Financial Conduct Authority (FCA) is also consulting on new rules on how cryptocurrencies are promoted, indicating they could one day become a mainstream form of payment alongside standing traditional payments. Merging both will revolutionise how payments are made every day.

For cryptocurrencies to become widely adopted further education is still required. Many people are unsure of cryptocurrency, in part because it seems daunting and they don’t understand it, or understand how they can use it in everyday life. But, using a single access platform that bridges the gap between old and new payments brings an assortment of possibilities, and allows users to learn how to buy and trade in crypto, and unlock their financial potential. This is the future of payments; where cash and crypto operate together to create a new era of financial transactions. europeanbusinessmagazine.com 85

HOW EMPLOYERS CAN CHALLENGE THE TABOO OF TAKING A MENTAL HEALTH DAY By Julie Lock, Commercial Director at workforce management solutions experts Mitrefinch, an Advanced company.

inter comes with a raft of potential illness – cold, flu, and of course the ongoing Covid-19 pandemic. But it’s not just physical health which should be of concern – mental health affects 15% of us in the workplace. Staff wellbeing correlates with business wellbeing – people who are less stressed are more productive, and better at their job. A staggering 70 million working days are lost each year due to mental ill health, which costs employers in the UK alone upwards of £2.4 billion per year. Yet people are still reluctant to take days off, and mental health is still a taboo – a US study found 67% would feel judged if they took a mental health day. In 2020, only 11.6% of absence days were reported as being due to mental health, despite one in four of us experiencing mental ill health at some point, according to the well versed stats. Awareness and concern around health and wellbeing has increased over the last few years, but more needs to be done. In the recent Advanced 2021/22 Trends Survey and resulting report only 42% of UK employees said that they believed staff wellbeing to be a business priority over the next 12 months. This differed dramatically by demographics – only 17% of those aged 18 to 24 agreed that staff wellbeing was a priority, compared to 52% of employees aged between 45 and 54. Just over a quarter (28%) of

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managers said that treating employees as individuals is one of the business priorities for 2022, which would include taking into account their health and wellbeing. Similarly shocking statistics have been found in other surveys – one confidential report found that 56% of employers said they would not hire someone with depression, even if they were the best candidate for the job. Despite the Equality Act 2010 forbidding such discrimination, stigma around mental health is often very much in existence. Throughout the pandemic, a staggering 40% of the global workforce admitted to working while they were sick because they didn’t think their illness was enough to warrant time off. We need a culture where it is deemed not only acceptable, but at times necessary to take time off for mental health – or a ‘mental health day.’ If an individual is not operating at their best, they will not be able to perform as well or be as productive at work. We need to reach a point where a focus on mental health is not simply lip service, or mentioned passingly in visions, but embedded in everyday practices. Of course, organisations must also continue to meet business objectives and to grow in line with their plans. They need to ensure work is being done, productivity levels remain high, and people keep coming to their desk. Managing absence effectively is essential. Good absence management isn’t just about tracking and monitoring, but creating an open conversation around absence and illness. Regular contact is

paramount to all employee relationships, and businesses should build in meetings that encompass all aspects of the job – how targets are being met, upcoming priorities, schedules, as well as ‘checking in’ to see how people are feeling. Alongside formal channels, more informal opportunities are open for business leaders to build a culture where wellbeing is deemed a priority. There are various ways to do this; some organisations build ‘wellbeing hours’ into their week, or invest in Mental Health First Aid training, so people know that there is always someone to speak to. Short term absence – whilst frustrating and able to cause pressure points when deadlines are looming – is rarely severely problematic. But long term and repeated absences are a different story. Good systems enable HR teams and managers to spot patterns that might suggest additional support is needed, so that they can address potential issues early on. Effective absence management not only supports people with health issues to stay in or return to work, but is a key part of creating an environment where they can do their best work: adding enormous value to the organisation. Absence management is not just about knowing when employees are not at their desk or what time they’re clocking on. It is about creating a culture where people can take time off when they need to, and arrange and communicate that with minimal impact on business workflows and results. By offering support and anticipating any potential needs, individuals will feel encouraged and able to perform at their best, ultimately improving business outcomes. Sometimes having a ‘mental health day’ is exactly what is needed, and will benefit both employee and employer in the long term. Only by having an open and honest conversation utilising all the available tools and channels that a business has available can employers create a culture and system where they enable employees to do what is right for them, right for their mental health – and right for business. europeanbusinessmagazine.com 87

