European business magazine autumn 2023

EUROPEAN BUSINESS europeanbusinessmagazine.com

AUTUMN EDITION | 2023

MAGAZINE THE MOROCCAN FACTOR The Kingdom is the Global South’s New Capital during the IMF World Bank Assemblies

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Table of Contents 08 10 12 16 18 20 22 24 26 34 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 71 74 76 78 80 82 84 86 88 90 92

The Rise of China’s Digital Innovation and Its Lessons for UK Businesses Preserving Privacy When It Comes To Trading Personal Data News Just In Case Or Just In Time? The Case For Reimagining The Supply Chain Model Why Public Organisations Need To Start Gearing Up For Cities 4.0 Is Copper Set For Long-Term Gains?

It Investments Cios Should Consider Before Recession Strikes How Digital Signatures And Blockchain Technology Can Help To Mitigate Fraud Risks The Moroccan Resilience: Amidst Quakes and Economic Shakes Morocco’s Economic Flourish and its Trade Ties with Europe How Cloud-Powered Ai Could Revolutionise Digital Fraud Ignore The Hype And Focus On The Real Benefits That Ai In Payments Can Bring What Can Businesses Learn About The Uk’s Digital Future From The Financial Services Sector?

Companies To Invest More In Freelancers And Tech Skills But Not In Women In Top Consulting Jobs What It Means To Be An Ethical Hacker With Glenn Wilkinson The Net Zero Transformation Of Energy-Thirsty Data Centers Safely Harnessing Its Potential How Ai Is Disrupting The Workplace Ignore The Hype And Focus On The Real Benefits That Ai In Payments Can Bring Geo-Political Investing, Intermediaries And Surging Forward In 2023 The Human Issue With Risk Management Reinforcing Trusted Advisor Status Through Technology Innovation Shrinkflation: What To Know About Changing Your Packaging New Study Reveals The Most Popular Stock Trading Podcasts Matthieu Aubry, Co-Founder Of Data Analytics Company Matomo The Great Disconnect: Why Uk Businesses Are Out Of Touch With Employee Stress Pendulum Co-Founder Says Wef Can’t Stop Crypto Innovation And Adoption Satellite And Ground Segment Technology The Key To Military Applications Interview Koen Willems Vp, Eu Programs & Government Relations, St Engineering Idirect Supply Chain Evolution: How Can The Consumer Electronics Industry Use Data To Improve Sustainability?

What can be done?

Taking the glare out of the Corporate Sustainability Due Diligence Directive (CSDDD) The Key To A Flourishing Digital Transformation Journey The Latest Innovations in Digital Fintech New report finds more than two-thirds of business leaders think of digital as a continuous evolution, not a transformation New Initiative to Strengthen Cross-Border Investment in the Digital Economy Private Sector Sends Powerful Market Signal to Commercialize Zero-Carbon Tech, as Key Coalition Tops 50 Members

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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.

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The Rise of China’s Digital Innovation and Its Lessons for UK Businesses The Ever-Evolving Chinese Digital Landscape

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hina has become a global leader in digital innovation, reshaping consumer behaviours and revolutionising industries. With technology giants like Tencent, Huawei, JD.com, China Mobile, and Alibaba at the forefront, China’s digital landscape has experienced unprecedented growth and innovation.

China stands as the largest eCommerce market globally, accounting for nearly 50 percent of the world’s online shopping transactions. In 2020, China recorded over 710 million digital buyers and a staggering $2.8 trillion in eCommerce transactions, surpassing the combined totals of the United States, United Kingdom, Japan, Germany, and France. It is projected that transactions will reach $3.56 trillion by 2024, highlighting the immense potential and opportunity in the Chinese market.

In this article, we delve into the insights of Arnold Ma, the CEO and founder of Qumin, a renowned Chinese digital media thought leader. Ma offers expert analysis on the future of Chinese digital innovation and its implications for UK businesses. From social commerce to AI-driven marketing, Ma explores the dynamic world of Chinese digital innovation, providing valuable insights to navigate this competitive market.

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China’s digital landscape is a constantly evolving ecosystem that demands continuous adaptation.

With over 1 billion internet users and a mobile phone penetration rate above 70% of the population, China’s internet access and mobile usage are staggering. By 2027, it is projected that over 1.2 billion people in China will access the internet through their mobile phones. On average, each internet user in China has approximately 7.3 social media accounts, reflecting the scale and influence of the Chinese digital landscape. The mobile app market in China still has ample room for growth, given the vast user base.

The Future of eCommerce: The Rise of Social Commerce China has witnessed the blurring of boundaries between social media and eCommerce, giving rise to the phenomenon of social commerce. In 2021, the social commerce sector in China reached a market size of approximately 2.5 trillion yuan (£2.7 trillion), marking a 10 percent increase from the previous year. This trend underscores the massive scale and impact of social commerce in China.

Tencent, the technology conglomerate behind the popular platform WeChat, is a notable player in this space. With over 1.3 billion monthly active users, WeChat has become an influential hub for social commerce, seamlessly integrating social media, eCommerce, and payment services.

The innovative approach of Tencent and the multifunctional capabilities of WeChat have contributed to the exponential growth of social commerce in China.

Global brands such as Sephora and Nike have effectively leveraged social commerce to engage with Chinese consumers. Sephora’s WeChat account offers beauty tips, product recommendations, and interactive features, allowing users to make informed purchasing decisions within the platform. Nike has created engaging campaigns through collaborations with popular influencers and celebrities, integrating product promotions, interactive content, and user-generated content to foster a sense of community and drive sales.

AI-Driven Marketing: Transforming Consumer Engagement Artificial Intelligence (AI) is reshaping the global marketing landscape, with China leading the way. China boasts the world’s largest AI market, estimated to be worth $7.9 billion in 2020 and expected to reach $26.44 billion by 2026.

Chinese consumers are particularly receptive to AI-powered chatbots, with 60 percent reporting positive experiences compared to the global average of 45 percent. This statistic highlights the immense potential of AI in transforming consumer engagement. Marketers can leverage AI to personalize communications, utilize predictive analytics, and optimize the customer experience.

JD.com, one of China’s largest eCommerce platforms, integrates Tencent’s AI into its retail operations. With computer vision and natural language processing, JD.com enhances retail operations by identifying and tracking products, optimizing inventory management, and delivering personalized recommendations to customers.

Regulatory Considerations and Ethical Challenges To succeed in the Chinese market, businesses must consider the regulatory and ethical challenges it presents. The Chinese digital ecosystem operates within a distinct regulatory framework that impacts how marketers navigate the market. In 2021, China implemented the Personal Information Protection Law (PIPL), strengthening regulations on data privacy and personal information protection. Companies must ensure they manage data in line with consumer needs and regulatory requirements.

Data privacy and protection are significant concerns for consumers and regulators not only in China but worldwide.

Surprisingly, a Euromonitor survey found that over 45 percent of respondents in China were willing to share data for personalized offers and deals, a significantly higher share compared to North Asia, the United States, and Western Europe. To maintain consumer trust and privacy while driving innovation, UK businesses must align with local guidelines, respect cultural sensitivities, and prioritise data security.

Keeping Pace with the Chinese Market China’s fast-evolving digital innovation landscape has transformed consumer behaviours and industry trends globally. To navigate this dynamic landscape, businesses must stay updated on the latest developments, leverage social commerce, embrace AI-driven marketing solutions, and ensure regulatory compliance. By understanding and harnessing the opportunities in the Chinese market, businesses can thrive in this rapidly growing environment. europeanbusinessmagazine.com 9

THE PRICE OF ONLINE SHOPPING:

PRESERVING PRIVACY WHEN IT COMES TO TRADING PERSONAL DATA Jonathan Newman, CEO of Motive.co

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icture this scenario: You approach a physical store, excited to browse, but before stepping inside, you’re stopped by an employee asking for your email and postcode. Would you give it to them? Or would you opt to take your business elsewhere? Strangely enough, this has become a common expectation in the online world.

This practice of data collection has been embraced by major retailers for years, leading smaller businesses to believe it’s the only tried-and-true way to succeed. However, the reality is that retailers can achieve their business goals without having to obtain excessive customer data.

The notion that gathering vast amounts of personal information guarantees sales or provides a personalised experience has lost its credibility, as consumers have become more discerning about sharing their private details online - and with good reason.

Somewhere along the line, the expectation changed. Handing over data online became almost second nature and ‘the norm’ when buying online.

However, times are changing. A study found that over 50% of consumers don’t feel retail brands are doing enough to protect their online data.

Further to this, 69% of UK consumers feel cookies and other online tracking practices are intrusive.

Consumers are waking up to the value their personal data holds and to how it’s being used, who it’s shared with and if the retailers they spend their money with are protecting it.

Unsurprisingly, the pair of shoes you’ve had your eye on for the last 2 weeks is no longer worth the barrage of marketing emails you’ll receive for the same pair of shoes after you’ve already bought them.

Comparing shopping expectations: in-person vs. online experience

Now that shoppers are more aware of the value their data holds, they’re more sceptical about who they give it out to. If they aren’t receiving a unique, useful or genuinely personalised experience after giving out their email address, postcode or family pet’s name then what’s the point? This has led to a lot of incentivised ploys to get this data - we’ve all seen the ‘10% off on your birthday’ offer.

The expectation of shopping in person vs online shouldn’t be different.

The customer’s experience should be the same - if we aren’t asking them for personal information at the door of the physical store, why are we doing this online?

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Recognising the value of personal data in retail

With this, research from Mckinsey found that businesses building trust into their DNA are more likely to see annual growth rates on their revenue of at least 10% or more. Building trust with consumers has never been more important. Data leaks, data misuse and scams to get data directly from consumers have never been more rife, and these types of breaches to consumer privacy always increase in times of economic uncertainty. Consumers will be looking for retailers who offer to protect their data, and

offer them the shopping experience they deserve, without filling in a website form to gain entry.

Harnessing the potential of search While understanding customer browsing patterns and preferences is vital for retailers, it should not be pursued at the expense of their customers’ privacy. Rather than resorting to intrusive tracking methods,

shop owners can leverage data analysis to identify trends and improve the search function’s efficiency on their websites, ultimately boosting sales and enhancing the online shopping experience. By offering personalised suggestions based on similar items or searches without compromising data privacy, search can serve as a helpful virtual shop assistant.

In short, consumers have grown tired of paying for access to online retailers with their personal data. They’re

realising that this is no longer necessary, and they will increasingly gravitate towards retailers that prioritise data privacy while providing an enjoyable shopping experience. The same way customer’s wouldn’t tolerate our data being taken at the entrance of a physical shop, they’re now expecting the same level of privacy online.

Retailers must swiftly adapt to this shift in consumer sentiment to avoid falling behind in the ever-evolving digital landscape. europeanbusinessmagazine.com 11

Women in Europe save 28% more than men despite having significantly smaller budgets Women in Europe save 28% more than men despite having significantly smaller budgets Berlin, March 7th, 2023 – How did the cost of living crisis affect saving rates in Europe in 2022? And how has the wealth gender gap influenced the behavior of female consumers?

For International Women’s Day 2023, The Mobile Bank N26 dug into the financial habits of women in 5 of its core European markets – Austria, France, Germany, Italy and Spain. The basis of the research is the analysis of the anonymized spending and saving data of over 2.7 million N26 customers in the above-mentioned markets during the period of January 2022 to January 2023..

Increasing financial pressure on women in europe Against the background of rising costs and prices, women are particularly under financial pressure as their monthly budgets are significantly smaller than their male counterparts.

However, despite having less disposable monthly funds, women demonstrated a greater capacity for planning and saving over the past year, in the various European countries analyzed. While they had on average 30% less money per month in 2022, they managed to save 11% more per month in the first half of 2022, and even 28% more than men in the second half of the year.

Leila Maria Kehl, Group Strategy Manager at N26 and founding member of the N26 Women+ ERG, attributes this observation to socio-economic reasons as well as gender patterns: “Globally, women do 75% of care work – an average of 4 hours and 25 minutes a day – more than three times as much as their male counterparts (https://www.actionaid. org.uk/our-work/womens-economic-rights/unpaid-care-and-domestic-work). This often involves setting aside money for children and the elderly. At the same time, women perceive a higher personal financial risk than men, which they often try to mitigate through saving. The so-called 12 europeanbusinessmagazine.com

motherhood penalty, unequal distribution of wealth (women own only 32% of all global wealth, women are 80% more likely to be impoverished at age 65 or older, only 2% of VC [venture capital] money in Europe goes to all-women startups), and unpaid care work also contribute to the financial discrepancy.”

How the cost of living crisis impacts the saving rate of european female consumers In Europe, a common trend is emerging among women: from the first to the second half of 2022, their average monthly available funds increased: +4% in Italy and France, followed by +2% in Germany and Austria. Meanwhile, the monthly available budget for women in Spain remained stable.

Most likely caused by overall increased prices for many goods and services, the plus in monthly available budget did not lead to an increase in the average monthly amount women saved in H2 compared to H1. On average, in the second half of the year, women in Italy saved 15 Euros less and women in Austria over 45 Euros less. Women in France were the only ones who managed to save 5 Euros

more on average in the second half of the year, compared to the first.

Despite higher inflation, spanish women were the biggest savers in europe in 2022 According to the study, Spanish women saved the most during the second half of 2022, and second most (only Austrian women saved more) in the first half of the year. Speaking in numbers: Austrian women set aside 9% of their monthly available funds between January and June, followed

by Spanish women who stashed 8% of their monthly incoming budget, while German women saved 7%. French women saved least, with 2%. Between July and December 2022, Spanish women’s savings (in relation to their available monthly funds) decreased by 1%, coinciding with the rise in prices from June onwards. However, despite the fact that Spain was affected by a higher inflation rate than most other European countries’ economies during that time, Spanish women were the biggest savers in Europe (compared to Austrian and German women, who saved 6% of their monthly available funds, and Italian women, who saved 1% in the second half of the year.

TikTok

TikTok, the Chinese ByteDance-owned video sharing app, has become an integral digital and popular platform for brands, especially in the pursuit of reaching younger audiences. According to the Future of Media report, part of WARC’s Marketer’s Toolkit survey, 75% of marketers plan to increase their ad spend on TikTok this year.

In this first of a new series of reports published today, Platform Insights by WARC Media takes a closer look at TikTok to provide an overview of the key data points that advertisers need to know about, spanning investment, consumption and performance insights.

Alex Brownsell, Head of Content, WARC Media, says: “TikTok plays a growing role in culture around the globe. Its potential ad reach stands at a reported 1.05bn, including 409.1m users aged 18 to 24. In 2022 it was the most downloaded app in the world for a third year running according to data from Sensor Tower.

And its full-screen, vertical video format has inspired copycat products such as YouTube Shorts and Instagram Reels.

“To launch WARC’s new Platform Insights series, we’ve taken a closer

look at TikTok to provide marketers with evidence-based insights on the challenges and opportunities the platform offers at a time when media costs are increasing and media models are shifting.”

TikTok to reach $15.2bn in global advertising revenue in 2023 A year in which the wider digital ad market is set to slow and media models are coming under increasing pressure, TikTok is defying the trend as its two-year growth is set to carry on into this year. According to WARC Media’s latest ad spend forecast, TikTok is set to reach £15.2bn in advertising revenue in 2023, up 51.7% and a near $2bn upgrade from last year’s forecast.

All product categories to increase TikTok advertising investment TikTok has been a major beneficiary of marketers choosing to rebalance budgets in light of media fragmentation. WARC Media forecasts all categories will increase ad investment on TikTok in 2023, including sectors that are forecast to see an overall ad spend decrease, such as automotive and soft drinks.

While each of the top five spending categories – technology & electronics ($2bn), toiletries & cosmetics ($1.8bn), retail ($1.7bn), clothing & accessories ($1.7bn) and telecoms & utilities ($1.5bn) – are forecast to see their combined annual spend on TikTok surpass $8.5bn in 2023, in other categories the growth will be more modest.

Technology & Electronics sector to boost advertising spend by 14.3% to $2.0bn on TikTok in 2023 WARC Media’s latest Global Ad Trends report, Media Models in Flux, found that advertising spend in the technology and electronics category is shifting toward digital ad formats in channels like video and audio. As one of the market’s fastest growing categories from an ad investment perspective, ad investment on TikTok is forecast to increase by 14.3% this year, to a combined investment of $2.0bn.

In the US, consumer packaged goods drove significant growth, increasing ad spend with TikTok by 84% in Q4 2022 compared to the quarter prior, according to data from Pathmatics

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Energy infrastructure investment in Asia key to deliver energy transition and meet net zero targets

With a population size of 4.68 billion people (60% of the world’s total) and rapidly growing energy consumption needs, Asia will play a vital role in global efforts to reduce carbon emissions towards a net-zero economy by 2050.

A new research report, titled “Carbon Cost of GDP: how investment in Asia can deliver the energy transition”, conducted by impact investor ThomasLloyd, shows the continent produces more than half the world’s 37.12 billion tons of CO2 emissions with just eight of these countries accounting for 45% of total global CO2 emissions.

The study, which measures the amount of CO2 emitted for every trillion dollars of GDP generated, presents insightful comparisons between countries by ranking their emissions’ intensity with respect to their 14 europeanbusinessmagazine.com

economic output. This comparison, rather than focusing merely on absolute emissions, makes clearer where impact investments must be allocated in the most efficient manner to tackle climate change. The study presents the findings that the global average Carbon Cost of GDP per country is 382 million tons (Mt) with Asian emerging economies, namely Emerging Asia[2] and Bangladesh, ranking for the most part notably above the 500 Mt levels in sharp contrast with Europe’s ‘Big Four’[3] with 132 Mt. In the last few decades, Western countries have been successful in both reducing the absolute level of their CO2 emissions, and the carbon intensity of their GDP, but in Asia, it is a different story. This is shown by the 2021 Carbon Cost of GDP comparison for countries like Vietnam, with

890 Mt of CO2 emissions per trillion dollars generated, or India, with 853 Mt of CO2 emissions per trillion dollars. These Asian countries stand out as the world’s most carbon-intensive producers followed closely by Malaysia, China, Thailand and Indonesia with at least four times more carbon emissions than Europe’s Big Four[4].

These findings suggest a need for major investment in climate infrastructure and renewable energy projects across Asia to accelerate the energy transition and tackle climate change where investment can be most impactful. Particularly in Asian emerging economies, as this analysis presents, demographic change and economic growth are rapidly driving upward the demand for energy which are relying on high carbon-emitting fuels to power their growing economies.