COVID, CLIMATE CHANGE,

UKRAINE- THREE WAYS BUSINESSES CAN ADAPT THEIR MODELS TO WORKING IN AN AGE OF CRISES

t’s been a tough few years for people who own or manage a business. Lockdowns shut down whole industrial sectors worldwide, turning profitable businesses into loss-making ones, while a lot of smaller businesses went under. Many companies will now be hoping for a return to some type of normality after COVID. However, there are strong signals that a resumption of how things were isn’t on the cards any time soon. The world appears to have

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entered into an age of accelerating grand crises. Even before COVID, the climate crisis was increasingly disrupting the world through extreme weather events. Then, just as some countries had declared their war against COVID to be won, the invasion of Ukraine has not only reshuffled global geopolitics, but also led to a dramatic increase in energy and food prices, having big knock-on effects on a whole host of other sectors.

One day there may be a time after COVID, after the Ukraine war, and even after the climate crisis. But there’s unlikely to be a point of general stability any time soon. Humanity is pushing environmental limits to breaking point, risking further crises – whether in terms of disease, conflict or natural disasters Businesses therefore need to shift how they operate. This means responding to current crises, being better prepared for future crises, and

addressing their own role in generating these crises in the first place. With that in mind, here are three types of business models companies should start adopting now.

Respond to crises What is needed are reactive business models that can respond to crises at hand. Such adaptability will naturally have a survival element, in which organisations do whatever is necessary to mitigate negative effects on themselves. This means aligning management practices with the “new normal” after the crisis, instead of holding on to the old normal from before. Where appropriate, such models should also have a crisis-mitigation element, addressing the wider negative effects of the crisis at hand where they can. It appears fossil fuel behemoths such as Shell and BP might be starting to do just that. Having long been under attack for knowingly contributing to the climate crisis and counteracting shifts to more sustainable energy systems, they appear to now be adapting to crisis forces. These forces include, most notably, the global trend towards phasing out fossil-fuel vehicles. These companies have therefore begun to transform key aspects of their business. A first move, for example, seems to be repurposing their petrol station operations into an electric vehicle charging infrastructure. As they ride the waves of the climate crisis, expect to see them make many disruptive greening changes like this.

Be ready for future difficulty Businesses also need to move from stability-based business models to accepting that the business reality is now one characterised by volatility, uncertainty, complexity and ambiguity. Value propositions encompass the benefits a business offers, for example to its customers, employees and the community. Building business models for this new world means establishing value propositions fit for the long run, that can morph into all kinds of crisis

scenarios. It also means being agile and quick to adjust. One form this could take, for instance, is for a business to offer products and services that address timeless and fundamental needs like health, food or security, rather than short-lived superficial wants like those related to fast fashion or the latest technological fads. A good example of such a business model is that of Chinese electronic goods corporation Haier. The company is explicitly tuned in to an ever-changing world, aiming to deliver “products that respond to the constantly changing needs of the modern home”. For instance, Haier responded to Asia’s air pollution crisis by developing an integrated air conditioner and air purifier. Alongside this, Haier employs its unique “RenDanHeYi” (or 人单合一, which freely translates to “one single person in unity”) way of working. Haier is essentially a collective of smaller, semi-autonomous companies, in this way giving both individual freedom and collective responsibility to self-organised micro-entrepreneurs. This makes Haier a fluid, agile and resilient organisation. By operating as a network of micro-enterprises,

each of which works closely with customers to respond to their changing needs and situations, the business can evolve more easily as each new crisis plays out. Because of these features in their business model, Haier has done exceptionally well during and after the COVID crisis.

Help prevent crises of tomorrow Finally, businesses can better set themselves up for the future by adopting models that specifically mitigate or even prevent future crises. While COVID, the Ukraine crisis and climate change are still ongoing problems, many business models have been geared towards keeping other things from becoming the next grand crisis. For instance, some companies are adopting business models that promote reconciliation and peace, with view to preventing disruptive future armed conflict. Examples range from former Colombian guerrilla group members building adventure travel businesses that show the previously hidden side of the conflict, to coffee cooperatives in Rwanda designed for Hutus and Tutsis to reconcile through collaboration. europeanbusinessmagazine.com 89

Russia has put the rouble on a gold standard – but can it last?

he Bank of Russia, the country’s central bank, has surprisingly announced a fixed price for buying gold with roubles. With a price of RUB5,000 (£45.12) for a gram of gold, to my knowledge it’s the first time that a nation’s currency has been expressed in “gold parity” since Switzerland decided to stop doing so in 1999. Enacting gold parity was common practice by the world’s major powers for facilitating international trade payments in the era of the gold standard in the 19th and early 20th centuries. The same was true in a slightly different way during the Bretton Woods era from 1944 until 1971, which was when US President Nixon decided to end the system by removing the link between gold and the US dollar. Putin’s new arrangement is envisaged, initially, to hold from March 28 to June 30. It is the latest in a series of rouble-related moves by the Russians, starting with the announcement on March 23 that they would only accept roubles for European gas instead of euros and US dollars. I predicted that Russia would at least extend this policy to oil, but it has gone further and signalled an intention to make it apply to all the commodities it exports (others include wheat, nickel, aluminium, enriched uranium and neon). The main goal of these moves is to try to ensure the credibility of the rouble by making it more desirable in the forex market, though it also fits into longstanding attempts by Russia and China to weaken the US dollar’s dominance as global reserve currency (meaning it’s the currency in which most international goods are priced and which most central banks hold in their foreign reserves). As one can see in the chart below, the rouble collapsed in late February and early March when western sanctions were imposed in response to Russia’s invasion of Ukraine (the collapse looks like a rise in the chart because it’s showing the number of roubles to the US dollar rather than the other way around).

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Rouble/USD chart After the big drop, the rouble recovered somewhat, which is typical in such situations (known in the literature as “exchange-rate overshooting”). However, the currency strengthened further after the roubles-for-gas announcement (no matter how serious or implementable the plan actually is – so far, there has been resistance to Putin’s new rules). On the back of the gold announcement, the currency has continued to strengthen to about RUB83 to the dollar. As precious metals analyst Ronan Manly has said, this makes sense if you reflect that the market price of a gram of gold is currently about US$62 (£47.20). That’s fairly close to Putin’s announcement that 1 gram of gold equals RUB5,000, which effectively creates a gold-based exchange rate of RUB81 to US$1.

Previous gold-based systems To give a sense of the similarities with the gold standard and the Bretton Woods system, let me draw a historical parallel. The UK’s Coinage Act of 1816 fixed the value of the pound sterling to 113 grains of pure gold, while the US Gold Standard Act of 1900 determined that the dollar should

maintain a value of 23.22 grains of pure gold. Taken together, the two acts implied an official gold parity exchange rate of £1 = US$4.87. It was similar during the post-war Bretton Woods era: 1 ounce of gold was said to be worth US$35, and all other currencies were fixed to and convertible into the US dollar. Gold was at the centre of the system as a way of making money credible.