Additionally, ThomasLloyd’s report highlights the significance of changing global demographics, with Asia now accounting for almost 60% of the world’s population and the life expectancy of the average citizen rising to the age of 74 compared to just 41 in 1950.

Nick Parsons, Head of Research at ThomasLloyd commented: “As a developer and financier of sustainable real infrastructure assets, we are proud to play a part in the region’s economic transformation and in limiting the intensity of Asia’s carbon production and consumption, whilst serving the needs of the region’s rapidly growing population.

“Through this Carbon Cost of GDP report, we are able to identify where progress has been made, and where further interventions and investment are required, as part of ThomasLloyd’s commitment to helping deliver the energy transition across Asia.

With the ‘carbon cost’ of GDP in Asia almost four times higher than that of the four largest economies in Europe, investment in Asian renewable energy is a vital step to achieving a Net Zero world by 2050. “

Sonovate surpasses £3.5bn in funding to support ‘cost of running a business’ crisis

its customer base, especially in the enterprise space, whilst delivering added flexibility for export financing.

The volume of funding provided to customers over the course of 2022 increased by 50% year-on-year as adoption of embedded finance models gains momentum. Meanwhile, enterprise customers* receive approximately one third of Sonovate’s total lending volume. This significant increase in volume demonstrates the continued growth in the use of contract and freelance labour, and indicates the market potential in the years ahead.

In September 2022, Sonovate surpassed £3 billion of funding since inception – an increase of £1 billion in just 12 months as the lender continues to scale at pace. Sonovate envisages continued strong growth as it expects to continue on its growth trajectory in the UK and plans to enter new markets.

Richard Prime, Co-founder & CEO of Sonovate, commented: “Rising costs have presented many challenges, but ambitious businesses are embracing the opportunities to drive growth and increase their competitiveness by securing finance to invest in their workforce.

Fintech lender Sonovate has surpassed £3.5bn in total funding and £1 billion in annual funding for the first time as rising costs force businesses to seek finance to manage cashflow and drive growth.

During 2022, Sonovate provided businesses with £1.1 billion in finance, a 58% increase on the £700 million lent in the previous year, and more than double 2020’s figure of £444 million.

Lending hit £312 million in Q4 2022 alone – up 30% from the same period in 2021.

Last year also marked the first time the amount of funding provided in a month surpassed £100 million, with Sonovate initially hitting this sum in October, then again in November when £110 million was loaned to

businesses. This high was a 22% jump on the previous highest performing month, when £90m was provided to businesses.

Sonovate’s record performance was driven in large part by the expanding adoption of its business finance and technology services by consultancies, recruitment agencies and labour marketplaces throughout the world to allow them to pay contractors on time.

The increase in finance deployed to businesses was made possible by the securitisation deal with BNP Paribas and M&G Investments that Sonovate completed in Q3 2022. This deal added £165 million to Sonovate’s funding structure, increasing its capital efficiency and expanding

“With workers demanding new ways of working in response to both the pandemic and the cost of living crisis, and businesses looking to reduce costs where possible, more and more companies are building their teams around a contract-based workforce. Businesses benefit from this approach as they’re more agile to adapt to changing workload or cashflow and, as this trend continues, the need for on-demand funding will continue to soar.”

To date, more than 33,000 freelancers, contractors and gig workers in 44 countries have received payments from over 3,300 businesses supported by Sonovate. During 2022, Sonovate onboarded more than 170 new customers.

To support this growth, Sonovate is accelerating recruitment and aiming to expand to 230 employees during 2023. europeanbusinessmagazine.com 15

Just in Case or Just in Time?

The case for reimagining the supply chain model Michiel Verhoeven, Managing Director, SAP UKI

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he impact of supply chain disruption has been felt country-wide. Supermarket shelves have been left empty, packages have been delayed during shipping and gas and oil prices have rocketed. The last few years with the pandemic, the war in Ukraine and economic downturns have shaken the world and left global supply chains, and the businesses heavily reliant upon them, at breaking point.

And yet, there are still challenges to come. For many organisations, and particularly those in the UK, supply chains will continue to be stresstested as the country tumbles towards the longest recession since records began. Now more than ever, businesses have an opportunity to implement what they have learned since the beginning of the pandemic and reimagine the supply chain process, moving away from a Just in Time to a Just in Case model, avoiding further financial and reputational repercussions.

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Exploring the causes of supply chain disruption Since the start of the pandemic, supply chain issues have negatively impacted businesses in several ways, in particular through delays in production of goods and the delivery of services, a decrease in revenues, and a loss of customers. According to the Institute for Government, labour shortages, Brexit trade barriers, global supply problems and panic buying are all contributing to supply chain disruptions in the UK. The pandemic has been the main factor causing current supply chain issues in the UK despite claims that we’ve now seen the back of it, and according to a survey, 98% of UK businesses agree that factors such as social distancing restrictions, travel restrictions, speed of vaccine distribution and remote working are to blame for the continued struggles.

Secondly, 86% said that the impacts of Brexit, such as visa and border restrictions and a lack of available talent, are a leading cause also. Since then, new challenges have emerged with record

inflation numbers and a huge increase in energy prices adding to the challenges.

Where supply chain management was once about cutting costs, businesses are now faced with the challenge of staying ahead of consumer demand, while improving resilience, cutting carbon emissions, and still keeping costs down. With almost a quarter (23%) of businesses anticipating that supply chain issues will still be an issue in the summer months, now is the time to rethink the existing model.

Embracing a new supply chain philosophy For decades, companies prioritised costs, speed, and convenience when selecting suppliers, building factories, and deciding how much stock to keep on hand. The ‘Just in Time’ philosophy seemed inviolate – the drive for the lowest production costs, the prioritisation of tier-one suppliers, the concentration of suppliers in one region or location, a reliance on historical data to predict demand, and

distribution by the pallet-load. But these have now fallen away.

The majority of UK businesses (84%) now think they should move on from a Just in Time supply chain model to a ‘Just in Case’ model to overcome future supply chain crises. With businesses set to face broader and more frequent global shocks over the next decade, the fate of supply chains has become a boardroom issue, and with Just in Case, companies have an opportunity to not only make themselves stronger but to improve their competitive stance too.

The Just in Case process fundamentally allows businesses to improve their contingency planning. Whether it’s labour shortages, delivery delays or resource scarcities, businesses can offset disruption and remain resilient by manufacturing surplus goods – predicting increased demand and ensuring steady availability in times of need. It means that customers are shielded from disruption out of their control and can access goods and resources when they need it most.

Technology provides a helping hand But transitioning away from Just in Time to Just in Case requires the support of advanced technology, and in particular, in enhancing traceability along the supply chain. Historically, traceability has proven to be a key hurdle for businesses in supply chain transformation and so it’s no wonder that 70% of UK leaders are now planning to adopt modern technology to help overcome these challenges in the next couple of years.

Traceability is at the heart of being able to predict demand, provide realtime updates, deliver steady availability of goods, and build a sustainable business -all while meeting regulatory compliance. It also acts as a key competitive differentiator for value creation by supporting customers purchase decisions. Nike, for example, has recently taken the lead on traceability and has set a precedent for others to follow.

With traceability also comes the option to review where efficiencies

can be made and to review the value of being involved in a global supply network versus a local one. As many as 56% of UK businesses are now planning to prioritise UK-based supply chain solutions to protect against global disruption and accelerate the production of goods and time to market. The movement towards localisation can also be seen at a political level, with the UK Labour Party’s commitment to building a UK-owned energy company – Great British Energy.

Ultimately, supply chains today remain in flux – driven by a set of

macroeconomic issues that show no sign of being resolved quickly. Leaders must show that they have heeded the lessons of the past few years and evaluate whether their existing model is suitable for their business and their customers. The Just In Case model provides businesses with a viable alternative that is suited to contingency planning and delivering service continuity. With the trends indicating this is where UK businesses are focusing their attention, leaders cannot forget the value of advanced technology in helping them weather the storm.

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Why public organisations need to start gearing up for Cities 4.0

By Mark Gannon, Director of Client Solutions – Public Sector and Nigel Hall, Director of Client Solutions – Health, at Netcall

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echnology has become increasingly personalised and portable, and a significant part of our daily lives. Many would say it has become a necessity. The pandemic saw unprecedented digitisation rates, with consumers and citizens expecting greater levels of digital offerings and integrations. We became reliant on digital interfaces to work, shop, manage our health, socialise and more – uncovering a need for digital integration and interconnectedness.

Technology’s role in our lives is growing. Smart cities are on the rise – referring to places that are leveraging and integrating technologies, data, communications and collaboration to facilitate a range of objectives. These include making citizens lives better, generating revenue and promoting sustainability. The global smart cities market is projected to grow at a compound annual growth rate of 22.6% over the next five years. In a survey of 167 cities around the world, 54% reported that the pandemic has accelerated the shift to online healthcare and 53% said it permanently changed the way we live, work, socialise and travel in cities.

According to 65% of surveyed cities, the biggest lesson learned during the pandemic was that smart cities will be critical for their future.

What are smart cities and why are they critical?

We hear a lot of talk about ‘smart cities’ but often that neglects a large part of the conversation – it’s about smart infrastructure, across places and regions, including small towns and villages as well as big cities – it’s about “smart places”.

Often, the conversation gets lost in the technology, however, the tech and 18 europeanbusinessmagazine.com

In 2000, less than 7% of the world had internet access.

Fast forward to today and that figure rises to a whopping 63%. A fact that is made even more astounding when you think that includes emerging and developing economies. Of that 63%, 93% are on social media – most of us didn’t even know what that was in 2000. data are merely tools for creating the connections needed to deliver better social, economic and health outcomes.

Currently, cities and the organisations within them are generally siloed. Despite often having similar goals, those organisations don’t routinely connect their data to enable more effective, efficient and quality services for citizens. Even within organisations, data often isn’t shared across departments, creating inconsistencies and disruptions for citizens. Anyone who has been through social or healthcare processes knows first-hand that these services are not always designed with the citizen’s experience in mind.

Data is instrumental in this equation. Yes, we need the right technological infrastructure for smart cities, but that is just the engine – it is data that powers the benefits of smart cities. Data empowers organisations to take a more strategic approach to their priorities. For example, data regarding health inequalities combined with information on the environment, air pollution or heat loss can offer insights to determine the best strategies and investment areas. This is a significant upgrade to the more typical generalised approach, which lacks direction.

Why should public organisations care about this now?

People and businesses are struggling, the economy is in recession, and public sector funding continues to be under pressure. The current systems and infrastructure just aren’t sustainable long-term.

Too often, we observe local authorities and health organisations duplicating service provision to citizens that live in an area. These are inefficiencies that the health and wider public sector, with their extremely tight resources, simply can’t afford.

What if organisations could respond to events before they happen? They could increase cost-savings, efficiency and service by utilising predictive modelling and analytics. Machine learning and artificial intelligence could be leveraged to inform better decision-making and drive efficiency-boosting innovations. For example, a council could install sensors, which are not expensive, that make them aware if water levels are getting too high and there is potential for flooding. They could then intervene before any damage was done and identify

vulnerable citizens across the locality from multiple, pooled data sources.

The costs saved from investing in a few sensors and sharing intelligence versus dealing with the aftermath of a flood are significant.

However, before data can be leveraged in this way, a more integrated approach needs to be established.

The cities and organisations that fail to pursue smart infrastructure not only risk missing opportunities to improve the well-being of the citizens they serve, but they also risk the overall health of the cities they operate in and their own economic development.

As smart infrastructure continues to expand, investments will naturally flow to areas that have developed smart ecosystems and the transportation, logistical and environmental benefits they inherently bring. The gap between smart and ‘unsmart’ places then widens in a self-perpetuating cycle.

How can organisations best gear up for Cities 4.0 today?

Some mistakenly assume that smart infrastructure must be complicated, costly and involve mass restructuring

of existing infrastructure. However, in reality, the best approach is an incremental one. This is especially the case in the U.K., where many of our cities and infrastructure are aging and not easy to retrofit.

This begins with policies. The vast majority of councils publish transport, planning, and procurement policies – the key is to ensure these are ‘smart’ friendly and work towards Cities 4.0.

For example, local planning policies should stipulate smarter infrastructure, such as full fibre to the home and solar panels for new builds, avoiding rework costs in the future.

Organisations should collaborate to create agreed standards regarding smart cities. This will avoid a Frankenstein-like monster of infrastructure that struggles with interconnectivity.

Organisations need to assess their procurement processes and determine whether they’re encouraging or stifling innovation. Make sure any solution your organisation adopts has open standards that play well with other systems and solutions.

This is crucial to avoid future issues of numerous smart city platforms

across an area that can’t interact with devices on other platforms, obstructing data consolidation.

If your organisation has an open approach from the start, you’ll be able to utilise other solutions you may need in the future, as opposed to being locked in with a single proprietary offering. A vendor agnostic low-code application platform (LCAP) can serve this purpose, giving organisations flexibility in the future whilst also enabling them to begin developing solutions today. Its drag and drop simplicity makes it an accessible solution for under resourced councils and health organisations by enabling a wider cross section of people to join the development team.

As our environments become increasingly ‘smart’, organisations need to be able to update, improve and monitor their devices without relying on proprietary platform owners, which is why ensuring any adopted solution is agnostic during the procurement process is essential.

An additional benefit of low-code is its adaptability and innovative potential.

Organisations need to be able to adapt and respond quickly to changing needs and circumstances. With an LCAP, the traditionally long development cycle is replaced with a quick, cost-effective cycle that allows for repeated iterations and experimentation.

Given that innovation is the bedrock of smart cities, this functionality of LCAPs is critical. The best thing organisations can do is ensure they are supporting innovation with the right solutions, policies and standards, inching towards an ever-smarter infrastructure.

A greater purpose At the end of the day, the purpose isn’t smart cities – that’s the enabler, the purpose is enabling thriving communities and great places where people want to live, work and play.

This will require consideration of privacy concerns and options for those who are less tech-savvy. Public sector organisations will need to drive digital transformation to meet the demands of citizens and to support effective operations. The result will be a world built around the individual – a citizen-first world. europeanbusinessmagazine.com 19

Is COPPER set for long-term gains?

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opper, a versatile commodity that can be used for a range of industrial applications in a variety of sectors, has been the subject of an increasing amount of discussion amongst investors in recent weeks.

On the 4th of November, prices for the 100% recyclable metal rose by 7.5%, the largest daily rise since 2009.

By Giles Coghlan (pictured), Chief Market Analyst, HYCM Despite this, copper futures are trading around 17% lower in the year to date at the time of writing, which is likely to be deterring investors from backing the so-called ‘king of green metals’ in the short-term.

However, demand, and therefore prices, are likely to grow in the coming years as the world begins its shift to a greener future at a faster pace.

An integral part of the ‘green revolution’, increasing production of electric vehicles (EV) and implementation of clean energy projects is set to double

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the demand for copper to 50 million tonnes by 2035.

As such, the long-term future for the price of copper looks bright, but what’s been holding it back?

What is driving low demand and prices for copper in the short-term?

Like many other commodities, copper prices are largely driven by the overall health of the global economy, due to its wide applications across a variety of industries. As such, global recessionary fears are limiting demand and pushing prices lower.

Indeed, concerns that rampant inflation would limit the spending power of large manufacturers caused threemonth copper on the London Metal Exchange (LME) to drop by 2.8% in July, dipping below $7,000 per tonne for the first time since November

2020. Such a decrease came in the midst of a four-month period that saw prices fall by 35%. Clearly, copper markets and investors have little confidence in copper in the shortterm future.

Similarly, central banks’ hiking cycles are also strangling demand. In September, for instance, the Federal Reserve increased the base level by 75 bps, causing predicted copper delivery for December to decline by 3.89%. In this case, copper markets appear to be concerned that aggressive central bank action to combat inflation will cause global economies to slip into recession, which would ultimately drive down demand.

A strong USD is another factor that has limited the price performance of dollar-priced metals like copper. As a result, buying copper has become more expensive for investors holding other currencies, hindering investor sentiment.

Similarly, rising COVID-19 cases in the world’s largest importer of copper, China, could limit economic activity in the country due to its Zero-COVID policy, which will impose further pressure on demand. Indeed, the premiums on Chinese copper imports have plunged from $144.50 a tonne in the first two weeks of November to $102.50 in the week of the 14th of November as a result.

Increased supply Meanwhile, the production of copper has been steadily increasing. In fact, global refined copper production is set to rise to more than 26 million tonnes in 2023.

As a result, some analysts are predicting that the copper markets will go into a surplus of around 691,000 tonnes in 2023, up from a deficit of 162,000 in 2022. This will inevitably lead to lower prices in the short term. Indeed, experts say that prices could drop as low as $6,600 between December and March. However, perhaps the long–term future for copper looks brighter than short.

Why the shift to a greener future means that copper will reach new heights Firstly, it’s important to note that, as a barometer of global economic health, the demand for copper is likely to increase as the world’s economies recover following the current recessionary period. However, there are several other long-term demand trends that will be increasingly supportive to copper.

The transition to clean energy, for example, will undoubtedly increase demand. In fact, since renewable energy systems require 5x more copper than traditional power generation, experts suggest that the world will need to use more copper in the next two decades than it has in the

last 130 years if we are to effectively make the transition to net-zero. For example, 3.6 tonnes of copper are needed to produce a megawatt of wind energy. By 2027, it said that nearly 600,000 tonnes of additional copper will be needed to keep up with this demand.

Meanwhile, electric vehicles (EV) require around 80 kilograms of copper per car. As the popularity of EVs grows, so too will demand for copper. In Q2 2022, for instance, EV sales accounted for 5.6% of the auto market, up from 2.7% in Q2 2021. Paired with the fact that EVs use 2.5x more copper than their fossil fuel guzzling counterparts, this demand should boost prices in the copper markets. Indeed, even if the world didn’t invest in green energy solutions, the rising demand for EVs alone would require 6 million tonnes of additional copper production.

For copper investors, this should be the cause of a good deal of optimism. As demand catches up with supply, prices will inevitably rise. What’s more, copper could provide cheaper exposure to the green revolution than investments into wind or solar energy, so holdings in copper are likely to be increasingly profitable in the years to come.