No more free-floating rouble. Cloudy Design Of course, attaching the rouble to a gold standard comes with certain “rules of the game” that Russia will have to abide by. It should be willing to exchange gold for roubles with anyone who wants to do so. This was what the US did during the Bretton Woods era, and it led to the system’s demise: with US expenditure rising to wage the Vietnam war, dollar holders became increasingly nervous about the dollar’s value and sought to exchange it for gold. Nixon’s unilateral decision to end convertibility was for fear that the US would run out of gold, which would have destroyed the credibility of the dollar. Since that decision, the world has moved to a system of floating

exchange rates and the price of gold has steadily risen as world currencies have become weaker in relation to it. The system has effectively been supported by a deal that the Americans struck in the early 1970s to buy oil from the Saudis and give them military support in exchange for the Saudis using the dollars to buy US government bonds.

Gold price (US$/ounce) The problem for Russia is that if it is willing to exchange roubles for gold, it could soon end up in a similar

situation to the US circa 1971. Wars are an abnormal state of affairs which come with huge uncertainty: no reliable forecasts are possible, and markets are liable to overreact to new developments – particularly in the short term. If confidence in the rouble falls again, many investors might decide to withdraw gold from the central bank, which could be extremely destabilising for Moscow. The viability of Russia maintaining a fixed rate of roubles for gold is closely related to what happens to demand for Russian energy. If the west can only slowly substitute away from its

dependence on Russia’s oil and gas, then demand for roubles will help to keep the currency propped up (especially if the west does end up paying in roubles). But if politicians listen to economists and immediately stop importing Russian gas, oil and other commodities, the rouble could fall dramatically – along with the whole Russian economy. As much as this would cause a further spike in prices and pain all round, it may be the most efficient and perhaps even safest way to induce Russia to stop the war.

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Can Europe Save Europe’s Struggling Semiconductor Industry?

ntel’s proposed US$30 billion (£23 billion) investment in semiconductor manufacturing capacity across Europe has the potential to significantly boost the continent’s struggling chip industry. The US giant is poised to invest an initial US$17 billion to build a cutting-edge semiconductor factory (known as a fab) in Germany, along with associated R&D facilities to develop new generations of chips in France, Ireland and Poland. It is also in negotiations with the Italian government to develop a manufacturing facility in that country. If such proposals come to fruition, the overall investment could

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top US$80 billion and create over 3,000 high-tech jobs and many more across the digital supply chain. Intel, the relevant national governments and the European Commission argue that these investments will transform Europe’s semiconductor supply chain and make it more competitive. The role of national governments and the European Commission is important to note as Intel’s investment is likely to be underpinned by billions of euros worth of public subsidies. Chip production has been high on Europe’s agenda as many high-technology companies have been struggling to source chips because the

COVID-19 pandemic has disrupted worldwide supplies. Europe’s automotive industry has been particularly hindered as a result. Russia’s invasion of Ukraine has accentuated the problem because the industry relies on both nations for neon, which is vital for the lasers used to cut state-ofthe-art chips. Intel’s investment in new capacity is not going to address these current issues, given that production is not expected to begin until 2027. But it could eventually ease Europe’s dependency on sourcing chips from afar and revitalise the continent’s increasingly uncompetitive operations.

The world market The semiconductor industry is global in scope, with nearly two-thirds of chips manufactured in Asia – particularly South Korea, Taiwan, Japan and China. This dominance has come at the expense of European producers, which now account for only around 8% of the world market, compared to 44% in 1990. This is largely the result of under-investment. Principally as a result of heightened geopolitical instability, the EU has recently become concerned about “digital sovereignty”. Its recent European Chips Act set out a range of measures to boost European production by pooling different countries’ resources to complement their individual research strengths. It also supports developing new production facilities with a view to increase Europe’s share of the global market to 20% by 2030. Boston Consulting/Semiconductor Industry Association Intel’s announced investment is the most tangible outcome to date and is certainly welcome, though it is unlikely to fully rekindle the European industry alone. The industry tends to be populated by SMEs (smaller businesses) and clustered in a small number of locations, including Leuven

(Belgium), Dresden (Germany), Eindhoven (Netherlands), Grenoble (France) and Cardiff (UK). Our recent research into these clusters suggests that many companies have been starved of investment from either private or public sources to expand and innovate. This is compounded by a lack of demand from European technology companies. For example, with the demise of Nokia, Europe no longer has a giant company such as Apple or Samsung that demands the most sophisticated chips. For many of Europe’s semiconductor companies, which are engaged in chip design rather than production, these issues are stifling the growth of the industry more than a lack of manufacturing capacity.