To briefly conclude, while the demand – and thus prices – for copper is being pressured by fears of a global recession, the scale of the climate emergency and the need for a ‘green revolution’ grows by the day. As such, copper will be increasingly in demand over the next decade and more, which should

provide investors with some exciting opportunities in the long-term.

Copper CFD, as well as other instruments, is available for trading at HYCM broker.

High-Risk Investment Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. For more information, please refer to HYCM’s Risk Disclosure.

Giles Coghlan is Chief Market Analyst, HYCM – an online provider of forex and Contracts for Difference (CFDs) trading services for both retail and institutional traders. HYCM is regulated by the internationally recognized financial regulator FCA. HYCM is backed by the HYCM Capital Markets Group providing trading services since 1998. The Group via its relevant subsidiaries have representations in Hong Kong, United Kingdom, Dubai, and Cyprus.

*Any opinions made in this material are personal to the author and do not reflect the opinions of HYCM. This material is considered a marketing communication and should not be construed as containing, investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments. Past performance is not a guarantee of or prediction of future performance. HYCM does not take into account your personal investment objectives or financial situation. HYCM makes no representation and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by an employee of HYCM, a third party or otherwise.

europeanbusinessmagazine.com 21

IT Investments CIOs Should Consider Before Recession Strikes

By Chad Chiang, Managing Director UK, Synology

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hen the slowdown in economic growth is inevitable, economic recession becomes the primary consideration in the minds of most business leaders.

If a recession does occur in the short term, it will create an unprecedented financial cycle. According to Ryan Prindiville, partner in accounting and business advisory firm Armanino Consulting, 2022 will see record low unemployment in the U.S. but record high inflation. Therefore, the Chief Information Officer (CIO), IT director, or business executive must face historically high prices of technology and services. Even Apple Music, Apple TV+ and Apple One, for example, will

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be impacted by a UK price hike in December 2022.

Meanwhile, corporate performance has been growing at record levels over the past few years. So, you’re going to see a divide of opinion that business leaders, forecasters and seers have never seen before. I believe that it is common sense that companies will cut costs before the recession; however, cutting certain projects may have some negative impacts on companies. It is better to seize the opportunity to accelerate investment to improve the long-term efficiency of enterprises.

Some CIOs may want to move systems to the cloud because the business will want to have the ability to scale up or down in a controlled recession. But there are investments that

IT executives and CIOs need to make now to withstand a long-term downturn. However, investing in these projects is not necessarily a short-term solution. IT leaders should gradually plan for a more flexible environment, but a three to six-month adjustment timeline is required.

The important goal is to think about how to change the technology organisation comprehensively and consistently, to ensure that investment in important projects can expand the base and create flexibility for the enterprise. Here are a few areas that IT executives should give more thought to, in order to stay ahead of an uncertain economic climate; especially in areas where, recession or not, shifts can have long-term operational benefits.

1. Gain a deep understanding of cost and value structures. IT leaders should always have a deep understanding of cost structures and the value that IT services and investments can bring to the entire organisation.

For executives who haven’t figured out how to establish transparency and clarity about their IT investments, now is the time to invest and create the system. Doing so will help IT executives make informed decisions that can save costs or support additional investments. In most business organisations, most of this information belongs to tribal knowledge (which refers to the knowledge owned by a specific ethnic group), which is not easy to obtain or act on.

2. Doubling Down on Agile Development Methods. If your organisation isn’t already investing in adopting agile development methods, skills and processes, use this downturn to give it a boost. Building an agile toolset is not something that can be done overnight. If businesses want to remain resilient through a potential economic downturn, now is a great time to start transforming. Adopting agile development methods allows IT to increase the frequency and depth of updates to corporate development programs to align with corporate development priorities and directions. Enterprises should adopt agile methods to ensure that systems in a

constantly changing environment can perform corresponding functions for the enterprise. In challenging times, increase the frequency and depth of adopting agile methods, strengthen connection and execution capabilities, and enable enterprises to face rapidly changing challenges.

3. Increased investment to improve predictive analysis capabilities. A cost-effective investment that IT departments can make now is in the field of business predictive analytics and intelligence, providing organisations with better tools to gain insight into enterprise spend analysis. IT leaders should invest in more analytical capabilities, more useful and smarter reporting tools, and greater project financial transparency to help smart CFOs make better decisions.

4. Improve efficiency faster. It pays to act first before a potential recession takes hold; the CIO should promote and protect projects that will improve efficiency and productivity.

IT executives should seriously consider project initiatives that would be at market risk if not accelerated.

If the downturn does affect organisations, any cost-cutting or efficiency-enhancing measures implemented now will lead to a better overall position. We found that the IT departments of the top 10% of enterprises automated processes 2.1 times higher

than their peers; and finally reduced the cost of operating and managing technology by 47%. Before the recession began, certain departments were already able to automate to a considerable degree, including HR, finance, and IT itself. Any IT executive concerned about the potential financial impact of a recession should focus on implementing technologies such as automation so that developers and systems integrators within the organisation can free up IT team members’ time for more impactful work.

5. Reallocate operating cost savings.

During a recession, IT operating costs may naturally decrease. A smart CIO will shift some of those idle operating costs to new IT infrastructure instead of wasting that money elsewhere in the business or sitting in the bank. The CIO should effectively transfer these savings to equipment that improves infrastructure efficiency to accelerate the progress of existing projects.

6. Constant looking for the best alternative IT solutions to get the job done. Paying the big money on IT equipment doesn’t always guarantee the performance or getting the same value return, IT world and technology is constantly evolving, be open minded to try any available solutions that does the exact same job but with an affordable price tag, especially in the networking and storage area.

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How digital signatures and blockchain technology can help to mitigate fraud risks

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age Borg, Chief Technology Officer of Scrive, explains the preventative measures banks should be implementing to protect their customers In the first half of 2021, criminals stole a total of £753.9 million through fraud, which represents a 30% increase compared to H1 2020.

While advanced security systems managed to prevent a further £736 million from being taken [1], it does raise questions about what other preventative measures banks should be putting in place to further protect their customers.

When blockchain technology is spoken about, most people tend to associate it with cryptocurrencies such as Bitcoin and Ethereum. However, we are increasingly seeing Blockchain technology rapidly disrupt other sectors including cybersecurity, politics, and data analytics.

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One of the potential applications, which blockchain or “Distributed Ledger Technology” (DLT) is practically made for, is to make electronic signatures and contract management more secure. To understand how DLT can be implemented to make the signing process more secure and mitigate fraud risk, one must first understand the foundations of blockchain technology.

What is blockchain?

Blockchain is a decentralised digital database of transactions copied and distributed throughout a network which means once recorded, transactions cannot be altered, hacked, or defrauded. Fabricio Santos of CoinDesk compared it to “a series of glass boxes with content everyone can see and verify but can’t change.”

Unlike most conventional databases, composed of tables with columns

and rows, a blockchain is made up of sequential blocks securely linked to each other using cryptography; meaning that if a single block in a chain is modified, it will be immediately recognised that the chain has been tampered with, prohibiting anyone from going backwards and covering their traces if they corrupt an entry.

How does it work?

Any digital file or group of files can be represented by a unique fingerprint known as a “hash” derived by a mathematical calculation based on a file’s raw digital information. The most minute change to a file will result in a different hash value. The hashes, not the files themselves, are the records that are stored in the blockchain.

Therefore, it is possible to demonstrate that a file hasn’t been altered by recalculating its hash and matching

Combining DLT and electronic signatures will help to store, protect, and ensure signature authenticity of your documents, making compliance with regulations such as GDPR easier.

E-signature software features such as signing party authentication protect your agreements so that they can only be accessed and signed by the intended parties. Partnering with an eIDAS Qualified Trust Service Provider will help to further ensure the integrity of your document as their Qualified Electronic Signatures are regarded at the highest level. Electronic signatures serve as an electronic timestamp, adding an extra layer of protection to your document.

Digital identity checks can also be integrated enabling the signing party to authenticate at any time, or any place, signing the document within the same digital workflow, speeding up customer transaction times.

The future of DLT and electronic signatures

the hash to its corresponding record in the blockchain.

Applying blockchain to e-signing In the context of electronic signatures, DLT is an ideal approach to protecting document integrity after the signing process. Unlike other approaches such as certificates, which can expire, or keys, which can be decrypted with sufficient time or computing power, DLT is both time and hack-proof.

DLT and e-signature software work in unison to guarantee the integrity of your document by sealing it with a digital signature. Blockchain technology provides a method of securing the digital signature by entering it into a permanent, verifiable public record. This means that in the event of a dispute, you can prove whether your document has or hasn’t been tampered with.

The perfect partnership for security, risk and compliance In highly regulated industries like BFSI, one of the main challenges to implementing digital services, for traditional branches as well as challenger banks, FinTech and Insurtech companies, is meeting regulatory compliance. Paper documents can be easily modified, and signatures can be forged. In addition to the complexities of compliance, documents that are stored inside filing cabinets still risk being lost or stolen.

Implementing the public-permission ledger model in the context of DLT provides a hybrid of public and private blockchains where anyone can access them if they have permission from the administrators to do so. This provides greater transparency, making the audit processes easier, quicker, and less complex to manage.

So, what’s next for DLT and electronic signatures? How else could we see them being used? As more companies adopt blockchain technology, the concept of DLT being adopted in our personal lives doesn’t seem too farfetched. Digital signatures could represent you as a digital identity with the help of blockchain technology and the EU has already begun to explore this as part of the Digital Identity Wallet. Businesses that have already implemented and are familiar with DLT will have an advantage over those that are yet to integrate the technology as connecting and linking the Digital Identity Wallet with other distributed ledgers will be relatively easy.

Furthermore, using electronic signatures in combination with DLT could significantly help reduce fraud as its structural design allows permitted users to check for fraudulent activity easily. This in turn lowers banking losses and improves overall operational costs, while enabling financial institutions to leverage the digital signatures for value-added services for their customers.

[1] https://www.ukfinance.org.uk/system/files/Half-year-fraud-update2021-FINAL.pdf europeanbusinessmagazine.com 25

The Moroccan Resilience: Amidst Quakes and Economic Shakes

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n the heart of North Africa, Morocco’s tale of determination echoes with steadfast resilience, underlined by the unwavering leadership of King Mohammed VI. As delegates from across the globe gather this month for the IMF World Bank Assemblies, they are greeted by a nation reborn from the ashes of adversity. On the 9th of September, a devastating earthquake rocked the region. Yet, guided by the vision and command of His Majesty, the nation not only rallied together to mount an impressive rescue operation amid treacherous mountain terrain but also showcased an enviable spirit of unity and solidarity.

The world watched in admiration as Morocco, true to its history and spirit, orchestrated a rapid and efficient response. Against the rugged backdrop of the Atlas Mountains and the intricate web of winding streets in ancient medinas, rescue teams, under the King’s directive, showcased unparalleled expertise and commitment, managing to navigate a challenging environment, reminiscent of tales of human tenacity in times of disaster. But it wasn’t just the expertise that stood out; it was the scenes of ordinary Moroccans coming together, neighbours aiding neighbours, and strangers becoming saviours, all inspired by the King’s call to unity, that painted a vivid portrait of societal cohesion.

In a parallel narrative from over a decade ago, Italy, following the tragic earthquake in L’Aquila, held the G8 summit — a testament to the indomitable spirit of a nation and its people. Now, as Morocco takes center stage in hosting the IMF World Bank Assemblies under the auspices of His

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Majesty the King Mohammed VI, it’s more than just an event; it’s a testament to the Kingdom’s mettle. This gathering isn’t simply about global economies or financial strategies; it’s an affirmation that Morocco, much like Italy in its time, is determined to rise, rebuild, and reassert its position on the world stage, with the guiding hand of its leader.

This year, the spotlight isn’t just on global economies or financial strategies. The spotlight is on Morocco itself — a beacon of hope and resilience, showcasing to the Global South and the world beyond, that calamity might shake its land, but never its spirit or the determination of its leadership.

As dawn breaks over the Atlas Mountains, the Kingdom of Morocco hums with an energy resonating from its bustling cities to its tranquil deserts.

Much has been said about this nation on the cusp of the Sahara emerging as the region’s new powerhouse, yet Morocco’s ascension is no ordinary tale.

An astounding achievement, Morocco’s management of the COVID-19 pandemic stands as a testament to its resilience and strategic foresight.

Amid the global turmoil and escalating health crises, Morocco, as cited by the World Bank, has “demonstrated exceptional agility in its public health response.” The measures, ranging from a prompt lockdown to a successful vaccination campaign, manifested in a level of stability unseen in the region.

But Morocco’s success story isn’t only penned on the backdrop of the pandemic. It’s the leading economy in the southern Mediterranean, a region often shadowed by turbulence.

This status owes much to Morocco’s

King Mohammed VI presiding crisis committee after the earthquake at the royal Palace of Rabat.

unwavering institutional and macro-economic stability, a resilient bedrock from which the country continues to thrive.

Nestled at a critical crossroads of Africa, the Middle East, and Europe, Morocco is often caught in the ebb and flow of diverse global currents.

Yet, it has not merely weathered these tides. Instead, the Kingdom has positioned itself as a beacon of stability and growth, defying the odds with remarkable strides in areas like renewable energy, automotive manufacturing, and finance.

In the words of King Mohammed VI during his recent address, “Our

ambition is to make Morocco a space for convergence and coexistence, a crossroads where North and South, East and West meet.”

From the 9th to 15th of October 2023, Morocco ascends to a global platform by hosting the International Monetary Fund (IMF) and World Bank General Assemblies in the vibrant city of Marrakech. These high-profile meetings place Morocco at the epicentre of global dialogue, particularly as the role and mission of multilateral organizations are intensely debated. They’re not only a testament to Morocco’s increasing global influence but also a validation of the

country’s economic progress and strategic importance.

As Morocco prepares to welcome delegates from around the world, one might ask: Why has Morocco become the new capital of the Global South?

The answer, it appears, is woven into the fabric of the nation’s strategy and identity. Morocco’s adept handling of domestic challenges, coupled with its diplomatic finesse and geographic centrality, has positioned it as a meeting point for conversation, exchange, and growth.

This statement encapsulates the essence of ‘The Moroccan Factor.’ It’s not just about economic numbers or

strategic policies, but rather the conviction of a nation and its people to build bridges across the Global South, and beyond. Through a blend of tradition and modernity, stability and dynamism, Morocco is setting a new course, not just for itself, but for the entire Global South.

As the sun sets over Marrakech in October, it will not merely be the close of a conference day, but a symbol of a rising star - The Kingdom of Morocco - illuminating a new path for the Global South. The world watches, not just in anticipation, but in admiration of the Moroccan Factor. europeanbusinessmagazine.com 27

The New Geopolitics of Morocco Iconic of Morocco’s strategic positioning on the global stage is its upcoming role as host of the International Monetary Fund (IMF) and World Bank General Assemblies in Marrakech. A landmark event, it marks the return of the meetings to African soil for the first time in half a century, symbolising the continent’s increasing significance in the global economic dialogue.

Peeling back the pages of history, we find Marrakech at the centre of two significant world events over the past three decades. The first of these was the concluding round of the General Agreement on Tariffs and Trade (GATT) in 1994, a momentous event held under the aegis of then Crown Prince, now His Majesty, King Mohammed VI. The Marrakech Declaration saw the establishment of the World Trade Organisation (WTO), an instrumental body promoting international trade and arbitrating trade disputes. Since its inception, the WTO has been pivotal in mitigating trade tensions, reducing tariffs, and fostering economic cooperation globally, contributing to a more connected and prosperous world.

Later, in 2016, Marrakech was once again at the forefront, hosting the 22nd Conference of Parties (COP 22) to the United Nations Framework Convention on Climate Change.

Morocco demonstrated its commitment to environmental stewardship, with King Mohammed VI asserting, “We, in Morocco, view the environment as a key component of human rights. Our vision is based on achieving balance between development and protection of the environment.”

Indeed, Morocco’s evolving geopolitics have seen the Kingdom recalibrate its strategic focus, shifting gears towards diversifying its global alliances. The recently witnessed major breakthrough in this area has been the United States’ recognition of Morocco’s sovereignty over the Western Sahara. This paradigm shift on a sensitive issue represents a new chapter in Morocco’s diplomatic landscape.

Adding to this geopolitical realignment is the resumption of diplomatic 28 europeanbusinessmagazine.com

relations with Israel, an announcement that reverberated across the region, promising a new era of peace and cooperation. These moves, alongside the changes in Morocco’s relationship with Europe—Spain and Germany now back Morocco’s autonomy plan, aligning with the US position—signify a fundamental shift in the Kingdom’s international standing.

Furthermore, Morocco’s burgeoning alliance with China underscores this new geopolitical configuration. Amid the global health crisis, Morocco has closely collaborated with Beijing to secure COVID-19 vaccines, reinforcing its commitment to public health and its role as a regional health leader.

In a world still reeling from a pandemic and fraught with geopolitical complexities, Morocco’s new alliances and strategic decisions provide a glimpse into the Kingdom’s future role in the global arena. Marrakech, a city once a medieval trading hub, again finds itself at the crossroads of international discourse, as it prepares to host the IMF/World Bank General Assemblies. It is a testament to Morocco’s unyielding commitment to its global partnerships and to its leadership steering the country towards a future as promising as the Saharan sunsets that paint its skies.

Furthermore, an integral part of King Mohammed VI’s vision is a robust commitment towards Africa, evidenced by Morocco’s substantial investments in South-South partnerships. This commitment is a testament to the Kingdom’s belief in the promise of shared growth and mutual cooperation.

Economic activities tell the tale of Morocco’s increasing engagement with its African neighbours. From telecommunications and banking to construction and energy, Moroccan companies are establishing a strong presence across the continent. Maroc Telecom, for instance, now operates in ten African countries. Meanwhile, the banking giant Attijariwafa Bank has expanded its operations to 14 African nations. Additionally, the Moroccan phosphate company, OCP, has made significant strides in enhancing food security in Africa through its investment in fertiliser production plants.

In a move that surprised observers worldwide, Morocco returned to the African Union (AU) in January 2017 after a 33-year hiatus. Since then, the Kingdom has been remarkably active within the organisation, working towards harmonising African interests and enhancing regional integration. This move has been emblematic of Morocco’s belief in the power of collective action and its commitment to Africa’s socio-economic development.

In a speech delivered in Abidjan, Côte d’Ivoire in 2014, King Mohammed VI made a statement that encapsulates Morocco’s approach towards Africa.

He stated, “Africa must trust Africa.”

This quote underscores the Kingdom’s belief in the potential of African countries to drive their own development, echoing a sentiment of solidarity and mutual trust.

Thus, the ethos behind Morocco’s focus on Africa is more than just a diplomatic strategy—it is a realisation of a shared destiny. It’s a testament to the Kingdom’s understanding of the importance of intra-continental cooperation for the prosperity of Africa.

As such, Morocco’s engagement with Africa forms a significant component

Meanwhile, the country’s airports saw over 25 million passengers in 2022, testament to Morocco’s increasing connectivity. The high-speed railway network, with the TGV line connecting Tangier to Casablanca, has redefined travel in the country. On the digital front, Internet connectivity has surged, with the penetration rate reaching 74% in 2022.

A significant pillar of Morocco’s economic progress is its burgeoning industrial sector. The country has developed into a crucial industrial base in the Mediterranean, driven by dynamic sectors like the automotive industry. In a significant economic shift, the automotive sector, led by giants like Renault and Peugeot, now outpaces phosphates, traditionally Morocco’s main export. In 2022, automotive exports totalled $10.2 billion, accounting for 24% of Morocco’s total exports.

of the new geopolitics of Morocco, a chapter in the Kingdom’s history that is as much about fostering connections as it is about forging a future.

Morocco’s economics at a turning point The Kingdom of Morocco, a country steeped in history and rich in culture, has over the past decades developed into a vibrant and dynamic economy. With a Gross Domestic Product (GDP) nearing $124 billion in 2022, a year-on-year growth rate of 4.3%, and a moderate inflation rate of 1.5%, Morocco showcases remarkable macroeconomic stability. The World Bank recently highlighted this progress, stating, “Morocco’s macroeconomic policies have fostered resilience and maintained macroeconomic stability.”

Mirroring the country’s economic growth is the rapid development of its infrastructure. The national highway network has expanded to more than 1800 kilometres, connecting major cities and regions. Morocco’s Tanger Med port, one of the largest in Africa, is a bustling hub facilitating trade between Africa, Europe, and beyond.

Simultaneously, the aeronautics industry has taken flight, with over 140 companies contributing about $1.5 billion to the economy in 2022.

The sectors of agro-industry, textiles, and renewable energy have also seen steady growth, contributing to the diversification of the Moroccan economy.

Morocco’s economic journey has been marked by strategic, massive investments. With the initiation of the Industrial Acceleration Plan 2014-2020 and its follow-up plan for 2021-2025, Morocco has channelled significant resources into developing industrial ecosystems, providing incentives for foreign investment, and improving vocational training. As a result, the Kingdom has attracted global companies and created jobs, paving the way for sustainable economic growth.

The tale of Morocco’s economic transformation is one of vision, determination, and resilience. By focusing on macroeconomic stability, infrastructural development, and industrial growth, the country has built a robust economy that continues to defy regional challenges. As Morocco stands on the brink of a new economic era, it remains firmly committed to its development journey, setting an example for economies worldwide.

Despite Morocco’s commendable progress, challenges remain. These hurdles not only underscore the complexities of an emerging economy but also guide the areas where the Kingdom must focus its energies to maintain its growth trajectory.

One of the principal challenges is the stark regional disparities in the Kingdom. While cities like Casablanca and Rabat enjoy robust growth, rural areas and smaller cities struggle with a slower pace of development. As per data from Morocco’s High Commission for Planning, poverty rates in rural regions remain significantly higher than in urban areas. Unemployment rates also vary, with rural areas often facing higher levels of joblessness.

Another issue is the level of national investment. Despite the generous inflow of foreign investment, domestic investment by Moroccans remains relatively low. In 2022, private domestic investment accounted for only around 30% of total investment in Morocco, pointing to the need for stronger initiatives to encourage national participation in the country’s economic journey.

The International Monetary Fund (IMF) aptly summed up these issues in a recent report, stating, “Despite Morocco’s impressive economic performance, the country needs to address the issue of regional disparities and boost domestic investment to fully realise its economic potential.”

Other challenges include a need for deeper structural reforms in areas such as governance, the labour market, and the education system. The public education system, for instance, requires improvements to match the skills of the workforce with the demands of the labour market.

Addressing these challenges is fundamental to ensuring Morocco’s economic momentum continues and that the benefits of growth are shared more equitably among its citizens.

By recognising these hurdles and addressing them head-on, Morocco has the potential to unlock its next phase of growth and ensure a prosperous future for all its citizens. europeanbusinessmagazine.com 29

Promising local initiatives are beginning to illuminate the path to a new generation of industrial projects in Morocco. A shining example is the ambitious endeavour of Neo Motors, a Moroccan company that showcased its first wholly Moroccan-made car in the spring of 2023.

Presented to His Majesty King Mohammed VI, this milestone not only heralds a new era in the Moroccan automotive industry, but it also underscores the potential of local companies to innovate and compete on the international stage. Neo Motors’ achievement signals a leap forward in Morocco’s domestic industrial capabilities, giving the country a glimpse of what is possible with investment, innovation, and determination.

This successful venture may inspire further local investments into Morocco’s manufacturing sector, driving the creation of high-value, technologically advanced industries. The emergence of the first Moroccan car could be the vanguard of an increasingly self-reliant and innovative domestic industrial landscape, adding a vibrant new dimension to Morocco’s thriving economy.

Social Challenges and Progress The rapid economic growth Morocco has enjoyed also brings into focus its social challenges. In tandem with the Kingdom’s strides in economic and infrastructural development, significant efforts are being made to address these social issues.

Despite a growing middle class, marked by an increase from 19% of the population in 2001 to nearly 33% in 2022, stark socio-economic disparities persist. The rural-urban divide continues to manifest in income inequalities and access to public services. The High Commission for Planning estimates the poverty rate at 4.8% nationally, with marked differences between urban (1.6%) and rural areas (7.5%).

In response, Morocco has enacted a series of reforms aimed at promoting social equity and reducing poverty. For instance, the launch of the National Initiative for Human Development (INDH) in 2005 marked a 30 europeanbusinessmagazine.com

significant shift in the Kingdom’s approach to social development.

The initiative, renewed in 2019 for another five years, aims to alleviate poverty, combat social exclusion, and enhance human capital.

Gender equality, another critical area, has seen significant strides, with reforms initiated under the personal leadership of King Mohammed VI. A pivotal moment was the 2004 reform of the family code, or Moudawana, enhancing women’s rights in marriage, divorce, and child custody.

More recently, Morocco’s parliament passed a law in 2018 criminalising violence against women, a significant step towards the protection of women’s rights.

Addressing the challenges in health, Morocco has launched an ambitious healthcare reform strategy, focusing on improving service delivery, strengthening health infrastructure, and expanding health coverage.

To this end, the Kingdom has been ramping up investment in the healthcare sector, with the health budget increasing by nearly 30% between 2018 and 2023.

A testament to the Kingdom’s commitment to healthcare is the thriving local pharmaceutical industry. The Moroccan pharmaceutical sector, the second largest in Africa, has a production value of over $1.7 billion in 2022, up from $1 billion in 2018. It meets around 70% of the country’s medicine needs and exports to over 15 African countries.

Furthermore, while Morocco still faces notable social challenges, the Kingdom’s commitment to addressing these issues is clear. Through comprehensive strategies, legislative reforms, and targeted investments, Morocco is making strides towards a more equitable and inclusive society. The road is long, but the Kingdom is steadily marching towards a future marked by social equity and improved quality of life for all its citizens.

With that regard, Morocco’s vibrant civil society plays an indispensable role in tackling social challenges and contributing to the country’s development. Civil society organisations (CSOs) work on a range of issues, including poverty reduction,

environmental conservation, women’s rights, and youth engagement, often working in tandem with governmental initiatives and filling gaps where necessary.

As of 2023, there are over 130,000 registered non-governmental organisations (NGOs) in Morocco, reflecting the diversity and strength of the civil society sector. Many of these NGOs focus specifically on poverty alleviation and development projects, delivering grassroots initiatives that are locally relevant and sustainable.

The Mohammed V Foundation for Solidarity, one of the country’s most prominent NGOs, has carried out extensive work in poverty reduction.

The foundation provides social assistance to vulnerable communities, supports income-generating activities, and has helped nearly 2.5 million Moroccans through its various projects in 2022 alone.

Microcredit organisations have also gained traction in Morocco. Al Amana,

for instance, is one of the leading microfinance institutions, granting over 400,000 microloans in 2022 and making a significant contribution to the fight against poverty.

Moreover, the digital transformation has boosted civil society, with online platforms enabling more significant fundraising, volunteer recruitment, and awareness campaigns.

The rise of social entrepreneurship is another encouraging trend, with young Moroccans leveraging innovation and business principles to solve social issues.

While civil society in Morocco faces its challenges, such as the need for greater transparency and capacity building, its contribution to the country’s development and the fight against poverty is undeniable. Civil society’s role in Morocco embodies the shared national effort towards a more equitable and prosperous future.

Morocco’s Security Strategy: Safeguarding the Kingdom and Beyond Morocco’s strategic approach to security is multifaceted, spanning counterterrorism, migration management, the promotion of moderate Islam, and international cooperation in stabilising the Sahel region.

Morocco’s achievements in counterterrorism are globally recognised. The Central Bureau of Judicial Investigations (BCIJ), established in 2015, is often referred to as Morocco’s FBI. Working closely with the General Directorate for Territorial Surveillance (DGST), the BCIJ has been at the forefront of numerous successful counterterrorism operations.

Between its inception and 2023, the BCIJ dismantled over 200 terror cells, arresting and prosecuting more than 3,000 individuals associated with various terrorist groups. The DGST, for its part, has been instrumental

in preventing terrorist attacks both domestically and internationally, sharing vital intelligence with European and other global security agencies.

Morocco’s strategic geographical position, acting as a bridge between Africa and Europe, has thrust it into a crucial role in managing migration.

The Kingdom has become the new “gatekeeper” for Europe, working closely with the European Union to manage and mitigate illegal migration.

In 2013, Morocco launched a new migration strategy, leading to the regularisation of nearly 50,000 undocumented migrants. The strategy was praised by the International Organization for Migration (IOM) as a model for other countries to follow.

Morocco’s commitment to promoting moderate Islam as a bulwark against radicalisation is a cornerstone of its security strategy. The country’s Mohammed VI Institute for the Training of Imams, established in 2015, has trained over 10,000 Imams and preachers from Africa and Europe in the principles of moderate Islam.

Morocco’s external intelligence agency, the General Directorate for Studies and Documentation (DGED), has been actively involved in stabilising the Sahel region. Collaborating with its African and European counterparts, the DGED shares intelligence, trains security forces, and supports capacity-building efforts to maintain peace in the region.

In short, Morocco’s comprehensive and proactive security strategy serves not only to safeguard the Kingdom’s own security but also contributes significantly to regional and international security efforts. The country’s approach, marked by its adaptability and commitment to cooperation, exemplifies Morocco’s place as a trusted and vital player in the global security arena.

But that tells only half the story. In the digital age, cybersecurity has become a critical aspect of national security, and Morocco has not been left behind in fortifying its defences against cyber threats. The Kingdom recognises the potential risks that cyber-attacks and cyber terrorism pose to national security, economic stability, and public europeanbusinessmagazine.com 31

safety, and it has accordingly developed a robust strategy to counter these threats.

At the helm of this strategy is the National Cybersecurity Agency (DGSSI), established to oversee the country’s cyber defence. The DGSSI coordinates national efforts to improve cyber resilience, protect critical infrastructures, and promote a safe digital environment for citizens and businesses alike. The agency works closely with all sectors of the government, as well as with private-sector entities, to safeguard Morocco’s cyberspace.

Among the significant achievements of the DGSSI is the development and implementation of a comprehensive National Cybersecurity Strategy. This strategy sets out a holistic framework for managing cyber risks and strengthening national cybersecurity capabilities. It involves continuous monitoring of the cyber landscape, early detection and management of cyber threats, as well as raising public awareness about safe cyber practices.

Another notable milestone is the creation of the National Computer Security Incident Response Team (ma-CERT), which serves as the first line of defence against cyber threats.

The ma-CERT works around the clock to detect, analyse, and respond to cybersecurity incidents, ensuring swift action to mitigate damage and prevent further threats.

In the realm of legislation, Morocco’s parliament has passed a law to combat cybercrime, providing a legal basis for prosecuting cybercriminals and protecting victims. This legislation, in combination with Morocco’s technical and strategic efforts, forms a robust defence against cyber threats.

Moreover, Morocco has shown a keen interest in international cooperation in the fight against cybercrime. The Kingdom is part of several international cybersecurity initiatives and platforms, contributing to and benefiting from global efforts to make cyberspace safer.

In sum, Morocco’s proactive approach to cybersecurity, underpinned by strategic planning, technical capabilities, legal measures, and international 32 europeanbusinessmagazine.com

cooperation, is a testament to the Kingdom’s commitment to protecting its digital frontier. By recognising and responding to the challenges of the digital age, Morocco is ensuring the security and prosperity of its citizens in an increasingly interconnected world.

As we delve deeper into the layers of Morocco’s strategic architecture, we find a compelling juxtaposition of traditional security measures and stateof-the-art technological defences.

This holistic approach demonstrates a recognition that the key to stability and growth lies not only in the present but also in preparing for the future.

Therefore, a keen focus on enhancing cybersecurity is an integral part of Morocco’s broader strategy to safeguard its sovereignty and prosperity.

The success in this realm further fortifies Morocco’s position on the global stage, with the Kingdom demonstrating its readiness to tackle both conventional and emerging challenges.

Now, let’s pivot our attention from the cyber realm back to the physical world and explore the nation’s commitment towards another crucial issue of our times: sustainable develop­ment.

Morocco’s Pathway to Sustainable Development: Green Energy and Environmental Stewardship The Kingdom of Morocco, well aware of the pressing urgency of climate change and environmental conservation, has been steadfast in its commitment to sustainable development.

Its proactive strategies in renewable energy and environmentally friendly measures stand as a beacon in a region grappling with a myriad of environmental challenges.

Morocco’s energy transition is central to its sustainable development vision.

A national energy strategy, launched in 2009, aimed to have 42% of the

country’s installed electrical power capacity from renewable sources by 2020, and it was not just a mere aspiration. According to the International Renewable Energy Agency (IRENA), Morocco exceeded this target, reaching 43% by the end of 2020. The Kingdom further plans to raise this figure to 52% by 2030, showcasing its ambition in the renewables sector.

Solar and wind energy have played significant roles in this energy transition. The Noor Ouarzazate complex, one of the world’s largest solar power facilities, has been a critical driver of this change. Upon full completion, the facility is expected to produce 580 megawatts of power, enough to provide electricity for over a million homes. Moreover, with a potential to generate 25,000 MW of wind power, Morocco has the second-highest wind energy potential in Africa.

In his speech at the 22nd Conference of the Parties to the UNFCCC (COP22) hosted in Marrakech in

2016, King Mohammed VI emphasised Morocco’s commitment to combating climate change: “Morocco is determined to continue to be a credible, proactive stakeholder in the pursuit of peace and progress. It is in this spirit that we are hosting COP22, turning it into a ‘COP of action’.”

Morocco’s dedication to environmental stewardiness extends beyond renewable energy. The country has been proactive in implementing policies to reduce plastic pollution, introducing a law in 2016 to ban the production, import, sale, and distribution of plastic bags. This step made Morocco one of the first countries in Africa to implement such a ban, demonstrating its leadership in environmental conservation.

Moreover, the country has initiated a green economy plan, dubbed the “Green Generation 2020-2030”, aiming to enhance the resilience and sustainability of its agricultural sector.

The plan prioritises environmentally friendly agricultural practices and seeks to improve water efficiency, thus coupling economic progress with environmental preservation.

Like in social sectors, civil society plays a pivotal role in Morocco’s sustainable development journey. This societal layer is actively involved in fostering environmental awareness, advocating for policy changes, and implementing grassroots initiatives that contribute to the country’s sustainability goals.

Central to Morocco’s environmental activism is the Mohammed VI Foundation for Environmental Protection. Led by Her Royal Highness Princess Lalla Hasnaa, King Mohammed VI’s sister, the foundation has been instrumental in advancing Morocco’s commitment to environmental conservation and sustainability at both national and international levels.

Established in 2001, the foundation has launched a plethora of initiatives focusing on environmental education, coastline preservation, air quality, sustainable tourism, and energy efficiency. It has been a vanguard in the effort to cultivate environmental consciousness among Moroccan citizens, particularly the younger generation.

One of the foundation’s flagship programs is the “Eco-Schools” program.

Launched in 2006, it is part of an international initiative dedicated to instilling environmental awareness in school children. As of 2023, the program has been implemented in more than 1,300 schools across Morocco, benefiting around 620,000 pupils.

The initiative seeks to inculcate sustainable practices from an early age and foster the next generation of environmental stewards.

In terms of coastal conservation, the foundation’s “Clean Beaches” program has significantly contributed to the preservation of Morocco’s 3,500 km-long coastline. This program has seen the adoption of over 100 beaches by various stakeholders, who have committed to maintaining their cleanliness and safety.

On the international stage, the foundation has actively participated in global discussions on climate change and environmental protection. Princess Lalla Hasnaa, as the foundation’s chairwoman, has represented Morocco in several international forums, including the United Nations Framework Convention on Climate Change (UNFCCC), where she championed the cause of environmental conservation.

Furthermore, in line with Morocco’s commitment to the Paris Agreement, the foundation has been instrumental in pushing for energy transition at a grassroots level. It has encouraged the use of energy-saving practices among households and has promoted the adoption of renewable energy sources, contributing significantly to Morocco’s carbon reduction targets.

Morocco’s journey towards sustainable development, marked by a balanced energy mix and proactive environmental policies, serves as a model for the region. The Kingdom’s endeavours exemplify that economic development and environmental sustainability are not mutually exclusive but are two sides of the same coin.

Morocco, under the enlightened leadership of King Mohammed VI, continues to prove that sustainable development is not just a desirable goal, but an achievable reality. europeanbusinessmagazine.com 33

Morocco’s Economic Flourish and its Trade Ties with Europe

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estled at the crossroads of Africa and Europe, Morocco is a place of ancient landscapes, rich history, and economic dynamism.