What needs to happen To address this, the Intel intervention needs to form part of a coherent and integrated strategy to boost the competitiveness and innovation capacity of the European sector as a whole. Like other deep tech sectors, the chip industry is increasingly an entrepreneurial one. New and innovative ideas are sparked by start-up companies that are able to commercialise these ideas and create value. There is a very real need to provide business and infrastructure support, as well as skills development and commercialisation routes to allow startups to enter the industry and current incumbents to upgrade and scale up. Chips off the old bloc. gopixa Innovation is clearly the name of the game when it comes to competitiveness in chip-making. To give the European Commission its due, it has provided significant funding for semiconductor research over a number of years through the Framework and Horizon programmes. However, successful commercialisable innovations stemming from this research have been relatively sparse. Therefore, alongside supporting large, foreign direct investment projects there must be an enhanced focus on improving the entrepreneurial and innovative capabilities and capacity across Europe’s semiconductor industry. Without this, there is a real danger that due to a lack of significant viable demand in future, we will be reading news of the mothballing of the proposed new manufacturing facilities. europeanbusinessmagazine.com 93

YOUR BUSINESS IN POLAND? Why is this a good idea for 2022?

ccording to the TMF group ‘Global Business complex Index 2021’, Poland is the second country in Europe and 10th in the world with the most complex business regulations but it remains an attractive market for running a business, especially for foreign investors. These are the facts. According to data from the Polish Register of companies (Register of Entrepreneurs of the National Court Register) only in 2021, 10.494 companies with foreign capital were established in Poland. Entrepreneurs come from 99 countries, including 347 from Germany, 174 from China, 149 from the UK, and 146 from the Netherlands.

Why Poland? Poland has a very good human capital. In the Pomeranian Voivodeship, the sixth-largest in terms of population, there are 24 universities with 81,000 students. Approximately 20 thousand of these young people will become graduates. Every fifth student studies a major related to administration, business, or law, and every sixth studies engineering related to technology, IT, and industry, including shipbuilding and construction. The leaders in education are the University of Gdańsk, Gdańsk University of Technology, and Gdynia Maritime University, which together educate students in 24 fields of study. Poland is also the main beneficiary of the economic migration of qualified workers from abroad, especially from Ukraine. Educated employees, with relatively low labor costs as for European conditions, determine that despite the objectively complicated legal system, Poland remains an attractive market for foreign investors.

What business in Poland? Foreign investors as a venture capital (VC) or private equity (PE), running 94 europeanbusinessmagazine.com

companies in Poland, operate mainly in such industries as trade (21%), construction (19%) or transport (13%), but they are also companies operating in the field of IT or back-office services. In the Pomeranian Voivodeship, due to its location on the Baltic Sea, in the vicinity of shipyards, the Port of Gdynia and Gdańsk, and specialized universities, investments of international companies attract particular attention. These are global companies, basing their activities on the shipbuilding, transport, and forwarding industries. Nevertheless, there are also IT (programming) companies as well as back office and IT departments of global corporations. It should be emphasized that, in general, venture capital invests mainly in new companies or stats with high growth potential. However, private equity in already existing companies requires reorganization. It can be considered that venture capital investments are investments in own electricity, while private equity investments are for investment purposes.