Over the years, this North African gem has emerged as a pivotal player in the world of international trade, particularly with its European neighbours. Here, we delve into Morocco’s remarkable journey from a nation of strategic importance to an economic powerhouse, exploring its import and

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export relations with Europe and how the country championed its commerce and geopolitical standings.

it from the continent. The country’s geographical poise acts as a natural shoulder between Africa and Europe, opening up exceptional trade opportunities.

For centuries, Morocco has been a strategic crossroad for commerce, attracting traders and merchants from Europe, the Middle East, and sub-Saharan Africa. This ancient tradition of trade has evolved into the contemporary economic powerhouse we see today, as Morocco strategically leverages its global position.

The Geopolitical Advantage:

The Beacon of Stability:

To understand Morocco’s economic heft, we must first consider its unique geographic location. Situated on the northwestern tip of Africa, Morocco is advantageously close to Europe, with the narrow Strait of Gibraltar separating

Morocco’s political stability, compared with many of its North African and Middle Eastern counterparts, has played a crucial role in fostering trust among European partners. Under the rule of King

Agriculture and Agri-Exports: Morocco’s vibrant agriculture sector has become a linchpin in its trade relations with Europe. The country’s strategic investments in modernising its agricultural practices, including irrigation systems and greenhouses, have propelled it to become one of the largest exporters of fruits and vegetables to Europe.

One recognisable example to note, is the Moroccan citrus industry. Its citrus fruits, known for their quality and taste, have become a staple in European markets. The EU-Morocco Association Agreement ensured preferential access for Moroccan citrus exports to Europe, making it a booming industry that has boosted Morocco’s agricultural exports significantly.

Renewable Energy and Green Exports:

Mohammed VI, Morocco has maintained a stable monarchy with gradual and engaging political reforms, ensuring a favourable environment for foreign investment.

The country has also been successful in countering threats from extremist groups, solidifying its image as a safe destination for trade and investment.

Such stability has attracted a plethora of European investors and businesses looking to tap into Morocco’s economic potential.

Free Trade Agreements: One of the key drivers behind Morocco’s economic success story is its proactive approach to international trade agreements. The country has diligently forged partnerships and free trade agreements

with European nations and regional blocs. The jewel in the crown of these agreements is the Association Agreement with the European Union (EU), which came into effect in 2000.

The Association Agreement with the EU has significantly facilitated the exchange of goods, services, and investments between Morocco and Europe. It has also encouraged European businesses to set up operations in Morocco, creating a win-win situation.

Moroccan exports, particularly agricultural products like citrus fruits, vegetables, and seafood, have found a ready market in Europe, while European companies have expanded their footprint in Morocco, creating jobs and contributing to the nation’s economic growth.

In recent years, Morocco has invested in renewable energy, particularly solar and wind power. The country’s ambitious renewable energy projects, such as the Noor Solar Complex, have caught the attention of European countries keen on reducing their carbon footprint.

Morocco’s position as a renewable energy leader in the region has led to exports of clean energy to Europe.

The undersea electricity cable, the Morocco-Spain Interconnection, is a testament to this. It connects Morocco’s renewable energy resources to the European grid, enabling the export of surplus electricity to Spain and beyond. This initiative not only uplifts Morocco’s exports but also aligns with Europe’s green energy objectives, bulking stronger ties.

Automotive Industry and Manufacturing: Another sector where Morocco has made a positive impact is the automotive industry. European automakers have established manufacturing plants in Morocco, attracted by its skilled workforce, strategic location, and supportive government policies. These plants produce vehicles not only for the domestic market but also for export to Europe and beyond. europeanbusinessmagazine.com 35

Renowned car manufacturers like Renault and Peugeot have set up operations in Morocco, making the country an important hub for automotive exports. The Moroccan government has also been proactive in accelerating growth in the automotive sector, creating incentives to attract more foreign investments.

Infrastructure Development: To further enhance its trade relations with Europe, Morocco has invested heavily in infrastructure development.

The country has modernised its ports, including the Tanger Med Port, which has become one of the largest ports in the Mediterranean region. This strategic port is a gateway for Moroccan exports to Europe, significantly reducing transit times and costs.

Additionally, Morocco has invested in a robust road and rail network, connecting its major industrial hubs with the ports. This infrastructure development has not only facilitated the movement of goods but has also attracted logistics and distribution companies to set up operations in the country, creating a seamless trade ecosystem with Europe.

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Challenges and Opportunities: While Morocco’s trade relations with Europe have thrived, challenges persist. One mentionable challenge is the fluctuation of commodity prices, particularly in the agricultural sector.

Morocco’s heavy reliance on agriculture renders it vulnerable to external factors such as weather conditions and global market fluctuations.

Another challenge, naturally, is competition within the European market. As Morocco’s exports to Europe grow, it faces competition from other countries seeking access to the same markets. For a country to maintain its competitive edge and avoid plateauing, continuous innovation, quality control, and marketing strategies are crucial.

Though, within the challenges opportunities arise. Morocco has recognised the need to diversify its export portfolio and expand its value-added industries. This means not only exporting raw materials but also finished products. By investing in research and development, technology, and skills development, Morocco can further enhance its position in the European market.

Morocco’s journey from a strategically located nation to an economic nation of importance with thriving European trade relations, is a testament to its vision, stability, and strategic investments. The country’s go-getter approach to international trade agreements, coupled with investments in key sectors such as agriculture, renewable energy, manufacturing, and infrastructure, has solidified its position as a decisive trade partner for Europe.

As Morocco continues to navigate the evolving global trade landscape, its future is punctuated with both challenges and opportunities. The nation’s ability to adapt, innovate, and diversify its exports will be key to sustaining and improving its trade relations with Europe in the years to come.

In the battleground of the global markets today, economic interdependence remains all-important. Morocco stands as an exemplar of how strategic partnerships, geographic advantage, and stability can transform a nation into an economic beacon; illuminating a path of prosperity for its people and its partners across the Mediterranean.

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europeanbusinessmagazine.com 37

MACHINES VERSUS MACHINES:

How cloud-powered AI could revolutionise digital fraud

By Ananth Gundabattula, co-Founder Darwinium

T

he UK has a fraud problem, which increasingly is being fuelled by AI. According to one estimate, Brits lost as much as £4 billion to scammers in 2022. Things are set to get worse still, as cyber-criminals tap the power of machine

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learning to outwit technology used by organisations to spot suspicious behaviour.

A great leap forward A rapid acceleration in the pace of technology innovation over the past few years has benefitted our society

and economy immeasurably. Much of this is built on cloud computing, which provides reasonably priced, on-demand compute power, enabling organisations to innovate at scale while streamlining their operations and enhancing business agility. But while it’s lowered the bar for legitimate users to access these

About Darwinium: Darwinium is a next-generation fraud platform and the world’s first customer protection platform that helps businesses understand trust and risk across full digital journeys, not simply at point-in-time interactions. What this means is that Darwinium can help businesses simplify risk decisions by aggregating vast amounts of data helping them to make more accurate risk decisions without having to first make sense of complex data or vast rulesets.

capabilities, it’s done the same for cyber-criminals. Nefarious individuals are using cloud infrastructure every day to scale their operations anonymously.

The next wave of innovation in fraud will come from cloud-powered AI – or more correctly, machine learning (ML). Leveraging the power of the cloud, new malign ML models offer the prospect of automating tasks that only humans could perform a few years ago. That’s bad news for us all.

Outwitting the machines The problem comes when ML models are applied to effectively circumvent

the defences built by companies to spot obvious fraud. Consider a typical fraud mitigation system in a retail setting. There may be a rule whereby transactions over £900 in certain geolocations are automatically flagged for secondary verification.

An ML tool could be programmed to work out through trial and error the point at which high-value transactions are inspected. Then the adversary need only ensure their fraudulent payments stay under £900 and are based in the right geolocation to avoid detection. What was once a time-consuming process becomes a simple matter of cloud-powered analytics.

Even sophisticated ML models can be probed and attacked for weaknesses by malicious AI. The combination of models increasingly becoming ‘blackbox’ and the necessity to be trained on data of previous attacks is a perfect recipe for having production decisioning that is vulnerable to exploitation when presented with a slightly different scenario. It only takes some targeted trial and improvement for malicious AI to learn those oversights and blind spots.

That’s not all. AI could also generate fake but compelling enough image data of a user’s face which might allow a transaction to proceed, as the checking computer assumes it to be a photo of a new user.

Or it could be trained with video/audio data in the public domain (e.g. clips posted to social media) to impersonate legitimate customers in authentication checks. Similarly, AI could be trained to mimic human behaviour such as mouse movements, to outwit

machines designed to spot signs of non-human activity in various transactions. It could even generate different combinations of stolen data to bypass validation checks – a compute intensive task which can be solved by using the public cloud.

What happens next?

Fraudsters often have the advantage. They have the element of surprise and the financial motivation to succeed. Yet fraud and risk teams can counter malicious AI by tweaking their own approaches. AI can be trained by the bad guys to mimic human behaviour more realistically.

But if it’s used in automated attacks, it will still need to be deployed like a bot, which can be detected by the right machines.

Businesses could use continuous journey tracking to thwart malicious AI. Because this approach captures intelligence across the entire session/user journey, there’s more opportunity to spot machine-generated anomalies. Flexible signal generation can also be a powerful tool in a security engineer’s arsenal. It could be used in the examples above to trigger image analysis as soon as an image is uploaded. Or to compare mouse movements across non-financial transaction pages with those where a financial transaction is being initiated.

The bottom line: we are just at the start of a new arms race in cybersecurity and fraud mitigation. Settle in for a bumpy ride. europeanbusinessmagazine.com 39

Ignore the hype and focus on the real benefits that AI in payments can bring By the time you read this you may be tired of hearing about ChatGPT the OpenAI chatbot application or even its rival Bard, the experimental conversational AI service that has been introduced

by Google. But whether or not these innovations have been overhyped, there’s no doubt that they are finding wide application across multiple use cases.

By Ralf Gladis, CEO, Computop

D

espite only being launched for public use at the end of November 2022, ChatGPT is already being used to create personalised, automated answers to customer inquiries across the eCommerce industry and marketing departments are relying on its language processing abilities to curate content for social media and online marketing campaigns. Students are also finding its capacity for crafting responses to their questions helpful when it comes to writing essays. Such is its popularity it attracted 13 million individual active users per day just two months after its launch.

ChatGPT is of course, the free, userfriendly frontend behind which sits complex technology known as generative AI. Generative AI is described by the World Economic Forum as ‘a category of AI algorithms that generate new outputs based on the data they have been trained on’. Like traditional AI, it uses neural networks that allow it to recognise patterns and make predictions, but generative AI also creates content in the form of images, text and audio. This significant progression means that in future we are likely to see the impact of generative AI across multiple industries, including payments.

Let’s have a look at how this might develop:

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Social commerce AI-enabled chatbots are already making their mark on social media platforms where they support sellers to deliver a vastly improved customer service that enables instant responses to customer inquiries. But there is no reason why these interactions couldn’t lead to transactions enabled through AI APIs. These could facilitate biometrics such as face recognition that, in turn, would connect to a payment mechanism such as ApplePay or GooglePay to complete the transaction. One thing that any merchant would have to ensure before using AI bots however, is that they behave well and are trained to be polite with customers at all times!

Customer support Companies that provide online or phone support to customers are already utilising AI to provide them with information about their customers to inform the conversation. Using generative AI, however, delivers information on a much wider range of topics and in much greater depth which would allow the AI to manage a bigger number of interactions freeing agents up to deal with more complex tasks. If customers then want to make a payment, as with social commerce, an AI user interface could use payment APIs that would enable payment through biometric authentication, or

through a series of ‘if this/then’ conditional rules.

Personal assistants It is also exciting to think about AI behind personal assistants like Alexa or Siri. If a customer wants Siri to book event tickets or a hotel it requires machine-to-machine interfaces to automatically process the booking and the payments for customers.

Obviously, there are many tasks that are given to a personal assistant and many hotels, ticket shops and retailers that consumers want to buy from.

Providing APIs to handle all of this is a task that would require less AI but a lot more in terms of global standardisation and hard programming work.

result from unbalanced training data leading to unfair judgement of skin colour, nationalities etc.

Easier checkout A frictionless checkout experience is the goal for all online retailers. This means that customers must be able to make payments quickly, securely and conveniently with minimal clicks.

They are reliant on payment service providers to facilitate this, and the sector is now competing on its ability to incorporate AI into user interfaces and experiences. AI will deliver relevant information that could make this even more efficient, analysing details such as the customer’s location, the device they are using, their most recent interactions with the retailer, and even the time of the day they are most likely to make a purchase. Such detailed data is not only invaluable to securing a smooth checkout but can provide merchants with the ability to deepen their personalisation strategies with customers moving forward.

Integrated payment

Improved efficiency AI is already having a significant impact on the payments industry by enabling a deeper understanding of customers and customer behaviour which is improving payments services. However, generative AI can take improvements a step further by processing more data at a faster rate which will help to provide real time insights, improve procedural efficiency and allow companies to meet regulatory compliance more easily.

Combatting fraud One of the biggest contributors to credit card fraud in recent years has been the growth in eCommerce ‘Card

Not Present’ transactions. Payment processors, like Computop, are already incorporating AI and machine learning to assess past data that can be used to help combat these fraud attempts.

However, because generative AI is about creating content based on existing data, in helping to manage fraud, it would be best used to help construct messages to customers or new fraud rules, or through machine learning models, assess the performance of these rules to identify if they are working and boosting performance. If an AI model can reliably filter out low risk fraud alerts, manual reviewing efforts can be reduced, saving organisations time and resource costs. However, the challenge for AI in fraud prevention is to avoid biased results that might

Digitalisation has meant that most organisations now use integrated payment systems to streamline the payment acceptance process and integrate automatic payment acceptance. This means that manual storage or the compilation of transaction data are no longer needed. Large language models will assist with collating and analysing payment data across multiple sources and locations, enabling organisations to find what they are looking for quickly and accurately.

In summary It is easy to get caught up in the hyperbole around AI tools like ChatGPT and Bard, or equally to dismiss them as a passing trend, but the technology that enables them has application far and wide. Generative AI is complex, but the way that companies can use it is not. A simple prompt, or set of prompts, is all that it requires to deliver a wealth of insight. What payment company wouldn’t want to take advantage of it? europeanbusinessmagazine.com 41

Digital is clearly the future

What can businesses learn about the UK’s digital future from the financial services sector?

It is vital for any business leader to look to the future and to anticipate how it may affect their company. Failure to do so has consequences for everyone involved; if sales or engagement fall then jobs are put at risk, market positions are lost and reputations suffer, perhaps irretrievably. Yet relatively few businesses take the time to really understand how they might deal with what’s on the horizon.

By Mike Kiely, Sales Director Financial Services, IDnow

T

he business world changes rapidly, so the assessment and plan for the future has to be almost constant. However, one of the continuing key factors in the conduct of business will be the reliance on digital. But looking towards the future, what does the average consumer feel about using their smartphone, tablet or computer to go about their daily lives? The FinServ community has

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always been at the forefront of innovation and it is an industry which has a reliable and steady finger on the pulse of current and anticipated consumer behaviour, as much of the business world at large is shaped by its transactions.

Recent research commissioned by IDnow has shown what UK banking customers want from their digital experience. The results of the survey are more broadly indicative of what consumers expect from a digital future in the UK.

Well over 60 per cent of 2,001 UK adults surveyed believe that digital banking processes – which in this case might encompass remote account opening, online banking options or an easy-to-use app – were either extremely important or important when it came to deciding which bank they should entrust with their money. More widely, the same attitude is likely to prevail in the experience of interacting with a business; digital is convenient, always-on and now so familiar in so many areas that the app or mobile-friendly website is frequently the first choice. An easyto-use digital presence is now one of the basics in practically all sectors.

The survey also found that limited opening hours, lengthy processes and having to physically attend a location were given as the top three annoyances with financial institutions.

There is no doubt that consumers in other sectors have similar gripes. If a consumer in any sector of UK business is faced with a process which takes a long time, it will frustrate them owing to the increased expectations of immediate gratification. It is here where digital processes have one of their distinct advantages.

Security first UK consumers are not naïve. They appreciate that while interacting online, particularly making purchases, is a favourable way of fulfilling their needs, it is not without its dangers.

This is amply highlighted by the fact that in 2022, the UK had the highest number of cybercrime victims per million users, as 4,783 fell victim to some form of attack.

Slightly more than half of IDnow’s survey respondents said that they had opened a bank account online and felt safe as they did so, which should act as an eye-opener for businesses; it is imperative that they show consumers that they take their digital safety seriously as they register to use their services.

Of the 47 per cent who said they did not feel safe, cybercrime and fraud were cited as the main reasons for

their unease. This opinion is not unjustified – in 2022, 88 per cent of all UK businesses experienced some form of data breach.

It does not matter if the business is a well-established name in its sector or if it was founded last week; whilst customers want digital, they also want to be safe. The responsibility for this rests with the business by putting in place the highest security standards.

These might include the installation and continual update of data protection software, the use of secure networks and data encryption. Multi-factor authentication and other methods of making sure that the customer is who they say they are, such as Know Your Customer (KYC) processes, may also be used. It’s important to educate consumers about how they can help themselves to keep their data safe too, both at the sign-up stage and via regular communications once they have onboarded.

However, this need for safety must also be balanced with a friction-free sign-up process. If registering to use a business’s services online is cumbersome or fraught with what the users see as unnecessary steps, they may simply lose interest and look elsewhere. 13 per cent of respondents to the survey had abandoned trying to register with a bank online at this stage. This is likely to transcend the business world too.

Traditional versus new kids on the block Financial institutions can be roughly categorised into traditional banks and their new, ‘challenger’ counterparts which predominantly exist online.

The same definition can be applied elsewhere in business as traditional names in retail, healthcare, hospitality or telecommunications now vie with newcomers, which have substantially different outlooks and strategies and usually follow a digital-first or digital-only approach.

Digital adoption plays a massive part in this and has only increased in the last two-and-a-half years, as what came about through necessity is now the standard. However, the

survey revealed that, for banking at least, the traditional model was still the favoured kind of institution with which to deal. Its hybrid appeal of the in-person balanced with the online showed that living life purely online is something that most of us aren’t quite ready for just yet.

These hybrid ways of working are a huge opportunity for the more traditional brands and businesses which are equipped with, and are prepared to embrace, the digital technologies that are rapidly becoming expected of them.

The age-old question Although recent digital use experienced the sharpest of increases out of sheer necessity, it is no surprise that widespread adoption was driven by the younger generation.

The survey showed that considerably more 18-to-55-year-olds were comfortable in registering to use a financial institution online than their fellow respondents aged over 55, with those in the latter category still preferring to visit a physical location to set up their accounts. For some of the older generation, there is still a need for the shop or office where a consumer can talk to an expert face-to-face.

Despite digital being a chief consideration of respondents aged 18-to24, the same age group are also the savviest when it comes to knowing that something in the onboarding process isn’t right and abandoning it. Friction-free onboarding is therefore a primary consideration for businesses if they want to attract and retain younger customers.

The key to unlocking potential Despite the physical world still being important to the majority of the over55 market and smaller segments of other age groups, it’s clear that digital is only going to continue its inexorable rise. Online safety is paramount to users of digital services and the research suggests they will have few qualms about halting their interaction with a brand if they feel that this safety is not guaranteed.

It’s therefore vital for businesses to get their digital strategies right – quickly. There is a world of opportunity waiting to be harnessed but only if consumers are given not only the tools to use digital quickly and efficiently but also safely. Investment in digital needs to focus on these core elements in order to provide a clear pathway to successful digital interactions for everyone. europeanbusinessmagazine.com 43

Companies to invest more in freelancers and tech skills but not in women in top consulting jobs

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omatch, the curated marketplace for independent consultants and industry experts in Europe, acquired by Malt in 2022, has revealed the findings of its new research on the trends that are set to impact the consulting industry over the next eight to ten years.

With input from almost 700 independent management consultants in the UK, Germany and France, the Consulting in 2030: An Industry on the Verge of Disruption report uncovers key findings including:

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• 66% of respondents think that consultants will increasingly choose to freelance over permanent employment in the next 8-10 years • 70% of independent consultants below the age of 35 agree that tech companies will beat consulting firms in the fight to recruit young talent.

• When asked if consulting firms will invest in and encourage young consultants to specialise earlier in their career, 73% working in

sustainability and 72% in digital and IT roles agree.

• When asked if women will occupy at least 50% of the partner positions at top-tier consulting firms in the next 8-10 years, 62% of respondents in the UK disagree due to lack of support to break down the barriers that women face in the workplace.

Comatch (a Malt Company) conducted the research in December 2022 to gain a snapshot of how changes including digitalisation, the

economic downturn and the global pandemic, have impacted the consulting industry, and what this might mean in the next eight to ten years.

Focus on Tech The report found that recent business school graduates are increasingly choosing to work for tech companies rather than consultancies, drawn to the innovative and fast-paced culture of the tech sector. What this might mean is that consulting firms will

continue to turn to experienced, specialised talent, particularly in niche areas, but they will also cast their nets wider to recruit young talent.

Equally, it won’t stop consulting firms from investing in and encouraging young consultants, particularly if their talents lie in areas such as CRM or data analytics, but they will be expected to choose a skillset quickly and master it.

The research does show that, due to the prevalence of remote work, companies need to develop formalised ways to foster learning and development. 84% of all respondents agree with this but, amongst those with a background in HR and organisation, a huge 94% anticipate investments in formal learning and development programmes will replace former on-thejob training opportunities.

Changing workplace When looking at the future of working environments for consultants, 90% of independent management consultants agree that project teams in the next decade will be more mixed, combining both internal employees and external talent such as freelancers.

The research also showed that strategy consulting teams will need to have

most of their members experienced in digital skills, such as data analysis and programming, to meet demands for talent to support ongoing digital transformation projects.

When it comes to their views on diversity, the research respondents’ view of the next eight to ten years was discouraging, particularly given global efforts to provide more equitable corporate environments. When asked whether they think that at least half of partner positions will be taken by women, 55% of respondents across all three markets disagreed. A significant proportion of women objected to this hypothesis, with 68% disagreeing compared to 52% of men.

“The report reveals both expected and very surprising findings, but this reflects the ongoing transformation of the consulting landscape,” commented Will Jones, Managing Director, UK & North America at Comatch (a Malt Company). “We’re experiencing the rapid, and much needed, evolution of the workplace brought about by the pandemic years. Our task to 2030 will be to keep pace with the ongoing shifts in the market and ensure our platform is agile enough to connect great consultants with the right clients to benefit from their expertise.”

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What it means to be an ethical hacker with Glenn Wilkinson

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n this exclusive interview, courtesy of the Cyber Security Speakers Agency, discover how to protect your business or organisation against hackers. Glenn Wilkinson (pictured ) is a world-renowned security expert with several years of experience as an ethical hacker, a role through which he helps businesses to strengthen their cyber defences. Discover what it means to be an ethical hacker in this exciting Q&A.

What does your role as an ethical hacker entail?

“So, essentially being an ethical hacker means that my clients, who range from banks to governments to small startups to big companies, they

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want me to help them secure their businesses, via their online presence or their physical security. From their staff to their servers, everything in between, anything that holds data or transmits data.

“The analogy I sometimes use is that it’s like hiring an ethical burglar and asking them to come and check your home security. Because generally, the mindset that a burglar has, or the mindset that a hacker has, is a bit more inquisitive than the person who sets up the security. So, the person who instals the home alarm, or possibly sets up security at a company, the way they think is sometimes a bit more defensive, a bit more mundane.

“As an ethical hacker, what largely drives you is curiosity. So, there’s this thing in front of you, this barrier that’s stopping you getting some interesting information, how can I go around the edge or dig underneath or climb over the top to try and get to that information?

“It’s often not as glamorous as you might see in the Hollywood way.

Generally, if I’m asked to test a bank’s security, it generally involves about four days of metaphorically banging your head against the wall, trying to find those weaknesses; maybe it’s an outdated server somewhere, maybe you can trick an employee to click an email link.

“If you think about an organisation, it’s like a piece of candy – it’s hard on the outside, soft and squishy in the middle. Once you crack the outside and get to the inside, then generally the data just pours out and very quickly, you get access to everything that’s precious to that organisation.”

How can businesses identify potential cyber weaknesses in their organisation?

“If you’re a business and you’re trying to identify cyber risks that might let criminals or hackers in your

organisation, there are all kinds of things that you can do. Generally, I would say there’s no silver bullet, there’s no one product or magic thing – no matter what vendors tell you – that will solve this.

“But, generally speaking, a layered approach is good for cybersecurity, for home security, for life. If you diversify what you’re doing, you stand a better chance if one system fails.

Experts might try and tell you things like segmenting the network, things like zero trust, making sure your software is up to date.

“There are all kinds of solutions these days, there’s lots and lots of little things you can do as an organisation.

Generally, that layered approach, that’s quite good. I’d say if you’re watching, listening or looking for two or three things that you should do, keep your software up to date. If there’s a vulnerability and your server software or your client-side software isn’t up to date, hackers can take advantage of it.

“Make sure to use password managers, because if you’re forcing your staff to remember 20 different passwords and change them every month, that doesn’t work out well for anyone except the hackers. If you only remember one password to unlock the password manager, that’s quite a secure approach. Make sure to pick

a good password for your one password.

“What I like to do is use these things called ‘canary tokens.’ Essentially, you embed a little bit of information in Word documents, Excel documents or PDFs, and you leave these files lying around like trip wires. So, it’s kind of like leaving confidential files at home, a piece of paper that says, ‘top secret,’ and you put a little vial of ink next to it so if someone picks it up, the ink spills.

Then you’ll know that someone’s been there.”

This exclusive interview with Glenn Wilkinson was conducted by Mark Matthews. europeanbusinessmagazine.com 47

Embracing ‘Digital Sobriety’:

The Net Zero Transformation of Energy -Thirsty Data Centers

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n an era defined by exponential technological advancement, data has emerged as the lifeblood of our global economy. The proliferation of digital services and the rise of cloud computing have fueled the exponential growth of data centers worldwide. However, this digital revolution comes at a cost, as data centers have become notorious energy consumers, contributing significantly to carbon emissions. In the pursuit of achieving net-zero emissions, the concept of ‘digital sobriety’ has emerged, calling for a transformation in the way we design and operate energy-thirsty data centers. European Business Magazine explores the imperative for embracing digital sobriety and the profound implications it holds for the net-zero transformation of data centers.

The Energy Challenge: Data Centers’ Carbon Footprint Data centers have rapidly evolved into the backbone of our digital infrastructure. These colossal facilities house an ever-increasing number of servers, storage systems, and network equipment, all of which require substantial amounts of energy to operate and cool. According to recent studies, data centers consume around 200 terawatt-hours (TWh) of electricity annually, equivalent to 1% of global energy consumption. This voracious appetite for power not only strains energy grids but also contributes to carbon emissions, making data centers a significant environmental concern.

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The Concept of Digital Sobriety Digital sobriety represents a paradigm shift in the way we approach data center design and operations. It advocates for reducing energy consumption while still delivering reliable and efficient digital services. This approach emphasizes optimizing energy efficiency, embracing renewable energy sources, and implementing advanced cooling techniques.

By adopting digital sobriety principles, data centers can significantly reduce their carbon footprint and pave the way for a sustainable future.

Optimizing Energy Efficiency Efficiency lies at the heart of digital sobriety. Data centers can achieve substantial energy savings through measures such as virtualization, which allows multiple applications to run on a single server, thereby reducing the overall energy requirements. Additionally, improving server utilization rates and employing energy-efficient hardware can further enhance efficiency. By prioritizing these optimization strategies, data centers can achieve significant reductions in energy consumption without compromising performance.

Embracing Renewable Energy Sources Transitioning to renewable energy sources is a key pillar of digital sobriety. Data centers can embrace solar, wind, and hydroelectric power to minimize their reliance on fossil fuels. By investing in onsite renewable energy generation and partnering with local

utilities to procure green energy, data centers can significantly reduce their carbon emissions. Furthermore, exploring innovative approaches such as power purchase agreements with renewable energy providers can ensure a reliable and sustainable energy supply for data centers.

Innovative Cooling Techniques The cooling systems of data centers represent a substantial portion of their

energy consumption. Adopting innovative cooling techniques can contribute to significant energy savings. For instance, utilizing outside air for cooling in colder climates can eliminate the need for energy-intensive traditional cooling systems. Advanced cooling technologies, such as liquid cooling and direct chip-level cooling, also hold promise in improving energy efficiency. By prioritizing these cooling innovations, data centers can strike a balance between sustainability and optimal performance.

Economic Opportunities and Challenges Embracing digital sobriety not only aligns data centers with environmental objectives but also presents substantial economic opportunities.

The demand for sustainable data services is rising, and data centers that successfully achieve net-zero emissions can differentiate themselves in a competitive market. Additionally, as governments and regulators focus

on carbon reduction, data centers that proactively adopt digital sobriety principles can benefit from incentives, tax breaks, and favorable regulatory frameworks. However, the transition to digital sobriety is not without challenges. The upfront costs of implementing energy-efficient infrastructure and renewable energy sources may pose financial hurdles. Nonetheless, the long-term cost savings and positive brand reputation associated.

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Navigating the Cyber-Risks of Generative AI:

Safely Harnessing its Potential

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s generative artificial intelligence (AI) continues to advance, it holds immense potential for transforming various industries, from art and entertainment to healthcare and engineering. However, with this transformative power comes a new set of challenges. The rise

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of generative AI introduces significant cyber-risks that demand our attention and proactive measures to ensure safe and responsible use. European Business Magazine will explore the potential cyber-risks posed by generative AI and delve into strategies for harnessing its power safely.

Understanding Generative AI and its Risks Generative AI refers to a subset of AI that involves machines generating content such as images, text, or even entire scenarios based on patterns and examples. While the possibilities

are exciting, there are inherent risks associated with the misuse or malicious exploitation of generative AI technology. These risks include: • Deepfake Threats: Generative AI can be employed to create hyper-realistic, manipulated videos or images, known as deepfakes. These fabricated media can be used for disinformation campaigns, extortion, or even to impersonate individuals, causing reputational damage or compromising sensitive information.

• Fake Content Propagation: Generative AI enables the rapid

generation of large volumes of content, including fake news articles, reviews, or social media posts. These fabricated pieces of information can fuel misinformation and deceive users, influencing public opinion or manipulating financial markets.

• Exploitation of Biometric Data: Generative AI can generate synthetic biometric data, such as fingerprints or facial features, which can be misused to bypass security systems or gain unauthorized access to sensitive areas or personal accounts.

• Evasion of Security Systems: Cybercriminals can leverage generative AI to develop advanced techniques that evade traditional security measures, making it challenging to detect and respond to malicious activities effectively.

• Intellectual Property Infringement: The ease of generating content through generative AI raises concerns about copyright infringement and the protection of intellectual property. Creators may face challenges in safeguarding their original work from unauthorized reproduction or distribution.

Safely Harnessing Generative AI Despite these risks, it is crucial to recognize that generative AI also offers immense benefits. To ensure safe and

responsible use, the following strategies can be implemented: • Robust Data Governance: Establishing comprehensive data governance frameworks is crucial to mitigate risks associated with generative AI. This includes ensuring the ethical collection and usage of training data, safeguarding privacy, and establishing strict access controls to prevent unauthorized use of sensitive data.

• Transparent and Explainable AI: Developers should focus on creating generative AI models that are transparent and explainable.

Understanding how the AI system generates content can aid in identifying potential biases, vulnerabilities, or malicious patterns.

By providing transparency, users can make informed decisions and assess the authenticity of generated content.

• Rigorous Verification and Validation: Implementing robust verification and validation processes can help identify and prevent the spread of deepfakes or fake content. Utilizing advanced techniques such as watermarking, digital signatures, or blockchain technology can enable content authenticity verification, protecting against malicious manipulations.

• Strengthened Cybersecurity Measures: It is crucial to enhance cybersecurity measures to protect against emerging threats posed by generative AI. This includes employing advanced anomaly detection systems, implementing multi-factor authentication, and continuously updating security protocols to counter evolving cyber-attacks.

• Collaboration and Regulation: Addressing the challenges posed by generative AI requires collaboration among industry stakeholders, policymakers, and researchers. Establishing regulatory frameworks that ensure the responsible use of generative AI, while promoting innovation, can help create a safe and trusted environment for its deployment.

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How AI is disrupting the workplace Martin Spring, Professor of Operations Management, Lancaster University

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rtificial intelligence (AI) is often cast as wreaking havoc and destroying jobs in reports about its growing use by companies.

The recent coverage of telecom group BT’s plans to reduce its number of employees is a case in point.

However, while it is AI that is featured in the headlines, in this case, it is the shift from copper to optical fibre in the BT network that is the real story.

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When I was a boy, workers for the GPO – the General Post Office, the forerunner of BT – were regular customers in my parents’ newsagent’s shop. They drove around in lorries erecting telegraph poles and repairing overhead telephone wires. Times – and technologies – have changed, and continue to change. BT’s transition from copper to optical fibre is simply the latest technology transition.

This move by BT has required a big, one-off effort, which is coming to

an end, along with the jobs it created. And because fibre is more reliable, there is less need for a workforce of fitters in the field carrying out repairs.

This will change the shape of BT as an operation: rather than an organisation of people in vans, it will have a network designers and managers who, for the most part, can monitor equipment in the field remotely.

This is happening in other sectors too. Rolls-Royce aircraft engines are monitored as they are flying from an

James Faulconbridge and Atif Sarwar, AI-based technologies very rarely simply do things quicker and cheaper.

Rather, they automate some tasks, but their analytical capabilities also provide extra insights into clients’ problems.

Better advice, new jobs A law firm might use a document review package to search for problem clauses in hundreds of leases, for example. It can then use the overall pattern of what is found as a basis for advising a client on managing their property portfolio better.

How AI is disrupting the workplace Similarly, in auditing, AI technologies can automate the task of finding suspicious transactions among thousands of entries, but also generate insights that help the client to understand their risks and plan their cashflow more effectively.

In these ways, the technology can allow law and accountancy firms to offer additional advisory services to clients.

AI adoption also creates new types of jobs, such as engineers and data scientists in law firms.

office in Derby. The photocopier in your office – if you still have an office (or a photocopier for that matter) – is probably also monitored automatically by the supplier, without a technician going anywhere near it.

AI ‘co-piloting’ AI may contribute in part to the reduction in customer service jobs at BT by being able to speed up and support relatively routine tasks, such as screening calls or writing letters and emails to customers.

But this typically does not take the form of a “robot” replacing a worker by taking over their entire job. It is more a case of AI technologies helping human workers – acting as “co-pilots” – to be more productive in certain tasks.

This eventually reduces the overall number of staff required. And, in the BT story, AI is only mentioned in respect of one-fifth of the jobs to be cut, and even then, only as one of the reasons.

In my own research among law and accountancy firms with my colleagues

Recent advances in generative AI – which create text or images in response to prompts, with ChatGPT and GPT 4 being the most obvious examples – do present new possibilities and concerns. There is no doubt that they exhibit some potentially new capabilities and even, for some, “sparks” of artificial general intelligence.

These technologies will affect work and change some kinds of jobs. But they are not the main culprit in the BT case, and researchers and journalists alike need to keep a cool head and examine the evidence in each case.

We should strive to act responsibly when innovating with AI, as with any other technology. But also: beware the knee-jerk, sensationalist response to the use of AI in work. europeanbusinessmagazine.com 53

Ignore the hype and focus on the real benefits that AI in payments can bring

By Ralf Gladis, CEO, Computop

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y the time you read this you may be tired of hearing about ChatGPT the OpenAI chatbot application or even its rival Bard, the experimental conversational AI service that has been introduced by Google. But whether or not these innovations have been over-hyped, there’s no doubt that they are finding wide application across multiple use cases.

Despite only being launched for public use at the end of November 2022, ChatGPT is already being used to create personalised, automated answers to customer inquiries across the eCommerce industry and marketing departments are relying on its language processing abilities to curate content for social media and online marketing campaigns. Students are also finding its capacity for crafting responses to their questions helpful when it comes to writing essays. Such is its popularity it attracted 13 million individual active users per day just two months after its launch.

ChatGPT is of course, the free, userfriendly frontend behind which sits complex technology known as generative AI. Generative AI is described by the World Economic Forum as ‘a category of AI algorithms that generate new outputs based on the data they have been trained on’. Like traditional AI, it uses neural networks that allow it to recognise patterns and make predictions, but generative AI also creates content in the form of images, text and audio. This significant progression means that in future we are likely to see the impact of generative AI across multiple industries, including payments.