What are the forms of investment? According to data for 2020 from the Central Statistical Office, there are 23,203 companies with foreign capital in Poland. 92.8% of these companies operate as a limited liability companies, and the other forms are joint-stock companies (3.3%), limited partnerships (2.6%), branches of entrepreneurs (0.8%), and limited jointstock partnerships (0.2%), and others (0.3%). However, in 2021, according to data from the Polish register of companies (Register of Entrepreneurs of the National Court Register), out of 10,494 newly established companies with foreign capital in Poland, 96% of these businesses operate in the form of a limited liability company, 2.23% in the form of a branch of a foreign

entrepreneur, others in the form of such companies as partnerships (general partnership, partnership, limited partnership, limited joint-stock partnership) and a capital company - similar to a limited liability company (sp. z o.o.) - joint-stock company (S.A.). The statistics do not include running a business in a new form of a capital company - a simple joint-stock company (PSA), the regulations of which were drafted in 2021.

Why does business choose capital companies? In the Polish corporate law system (commercial companies law), companies are divided into two main types: partnerships and capital companies. Partnerships are connected personally by natural persons or legal persons (e.g. other companies), while capital companies combine partners by capital. The capital companies are limited liability companies, joint-stock companies, and simple joint-stock companies.

performed in the presence of a notary. Moreover, in Poland, traditional applications - in hard copies - are no longer accepted into the register. Similarly, computerization in other areas, such as taxes or social and health insurance, is also being developed and most matters are handled electronically.

Summary:

Limited liability company A company may be formed by one or more persons; only 5,000 PLN of capital is needed. The company is established by drawing up and signing an agreement in the form of a notarial deed and registered in the National Court Register. The partners of this company are not liable for the obligations of the company. The only thing they can lose is the capital they contribute. The drawback of this form of activity is the need for the partners to pay income tax and tax on profits paid out from the company (dividends).

Joint-stock company A joint-stock company is dedicated to large companies that wish to enter the stock market. People setting up a company must have a capital of PLN 100,000. To establish a company, it is necessary to draw up and sign a contract in the form of a notarial deed, appoint a management board and

supervisory board, make a contribution and register the company in the National Court Register.

Simple joint-stock company A new company that facilitates the cooperation of people with knowhow and investors with capital. The company can be set up online in 24 hours in the S24 system. The founders need a capital of PLN 1. Shares can be acquired for cash, work, and provision of services, which was not possible in the case of a limited liability company and joint-stock company. It is worth noting that from 2021 in Poland, in addition to the S24 system, there is also the PRS portal - Court Registers Portal. As a result, it is not only possible to set up (register in the company register) an online company using the S24 IT system or submit the annual financial report of a company online, but also to register or change entries of companies established in a traditional way - when legal actions were

Contrary to appearances, running a company in Poland does not have to be so complicated! Thanks to computerization, many administrative duties are easier and more transparent, and formalities are easier to overcome. Of course, appropriate legal assistance is needed to determine the appropriate legal form, register a company and organize a company in Poland, but more and more foreign companies decide to invest in our country. Our law firm - ADVISER Armknecht & Partners attorneys-at-law in Gdynia as well as many others specializing in comprehensive services for companies (business clients) provide services of this type, it is very often that our actions go beyond traditional corporate matters and constitute the beginning of many years of cooperation. Among our clients whom we helped to start their business in Poland, many companies still run it today. Some of these companies have already ceased operations (company liquidation). They did it after a decade and it resulted from a global change in the strategy of these companies.

Compiled by: Bartosz Armknecht - CEO, ADVISER Armknecht & Partners attorneys-atlaw - law firm from Gdynia (Poland, Pomerania) since 1989, business law expert in corporate law & company law. ADVISER Armknecht & Partners attorneys-at-law 15 Generała J. Bema Street, suite 3, Gdynia, 81386 – POLAND phone: +48 58 661 82 23 Tax ID No (NIP-UE): PL 5862295183 e-mail: office@adviser.law www.adviser.law europeanbusinessmagazine.com 95

Four problems that private aviation needs to fix now Private aviation needs a digital revolution if operators and brokers want to respond to rising demand. Here’s what needs to change, and how.

lack of digital innovation is holding back the private aviation industry. As demand for private flights increases, the industry must revolutionise — and the answer to its most pressing challenges is digital. Much like other sectors, private aviation has taken steps to digitise in recent years, but it hasn’t been enough to shake up the industry and deliver what brokers and operators need to thrive in an evolving digital world. ‘Empty legs’ remain a lost opportunity, while the flight request and bidding processes remain slow, despite the introduction of online portals to request and bid for flights. If anything,

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the early stages of private aviation’s ‘online revolution’ has created more problems than it solves (such as the price transparency challenge that surrounds many online bids for charters). So how can the industry further embrace and utilise online processes to overcome its most urgent challenges – and enjoy the digital revolution that this growing industry deserves?