Let’s have a look at how this might develop:

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Social commerce AI-enabled chatbots are already making their mark on social media platforms where they support sellers to deliver a vastly improved customer service that enables instant responses to customer inquiries. But there is no reason why these interactions couldn’t lead to transactions enabled through AI APIs. These could facilitate biometrics such as face recognition that, in turn, would connect to a payment mechanism such as ApplePay or GooglePay to complete the transaction. One thing that any merchant would have to ensure before using AI bots however, is that they behave well and are trained to be polite with customers at all times!

Customer support Companies that provide online or phone support to customers are

already utilising AI to provide them with information about their customers to inform the conversation. Using generative AI, however, delivers information on a much wider range of topics and in much greater depth which would allow the AI to manage a bigger number of interactions freeing agents up to deal with more complex tasks. If customers then want to make a payment, as with social commerce, an AI user interface could use payment APIs that would enable payment through biometric authentication, or through a series of ‘if this/ then’ conditional rules.

Personal assistants It is also exciting to think about AI behind personal assistants like Alexa or Siri. If a customer wants Siri to book event tickets or a hotel it requires machine-to-machine interfaces to automatically process the

result from unbalanced training data leading to unfair judgement of skin colour, nationalities etc.

Easier checkout A frictionless checkout experience is the goal for all online retailers. This means that customers must be able to make payments quickly, securely and conveniently with minimal clicks.

They are reliant on payment service providers to facilitate this, and the sector is now competing on its ability to incorporate AI into user interfaces and experiences. AI will deliver relevant information that could make this even more efficient, analysing details such as the customer’s location, the device they are using, their most recent interactions with the retailer, and even the time of the day they are most likely to make a purchase. Such detailed data is not only invaluable to securing a smooth checkout but can provide merchants with the ability to deepen their personalisation strategies with customers moving forward.

Integrated payment

booking and the payments for customers. Obviously, there are many tasks that are given to a personal assistant and many hotels, ticket shops and retailers that consumers want to buy from. Providing APIs to handle all of this is a task that would require less AI but a lot more in terms of global standardisation and hard programming work.

Improved efficiency AI is already having a significant impact on the payments industry by enabling a deeper understanding of customers and customer behaviour which is improving payments services. However, generative AI can take improvements a step further by processing more data at a faster rate which will help to provide real time insights, improve procedural efficiency and allow companies to meet regulatory compliance more easily.

Combatting fraud One of the biggest contributors to credit card fraud in recent years has been the growth in eCommerce ‘Card Not Present’ transactions. Payment processors, like Computop, are already incorporating AI and machine learning to assess past data that can be used to help combat these fraud attempts.

However, because generative AI is about creating content based on existing data, in helping to manage fraud, it would be best used to help construct messages to customers or new fraud rules, or through machine learning models, assess the performance of these rules to identify if they are working and boosting performance. If an AI model can reliably filter out low risk fraud alerts, manual reviewing efforts can be reduced, saving organisations time and resource costs. However, the challenge for AI in fraud prevention is to avoid biased results that might

Digitalisation has meant that most organisations now use integrated payment systems to streamline the payment acceptance process and integrate automatic payment acceptance. This means that manual storage or the compilation of transaction data are no longer needed. Large language models will assist with collating and analysing payment data across multiple sources and locations, enabling organisations to find what they are looking for quickly and accurately.

In summary It is easy to get caught up in the hyperbole around AI tools like ChatGPT and Bard, or equally to dismiss them as a passing trend, but the technology that enables them has application far and wide. Generative AI is complex, but the way that companies can use it is not. A simple prompt, or set of prompts, is all that it requires to deliver a wealth of insight. What payment company wouldn’t want to take advantage of it? europeanbusinessmagazine.com 55

Geo-political investing, I intermediaries and surging forward in 2023

nvestment leads, whether they’re VCs or intermediaries, can use this challenging time right now to expedite their process of elimination for the next brilliant Founders to invest and believe in and Founders, if they’re tenacious and confident can use this time to surge forwards.

Jeb Buckler, CEO of Startup Giants PLC discusses how VCs and intermediaries can actually use these uncertain times to narrow their focus and source the Founders with the mettle to keep going in the face of all odds in new investment times…

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The good element about tough times is that they always shine a light on the tough people - in business, this means that the highly motivated, tenacious and adaptable Founders will not only survive, they’ll thrive.

Predicting the mindset of new Founders is usually a tough challenge,

them to open them and to ensure that if they do spend, they spend it with you.

Investment spending is no different.

Investors are being cautious right now until market valuations are stronger so if a Founder presents themselves with strong letters of intent or sales already for their tech concept, it’s going to make a much stronger statement to potential investors in this climate that people want, need and are prepared to pay for their product or service. I’d say even more so than usual give the overly cautious with budget nature of the current climate.

In terms of investing in startups, valuations are generally lower at the moment which poses better deals for investors. I think to get the investment over the line some of the investors are quite content to see that the founders are growing slightly less aggressively and experiencing growth in a safer, more sustainable way. If the company’s revenue is more consistent and the growth is stable then they view the company as healthy. Once again, management of cashflow and a Founder’s mindset is essential to build trust for investment.

Both investors and Founders can benefit from the mass layoffs

however, I believe it’s actually easier in uncertain times as the investor can see the Founder’s attitude to change and adapting to new circumstances.

Founder evidence carries more weight in a recession As Gary Vaynerchuck once famously said: ‘The most important thing in a recession, is money in the bank.’ People and businesses analyse their spending and tighten up their purse strings to survive a recession. Therefore the marketing, mission and messaging needs to work twice as hard to get

On the flip side this mass layoff actually helps another crisis - the skills shortage. This is actually a very positive and key time for people looking to recruit techies that they might not have had access to without the layoffs.

Also, as we saw from the last recession, a number of techies that had been laid off used the opportunity to create their own businesses - Netflix and Air BnB to name a few - without having the constraints of full time work and board members’ vetoing concepts.

Whilst people may be grappling with layoffs, it might be a good time for Founders to recruit and think of out of the box ways to attract the techie talent to their door. For example: if they can’t afford the top dollar wages and bonuses, perhaps offer a a lesser salary with equity in the business in exchange for key deliverables or milestones to be met. Having a key techie in place within the business, shows belief in the

concept and is extra brownie points when it comes to investment rounds as it’s more proof that the Founder can do what they promise.

Is AI the main way forwards for 2023?

The sector that I think is going to be really big in 2023 is openAI. The likes of Dall-e and ChatGPT have taken the internet by storm and with Microsoft investing billions into the concepts, I think it’s going to change the way that people create imagery and content. Moving forwards, open AI is really going to propel the largest shift in tech that we’ve seen in a while because building AI into a tech concept or the future of one, is a good way to stay relevant.

It’s all about adapting for the future and changing to the requirements of the economy With the state of the world at the moment, the days of investing in one singular country are over. Geo-political investing is the way forward to mitigate the risk across multiple countries and continents in order to rally against potential lockdowns, wars and inflations.

Everyone in business has to adapt though and of course we’re no exception. As the search for true and tested Founders continues we’ve adapted how we source and present Founders to investors with the release of our global Atlas Partner Programme and app. Now our tech venture partners around the world, can upload their tech founders to our selection process and if they pass then they’re put forward for demo days and inclusion on our app which is seen by investment leads.

Everyone is looking for qualified deals, quickly, we knew ourselves that we’d have to adapt to push forwards and we’re excited to see where this goes.

I2023 will be the year for intermediaries to really push forward again because they will have the opportunity to take many more concepts at the earlier stage over to their investors and maintain deal flow on a geo-political, global basis. europeanbusinessmagazine.com 57

The human issue with risk management

By Yasser Khan, Director of Programme Management, at Lexica

I

naccurate forecasting in the programme and project management environment is perhaps the key risk that tends to end up causing the most problems. The larger and more complex the programme of works, the greater the likelihood that the forecasting will be inaccurate – and the greater the downside impact will be of that inaccuracy.

It’s certainly true to say that each project and each programme will have its own specific set of circumstances and there will be myriad reasons why a specific initiative hasn’t performed as forecasted.

It is also, however, true to say that there are patterns and trends that can be looked for and identified. All initiatives are unique, but all initiatives are also the same. If we try to take this more paradigmatic view of projects, project risk and risk forecasting, what do we see?

There are certainly examples in our experience of the health sector of organisations undertaking initiatives with insufficient attention paid to forecasting and risk management. In a sector that is all about prevention and treatment of, often, life threatening conditions, risk should always be at the heart of every initiative.

Cost overruns are caused primarily by cost underestimation, not scope changes. Design errors, change orders, poor site management and not hiring the right team can all be factors, but they are factors that we see occurring time and again – and therefore can be factored into any forecasting.

Hazel Bvuma, Risk Manager at Lexica, says: “We see many of the same issues time and again on the programmes of work we manage – and our experience means we know where to look for risk.”

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Research suggests that there are typically three explanations for underestimation of risk:

Technical The issue here is about insufficient data and poor modelling techniques.

The quality and capability of risk management software has increased exponentially over recent years. Yet these improvements appear not to have been matched by a corresponding improvement in forecasting accuracy.

Software capacity is constantly improving, but the outputs of the software rely, ultimately, on human input.

Optimism bias The HM Treasury Green Book defines optimism bias as “the proven tendency for appraisers to be optimistically biased about key project parameters, including capital costs and

operating costs, project duration, and resulting benefits delivery.”

Essentially, optimism bias is the psychological phenomenon where we have a tendency to look on the bright side of life. It is a natural human phenomenon. And although there does appear to be variation in different cultures, research suggests that we all have this bias.

Zen Marolia, Risk Consultant at Lexica, adds: “We manage optimism bias by trying to quantify the risk utilising Monte Carlo simulations, hence reducing the need to hold large quantities of contingency under the optimism bias umbrella.”

Bias can be addressed in several ways, such as: • Reviewing forecasts for over optimism • Applying quality control on a proposal • Soliciting dissenting views during the estimating process

• Developing a culture of openness around conversations related to risk

Strategic misrepresentation Strategic misrepresentation is “the tendency to deliberately and systematically distort or misstate information for strategic purposes”, essentially telling untruths in response to incentives. 1 The idea is beautifully illustrated by this revealing quote from the Mayor of San Francisco, Willie Brown, discussing a large cost overrun on the San Francisco Transbay Terminal megaproject in his San Francisco Chronicle column (from 2013): “News that the Transbay Terminal is something like $300 million over budget should not come as a shock 1 https://medium.com/geekculture/strategic-misrepresentation-the-blind-spot-in-behavioral-economics-8896b078d2c4

to anyone. We always knew the initial estimate was way under the real cost. Just like we never had a real cost for the [San Francisco] Central Subway or the [San Francisco–Oakland] Bay Bridge or any other massive construction project. So, get off it. In the world of civic projects, the first budget is really just a down payment. If people knew the real cost from the start, nothing would ever be approved. The idea is to get going. Start digging a hole and make it so big, there’s no alternative to coming up with the money to fill it in.” 2 Strategic misrepresentation, to some degree, might be addressed through the use of reference class forecasting, as a structured way of trying to predict the future of a project by analysing previous similar projects and their outcomes.

In the final analysis, there needs to be an understanding and agreement

2 https://papers.ssrn.com/sol3/papers. cfm?abstract_id=2424835

around how much risk an organisation is prepared to live with, and how much contingency.

Most important project decisions involve risk taking, and we need to be able to answer questions starting with “how”. These questions include: • How much risk do we want to take? What is the risk appetite in the organisation?

• How much risk are we taking right now?

• How much risk will we eventually take?

• How do we manage risk?

• How can we maximise gains without incurring losses?

• How much contingency should we maintain?

One of the key aims of any organisation is to maximise stakeholder value.

The way in which risk is managed is always going to be a critical part of that critical conversation. europeanbusinessmagazine.com 59

Reinforcing Trusted Advisor Status through Technology Innovation Unlocking your status

B

usiness owners have always relied on their accountants to be their ‘go-to’ for support, advice and help - to be looked after by them. Simply put, accountants are the trusted advisor to their clients and an integral part of their operation. Good accountants will firmly embed themselves into their clients’ businesses, providing comfort that they have an advisor who understands and supports their goals, removes unnecessary hassle from red tape and generally keeps them on track.

That said, there are pockets of service delivery, such as Research and Development (R&D) Tax Claims, that some clients still have to access through third parties because their accountants have not been able to unlock the capability to offer this service in-house – and this can potentially create business risk. Whether clients opt to work with another accountancy

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firm or a dedicated R&D Tax Claims consultancy, there is a chance that the accountant could be left picking up the pieces if the claim has been mishandled or worse still, they could lose the relationship to a full-service firm.

With recent research from WhisperClaims reaffirming that accountancy firms are increasingly driven by maximising efficiency, upholding best practice and being recognised as a credible professional by their clients, it is more important than ever to be able to provide a holistic, end-to-end client portfolio – and that includes R&D Tax advice.

Mike Dean, Managing Director of WhisperClaims, explains: “Dedicated cloud-based R&D Tax Claims technology, with training and support on tap, provides accountants with the ability to build and maintain strong client relationships and reinforce their trusted advisor status.”

Accountants that have embraced the trusted advisor role understand how important it is to ensure their clients get the best advice and support at every step, but that is hard to control or guarantee when any aspect of the service is outsourced.

How can an accountant sign off on a tax return when they have not been involved in the preparation of the R&D Tax Claim? Anyone can call themselves an R&D Tax specialist yet have no accounting background or tax qualifications - and importantly they will not be subject to the same level of regulatory scrutiny as certified accountants.

Given the potential risks associated with outsourcing, many accountants are therefore looking to extend the depth and breadth of their service offering – and R&D Tax advice is becoming an increasingly important part of the overall service portfolio. Research carried out by WhisperClaims confirms that accountancy firms’ primary motive for providing R&D Tax advice is based around their role as a trusted advisor to their clients.

The research revealed that firms want to be able to manage the end-to-end process without handing over responsibility to a third party; and while the additional revenue stream is obviously welcome, this outcome carries far less weight than the client satisfaction accountants want to be able to offer.

For firms to be able to deliver a complete service portfolio for clients, it is vital to establish an efficient, cost-effective and reliable approach to preparing R&D Tax Claims. Just as technology has transformed every other aspect of the accountant’s role over the past decade, dedicated R&D Tax Claims software can empower accountants with a framework and structure that enables them to deliver a high quality service that is robust, compliant, and repeatable.

Embracing technology SaaS technology, such as some R&D tax software, provides a financially scalable model to support accountants with variable levels of client demand for R&D tax claims preparation. It provides the foundation for a process designed to be used by qualified accountants with a strong understanding of their clients’ businesses and a fundamental understanding of the guidance and what qualifying work looks like.

Deploying technology to support R&D tax service delivery in this way not only facilitates easy collaboration between accountant and client, it also makes data easy to analyse, allowing accountants to demonstrate the viability and worth of a potential claim with confidence and reassurance that the work being put forward meets HMRC expectations. Access to training and expertise alongside the technology enables accountants to build up experience and extend their trusted advisor status.

The other huge benefit of dedicated SaaS R&D tax software is the continual evolution of the technology to keep users within the boundaries of the scheme and up to date with the changes being introduced by HMRC. From risk mitigation measures to the offer of optional claim reviews prior to submission, technology provides robust support to give accountants additional confidence. It should also support the more comprehensive sign off process between client and accountant demanded by HMRC from April 2023, ensuring the name and signature of both the advisor and a senior officer from the client are included in the claim.

Build confidence, access support, mitigate risk For many accountants it is unlikely that a significant proportion of their client base will be engaging in qualifying R&D activity and therefore may find they are dipping in and out of the process only a handful of times per year. As such, it is really important that the individual(s) responsible for preparing claims have access not

only to technology but also support, even if that is just a sounding board for advice and guidance.

HMRC’s R&D Tax Claim information can be opaque in places, and the ability for an individual to tap into the knowledge and experience of a team that has been involved with thousands of successful claims is hugely valuable. The best R&D tax software on the market is designed by R&D tax experts with hands-on experience of R&D tax consultancy and a solid understanding of the scheme.

Critically, by producing a high-quality output every time an accountant uses such dedicated technology, they can be confident that they are minimising the likelihood of prompting an HMRC investigation. And, even in the event of an HMRC investigation being launched, the structured and consistent process ensures an accountant can be composed and assured in responding to any additional questions HMRC may raise, with the added back up of advice, guidance and support offered by the team of R&D tax experts.

Conclusion As well as supporting their clients’ business success, accountancy firms have themselves had to consider how they will build more sustainable and profitable businesses in the future.

Technology has become crucial to this process. Exploring new technology to add R&D tax advice to their services portfolio allows accountants to meet their goals of maximising efficiency, learning and being recognised as a credible professional by their clients. It also enables them to do so in a robust and repeatable way whilst remaining compliant with the introduction of new and any future changes introduced to the scheme.

There is no doubt that HMRC’s more rigorous approach to compliance within the R&D tax relief scheme will see advisors who push the R&D tax relief boundaries facing extra scrutiny and making way for firms committed to good practice to step up as the trusted advisors for their clients’ R&D tax relief claims. Clients deserve the best advice and who better placed to deliver this than their accountants? europeanbusinessmagazine.com 61

SHRINKFLATION:

What to Know About Changing Your Packaging Manufacturers need to be careful while using shrinkflation methods to reduce costs: the consequences can be costly.

ensure the weights in packaged goods meet regulatory requirements. This regulatory check, in turn, supports consumer confidence when purchasing new products. By guaranteeing their measurements are accurate, manufacturers can avoid severe consequences when adjusting their standard packaging quantities.

Don’t get caught out!

S

hrinkflation is not a new phenomenon: jam jars, coffee containers and crisp packets are just a handful of the products that have downsized while their prices remained the same. To avoid upping costs, manufacturers often add less product, reduce packaging sizes, or use cheaper ingredients. It is a popular method companies use to avoid raising prices that may scare off customers.

Practical considerations Companies communicate several reasons for making these choices. For example, product innovation in the form of more sustainable packaging or new and improved formulas has cost implications.

On a practical note, introducing new packaging requires investment on the part of manufacturers. The supply chain, design, and packaging often require updates, and the demand for specific materials, such as paper or plastic, also shifts.