Slow, manual flight request processes Online platforms haven’t lived up to expectations, particularly when it comes to speed. Up until now, brokers

have faced a choice between the traditional method of manually calling their network of trusted operators or requesting flights on a static online bidding platform – which often results in brokers resorting to manual calling anyway, due to a lack of real-time information and bidding processes. A new platform that is addressing this is AeroBid, which by contrast allows operators to bid in real time, anonymously, on detailed flight requests. The broker then chooses the most valuable quotations for their client.

Operators overwhelmed with requests As demand increases, operators are finding themselves inundated with flight requests, many of which aren’t relevant or useful to them. Current digital platforms that distribute requests from brokers can result in thousands of flight requests in a single day being received by operators, generating masses of admin that makes it harder and more time-consuming to filter out the best opportunities. Yet data should be simplifying workflow for operators, not complicating it, allowing operators to identify the most

relevant and lucrative flight requests based on specific information. AeroBid’s data-driven approach enables operators to take control of incoming requests: they can view full flight details, search by key information like location or aircraft, and choose which requests to bid for. They can also choose to receive notifications when requests are posted with key criteria, automating what can otherwise be a laborious selection process.

Sustainability and the ‘empty leg’ issue ‘Empty legs’ are a continual issue in private aviation, and it’s anticipated that a majority of private aircraft journeys don’t carry any passengers. It’s a wasted opportunity for operators, who could monetise ‘empty legs’ at a fraction of the cost of their primary charters, benefiting brokers (and their clients). If the industry could regularly harness even a percentage of ‘empty legs’, it could, over time, create more affordable private charter fees, as operators utilise both their outbound and return journeys. Most importantly, it could be a vital step towards greater sustainability. If a plane that would be empty could carry passengers who would otherwise have booked another flight, less return flights would be needed to accommodate a greater number of passengers. Zaher Deir, CEO and Founder of AeroBid, comments: “I would say that around 30 -50% of the private flights which operate now are empty, either because the aircraft is going to pick up passengers or is returning to its home base after dropping passengers off. No one is making great use of those empty legs. It would be impossible to fill 100% of those flights, but with digital platforms and data, as we use at AeroBid, it’s certainly possible to use 80% to 85% of them, and that would represent an enormous leap in efficiency and sustainability.”

Supply and demand Increasing demand for private air travel has led to a boom in private jet ownership, which – combined with supply chain issues in aircraft production – has

decreased the availability of aircraft. With private flight requests rising, and aircraft supply stagnating, operators and brokers face the reality of demand that they can’t fulfil. Data can ease this pressure on the industry, not by providing more planes or flights, but by maximising the efficiency of existing inventory. The empty leg problem above is one manifestation of the issue — when demand outstrips supply, empty flights are a squandered opportunity. Online platforms need to

align the supply and demand sides of private aviation more intelligently, so that operators don’t miss the opportunities to fulfil demand, and more smoothly, so that the bidding process is quicker and more accurate, and more flights get booked and fulfilled in a shorter space of time. To find out more about how AeroBid are revolutionising private aviation through digital, tackling all four of these industry problems, you can visit their website or call +441865819991. europeanbusinessmagazine.com 97

STABLECOINS. WHAT ARE THEY?

By Komal Motwani CFP®

oday’s news channels are flooded with the news of how stable coins are behaving “not so stable”. So, what are these stablecoins? How did we even come up with this terminology? In an ever changing and evolving economic situation, we are hearing a lot of new terms and concepts. Stablecoin is one such term. Ever since Crypto currency became more and more mainstream, it has given rise to newer concepts and needs. A stablecoin is a cryptocurrency that derives its value from other underlying assets and is pegged to such an asset. For example, government currencies (legal tenders) or gold can be counted as an asset. The big difference between a stablecoin and bitcoin is that stablecoins are less volatile than bitcoins due to the characteristics of mimicking it’s value with an underline asset.

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For example, one of the leading stablecoin, Tether (USDT) generally maintains a 1 to 1 ratio with the US dollar. On the other hand, Bitcoin is more volatile, and their market values keeps on fluctuating. Bitcoin or BTC was trading around $4,000 in March of 2020. In October 2021 it was trading around $62,000. Today it is trading around $30,000. Factors impacting its notorious price volatility are many and varied. Supply & demand (the maximum total supply of Bitcoin is 21 million BTC), government policy changes, mining difficulties and investment acceptance and attractiveness are just some of the factors. Stablecoins do not have a fixed supply limit and are backed with collateral to safeguard investors from price fluctuations to some extent. They are of a few different types, Fiat – Collateralized, Centralized, Decentralized, Crypto - Collateralized and Algorithmic based stablecoins.

Let us get into a little more detail about some of these coins. Just as the name suggests, Fiat-Collateralized are backed by the country’s currency. They are not issued by the government but rather a company issues these coins by depositing equal amount of fiat in its reserve as collateral. The most popular stablecoin in this category are Tether (USDT), USD coin (USDC). These are also considered as centralized stablecoins, wherein they are generally connected with a thirdparty custodian, achieving 1:1 backing of the underlying asset. What this means is that users can mint the coins by depositing equivalent fiat to the custodian and for redeeming coins for cash, the entity that manages the stablecoin, will withdraw from the cash reserves and send it to the person’s bank account. The equivalent coins are then burned or removed from the system. The decentralized stablecoins that have peer to peer connection without

the custodian. The funds are visible and traded on public blockchain technology. These are also Crypto – Collateralized and Algorithmic stablecoins. Crypto – Collateralized are backed by Cryptos. Cryptocurrencies are volatile hence they are over collateralized to accommodate the higher volatility. For example, DAI stablecoin is pegged to US dollar but runs on Ethereum blockchain and backed by cryptocurrencies ($1 stablecoin can be backed by $2 cryptocurrency due to the price fluctuations). Now, Algorithmic stablecoins are not backed by any assets. Rather, they run on complex computer algorithm and smart contracts to manage and stabilize the price. The software program adjusts the supply of the stablecoins as the demand for it fluctuates. The strategy allows the peg to remain intact, for example if the demand is high and the price of stablecoin increases (above $1) the algorithm will mint coins and increase the supply to bring the price back to $1.

Komal Motwani, CFP ® is a senior investment analyst at Yanni & Associates Investment Advisors, LLC., a Pennsylvania-based registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. TerraUSD an algorithmic based stablecoin on May 9, 2022, made the news as it plummeted to 50-60 cents, the token fell from its 1 to 1 peg to the US dollar. The TerraUSD collapse created a mayhem in the crypto markets and across the board there were selloffs. Most of the other algorithmic stablecoins were also below their 1:1

ratio. Luna coin plunged 99%. Luna & TerraUSD tokens work on blockchain based technology made by Terra Labs. Regulators globally are trying to establish some framework to regularized and scrutinize the crypto markets to avoid situations like TerraUSD mayhem. “Treasury Secretary Janet Yellen said the de-pegging of TerraUSD shows the urgency to have a regulatory framework on stablecoins”. While the future is unknown, stablecoins that are backed by legal tender or fiat currency can possibly offer to bring some stability to the crypto markets. However, they will continue to receive pushbacks from the governments for the near future. While all of the above information sounds very convoluted, it is the future of currency. These new-age wealth avenues are very much here to stay. Hopefully governments and regulatory bodies across the globe team up and create solid frameworks around them to decrease their volatility.

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