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There are also regulatory requirements manufacturers must abide by. For instance, when a manufacturer wants to reduce plastic packaging, the machines must be adjusted to ensure no structural overfilling or underfilling. This is crucial in a competitive market and is legally required to ensure consistent, fair pricing of goods. Or for example, if the government introduces legislation on calories or sugars, manufacturers will have to conform to these pre-determined quantities.

Maintaining consumer confidence Shrinkflation as a solution is often considered because of the sensitivities around increasing prices, with customers potentially tempted to switch to cheaper options if faced with a price hike.

It is therefore necessary that the prices and the contents of the packaging are measured fairly and accurately. Notified bodies such as NMi

Communication with customers about the adjustments made is crucial. Otherwise, prices may be deceiving. You only have to look at the case of Toblerone, the Swiss chocolate bar with its characteristic peaks. The chocolate producer reverted to their original shape after putting “too much space” between its peaks, weakening the rights of its trademark. The change was initially made because of higher costs for numerous ingredients, and owner Mondelez said that the exchange rate was not favourable after Brexit.

The British chocolate maker Cadbury also shrank its multipack chocolate bars in a bid to keep retail prices down. According to the Financial Times, they now contain no more than 200 calories, similar to a handful of carrots. Even prominent businesses have cause to shrink their packaging size. However, learning how to do so effectively while complying with applicable standards is essential.

Price sensitivity to remain A 2019 study by the office for national statistics has shown that between September 2015 and June 2017, more products shrank (206) rather than increased (79) in size. However, their prices tended not to change.

It is, therefore, important for consumers to consider more factors than just the price. Ultimately, it is their decision whether they want to buy the product. The same goes for manufacturers: customer loyalty is not easy to win but very easy to lose. Sensitivity to prices will remain, which means that shrinkflation strategies will remain and accuracy measures will be needed.

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New study reveals the most popular stock trading podcasts

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tock trading podcasts that are dominating 2023 and are VITAL to expanding knowledge in all things trading.A new study reveals the most popular stock trading podcasts, with InvestED taking the top spot as the most popular.

The trading world has seen an ever-growing amount of interest over the past few years; worldwide searches for ‘how to get into trading’ increased 178%, and searches for ‘trading tips’ have seen a 195% increase over the past five years.

Searches for ‘stock trading tips’ have increased by 204% worldwide over the past five years, proving how many people worldwide are interested in delving into the trading world. With the rise in popularity for podcasts

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skyrocketing over the past few years too, research was conducted to see which trading podcasts are the most popular.

The research conducted by UK financial services provider CMC Markets explored Google search data by examining the average number of monthly searches for the top stock and trading podcasts, which resulted in a ranking of the most popular stock and trading podcasts.

The most popular podcast in the rankings is InvestED, hosted by three-time New York Times best-selling author and hedge fund manager Phil Town and his daughter Danielle. The pair give advice and cast a light on the best investment strategies used by some of the most influential investors in the world.

Stretching over 400 episodes, the father-daughter duo dominates the stock and trading podcast space, with fans worldwide tuning in to hear their advice. Searches for ‘InvestED podcast’ average at 1,600 searches per month worldwide, proving just how popular the podcast is.

The following two podcasts in the rankings receive an average of 1,400 searches per month worldwide, placing them in joint second.

The Animal Spirits podcast explores life, markets and investing and is hosted by Michael Batnick, a managing partner at Ritholtz Wealth Management and Ben Carlson, the author of the wealth management blog A Wealth of Common Sense.

Their goal is to share their experiences in the markets and help make finance more understandable and accessible for their listeners. There are currently 454 episodes available for streaming, and with the podcast averaging 1,400 searches per month worldwide, fans are certainly listening to what they have to share.

The Mad Money podcast is hosted by one of Wall Street’s most successful and influential money managers, Jim Cramer. The first episode was released in March 2005, and since then, the podcast has grown into a guide for people worldwide to become better investors. The podcast has a huge number of episodes, so there is plenty of advice on how to dominate the stock market. Cramer helps his listeners navigate the jungle of Wall Street investing in a lightning round where he offers his buy, sell and hold options to callers keen to hear his expertise.

The third most popular stock trading podcast in the rankings is Invest Like The Best, hosted by Patrick O’Shaughnessy. This podcast provides insight into the minds of some of the best business and investment leaders across the globe, highlighting their trial-and-error methods of success and sharing stock market secrets exclusively to the show.

The main goal of this podcast is to guide listeners on how to spend their time and money better, resulting in successful investment outcomes.

Searches for ‘Invest Like the Best podcast’ average 1,000 searches per month worldwide, which secures its third-place spot in the rankings.

The Meb Faber show is the fourth most popular stock trading podcast, averaging 400 monthly searches for the ‘Meb Faber podcast’ worldwide. The podcast aims to help listeners grow through wealth by making smarter investment decisions alongside featuring an array of top investment professionals dishing out their wisdom regarding investments.

The podcast currently stretches to 526 episodes and is hosted by Meb Faber, a co-founder and Chief Investment Officer of Cambria Investment Management. Faber has also written numerous successful books and is a frequent speaker on investment strategies which is why fans worldwide are keen to be regular listeners of the podcast.

The following two podcasts in the rankings receive an average of 300 searches per month worldwide, placing them in joint fifth.

With currently over 1,000 episodes, is Motley Fool Money, a multi-viewpoint podcast hosted by investment genius Chris Hill, in which he is joined by a team of top investment analysts who explore the day’s top headlines in finance and business. The podcast is aimed at business-driven investors and helps to break down the stock market by sharing the perspectives of Hill’s special guests.

We Study Billionaires is currently strung over 650 episodes and has gained over 95 million downloads.

Hosted by Stig Broderson, Clay Finck and Trey Lockerbie, We Study Billionaires is the chief podcast of The Investor’s Podcast Network. During the show, the hosts are joined by some of the industry’s most famous financial billionaires, who guide listeners on applying the best strategies and methods in the stock market.

The most popular stock trading podcasts Rank

Podcast Name

Search Term

Global Monthly Search Volume

1

InvestED

Invested Podcast

1,600

2

Animal Spirits / Mad Money

Animal Spirits Podcast Mad Money Podcast

1,400

3

Invest Like the Best

Invest Like the Best Podcast

1,000

4

The Meb Faber Show

Meb Faber Podcast

400

5

Motley Fool Money We Study Billionaires

Motley Fool Money Podcast We study Billionaires Podcast

300

europeanbusinessmagazine.com 65

Matthieu Aubry,

Co-Founder of Data Analytics Company Matomo Talks to European Business

W

ith Data Privacy Day on January 28th, European Business Magazine caught up with Matthieu Aubry (pictured) , Co-Founder of Matomo, a data analytics company who recently won the W3Tech Traffic Analysis Tool of the Year award, to unpack current data privacy trends for businesses and his journey with the company.

Te l l u s a b o u t M a t o m o and what sets it apart Matomo is the leading open-source web analytics solution, allowing users to track and analyse online visits and traffic, trusted by over one million websites across the globe.

In a crowded web analytics space, Matomo stands above the competition by prioritising privacy and empowering users at every level. Users also have complete control over how their data is collected, used, and stored either

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via the Cloud or self-hosted. Granting users 100 per cent ownership of their data provides them with the peace of mind that no third parties have access to or are using their data for other purposes – like advertising or direct marketing, for instance.

As our code is open source, it is available for anyone to review, modify, improve, or customise, and this degree of flexibility and transparency is unmatched by proprietary solutions. Matomo also provides unparalleled data accuracy that is unsampled and doesn’t rely on AI to fill gaps.

All of our features come together to empower users in an ethical way.

What inspired found the company?

you

to

I was driven by my passion for software engineering and the internet.

Matomo is fuelled by both my enthusiasm for measurement to understand

things with data, as well as my concerns with mass surveillance. When I realised that true privacy was hard to achieve online because web measurement technologies weren’t being built for privacy, I knew something needed to change – and so Matomo was born.

How is data privacy influencing tech companies currently?

We’re starting to see more privacy-focussed technologies emerge, which, in combination with global regulations, is starting to put pressure on existing tech companies to start implementing privacy respecting methods. While some of these methods appear to be smoke and mirrors, others are genuine, and it’s starting to make a difference and giving hope that this movement is creating real change for the future of data privacy.

The recent W3Tech awards was a significant moment for data privacy,

with Matomo beating out the likes of Google Analytics to win the Traffic Analysis Tool of the Year 2022. It highlights the current market shift towards privacy-focused solutions to the benefit of users across the world.

What lessons have you learned as an owner and as a business?

Stay true to your values no matter what. As both an owner, and a business, this has been one of the most important lessons I’ve learned. When Matomo was founded 15 years ago, we could have easily chosen to follow the unethical practices that much larger and more successful technology companies were implementing to generate more sales. But I wouldn’t have been staying true to my values.

It’s been a long-term approach but, ultimately, people want to support

businesses that prioritise values and ethics over short-term gains.

What advice would you give business owners when it comes to privacy?

My advice to business owners is to make sure privacy is top of mind for all of your staff and all of your processes.

Start with an audit of your existing tools and practices, then audit the data you store already on your customers and leads, hire a Data Protection Officer and start training staff on privacy best practices.

You’ll gain more trust and greater loyalty with your customers when you prioritise privacy, your business will be better positioned to comply with new regulations, so you’ll avoid fines, and you’ll be better protected from data breaches. It’s a long-term investment in the future of your business, and one that is well worth the effort.

Where do you see the company in the next five years?

In the next five years, we anticipate that Matomo will be used by 2 million websites or around 2.5% of the internet. As for the product itself, it will be more approachable, user-friendly, and feature-rich. For instance, we’ll be introducing more features to make compliance with global privacy regulations even easier for our users.

But for any developments that arise in the coming years, we’ll never lose sight of our community and early adopters. Along our growth journey, we’re ensuring that our community continues to feel supported and valued throughout our expansion. All too often, businesses forget about their community when they start to expand but that’s core to Matomo and will hold true in 2028 as well. europeanbusinessmagazine.com 67

THE GREAT DISCONNECT:

WHY UK BUSINESSES ARE OUT OF TOUCH WITH EMPLOYEE STRESS

By Nick Gold

T

he cost-of-living crisis is driving a wedge between employers and their staff. In a recent research report, we surveyed 500 employers to discover what they believe causes their staff the most stress. Surprisingly, an overwhelming 96% did not believe that employee salaries are a major stressor for staff during the cost-of-living crisis.

Instead, they felt major contributors included heavy workloads, long hours, and tight deadlines.

These factors are undoubtedly stressful. But the cost-of-living crisis has dramatically overshadowed them.

Staff now struggle to focus on anything beyond the immediate financial pressure they’re under — so as businesses, we must come up with creative solutions.

But companies can’t be expected to solve this problem with pay raises and bonuses. Instead, we must forge deeper connections with staff to help them weather the storm and discover what drives them. After all, when money isn’t such a headline-grabbing issue, staff have other motivations. Instead of letting the “employee vs employer” media narrative play out, let’s talk about actual solutions.

So how can we repair the Great Disconnect?

Why staff stress matters in business Managing staff stress levels isn’t just a matter of personal well-being. While employees grapple with the day-today impact of inflation and rising costs, employers are focused on business survival.

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But neglecting to consider staff stress can have a knock-on effect on your business. Recent research suggests that 52% of UK employees plan to look for a new role that pays more or ask their current employer for a pay rise to get through the cost-of-living crisis. 16% are considering getting a second job.

Businesses can’t turn a blind eye to the cost-of-living crisis. We must recognise the impact rising costs are having on our staff, their families, their standard of living, and their mental health — not least because research shows a clear link between poor mental health and productivity.

Team leaders and middle managers have an even bigger burden to bear.

As well as managing their own stress levels, they’re the go-to point for their

direct reports. This inevitably takes a toll on their mental health: we’ve all gone to bed worrying about how we can help someone else, often at the expense of our own mental health.

So for the sake of our businesses as well as our staff, we need to address these financial issues.

How headlines fuel the Great Disconnect The media often pits staff and businesses against each other, creating a headline-led furore that makes the problem worse for both parties.

As individuals and as business owners, headlines like these can make us feel that we’re letting our employees down; there’s so much more we’d like to do. We must work hard to make

sure employees feel seen and heard.

The ideal employer would have the capacity and capability to look after each employee individually, giving them the unique support they need to feel fulfilled and financially stable.

But that’s not real life. Instead, businesses must do what they can to create an open, communicative culture and hope staff respond to and make use of these opportunities.

How to repair the Great Disconnect Subsidised travel, office breakfasts, flexible working policies: all these things can relieve the financial pressure for our staff right now, without compromising the success of our businesses.

But our research also highlights a huge disparity in communication between employees and employers.

And this is the key to repairing the Great Disconnect.

Communication isn’t a one-way street.

While employers must open up the conversation and ensure employees

feel able to express their concerns, staff must also be prepared to come forward and discuss their problems.

With a culture of openness and honesty, you can build stronger relationships with your staff and unearth some of their deeper motivations.

When we know what makes our teams tick, we can help them achieve both their personal and professional goals — and ensure they feel listened to. This can be the difference between an employee who leaves and one who stays.

Employee loyalty and the Great Disconnect People used to work for the same employer for several years, if not their entire working life. But the modern world of work is very different. Many people now expect to change jobs every few years.

So it’s inevitable that some of your staff will eventually seek new opportunities elsewhere, whether it’s to earn more money, or for another reason. Not all your staff will buy into

the bigger picture of your business, no matter how well you project it or which measures you put in place to support them.

But while people may choose to leave, it is possible for them to depart in the right way, with a positive impression of your business. Leaving the door open for them to return in future means you can ultimately reap the rewards of the work you put in, even if you’re not the right fit for them right now.

Understanding your staff on a deeper level also tells you who’s in it for the long haul. And if you’re prepared to put the work in, managing employee stress will become easier. Having a motivated, productive, loyal workforce can take some of the financial pressure off your business.

By tapping into staff motivations and recognising the huge impact of the cost-of-living crisis, you can go beyond traditional employer-employee relationships to enhance your business and start to repair the Great Disconnect. europeanbusinessmagazine.com 69

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globalization-partners.com

Pendulum co-founder says WEF can’t stop crypto innovation and adoption

A

lexander Wilke, the co-founder of Pendulum, a public blockchain connecting traditional finance with decentralized finance (DeFi), has maintained that influential global organizations such as the World Economic Forum (WEF) cannot hamper the growth of the crypto sector. Wilke highlighted how the crypto industry, through use cases such as DeFi, is on course to disrupt the financial landscape.

On the other hand, with Bitcoin (BTC) prices attempting to rally after significant 2022 losses, the co-founder explained how the maiden cryptocurrency’s price is correlated to macroeconomic factors such as inflation and central bank interest rates. Indeed, he

also talked about the short and longterm impact of events such as bankruptcies in the crypto space.

Furthermore, Wilke delved into the progress of the Pendulum roadmap and the main challenges encountered in designing and developing building a decentralized and secure blockchain infrastructure. Lastly, he shared Pendulum’s plans to ensure there is seamless integration with banking networks in 2023 and beyond.

Pendulum is a public blockchain connecting traditional finance with DeFi. For a start, can you give our readers an example of a key real-life use case of your technology?

“Pendulum’s initial key use case is servicing businesses in making instantaneous cross-border payments, including foreign currency exchange (fx).

For example, we have talked to a business in Mexico, that is importing goods from Brazil on a regular basis.

They usually pay their provider via a classic bank transfer which costs them several 2-3% in fees and would take about 1-2 weeks. One day, the money did not arrive for 2 weeks and they needed to call up their bank with a very high manual effort to finally find out, that the money got stuck with a US bank and it took additional time to unlock it. This lack of transparency is the main problem for those businesses. europeanbusinessmagazine.com 71

In this line, the developments of decentralized automated market makers (AMMs), together with the constantly growing adoption of fully collateralized fiat stablecoins, can solve the main pain points of cross-border payments, reducing costs to below 0.1%, speed up transaction time to a couple of seconds, as well as reducing counterparty and settlement risks.”

What’s the main reason behind your decision to choose the path towards the convergence of forex and DeFi? “The costs on-chain are much lower because novel-design AMMs can allocate fiat liquidity and are more capital-efficient, resulting in lower slippage and fees for the fx compared to traditional infrastructure. Due to stablecoin standards and the open architecture of DeFi applications, any user can contribute to the liquidity of various currencies, which allows much higher fiat liquidity aggregation.

The transaction finality on modern public proof-of-stake (PoS) blockchains usually takes a couple of seconds, and an exchange transaction is secured by the AMM smart contract that executes the transaction as a payment-versus-payment (PvP).

This architecture protects the user’s funds and ensures that the sending of tokens will only be allowed and executed.

When the other currency of the trading pair is received settlement and counterparty risks are solved by a smart contract that can only execute public, auditable software code running on public infrastructure. Next to these direct advantages for the user, on-chain fx implements a level of transparency that has not been seen before. All reserves, all exchange rates, liquidity, and trades are visible and auditable while protecting user privacy. Everyone wins when we bring more fiat and stablecoin use cases on-chain.”

A c c o r d i n g t o P e n d u l u m’ s roadmap, it is projected that Q1 of 2023 will be a solid period for the project as you plan to launch the mainnet. Is everything going

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as per the plan? What was the hardest and most challenging thing when launching Pendulum, and why?

“Pendulum’s blockchain development started in 2021, and the team’s experience in blockchain development dates back to 2016 when we were already interacting with stablecoins on the Stellar blockchain.

I believe we have a very solid plan and product development in place for achieving our goals in Q1 2023 and for 2023 overall.

One of the main challenges is building a decentralized and secure blockchain infrastructure from scratch and distributing it. With the shared security and decentralization we inherit as a Polkadot parachain, Pendulum is starting at a very high level, even better than some of the top layer-1 blockchain projects. Additionally, we,

fortunately, have a very active community helping us to run nodes and collators.

A second challenge is our bridge from Stellar to Pendulum, where we bring high-quality fiat stablecoins into the Polkadot ecosystem. Bridges are always a security challenge, and we had to choose wisely how we deal with the bridge-security. With Spacewalk, we found a solution that comes with a decentralized vault architecture for securing the bridged assets.

This decentralized concept is much more resistant to attackers and has just passed an external audit.”

When it comes to the myriad regulatory issues that DeFi platforms have to contend with, could you perhaps elaborate on Pendulum’s approach to compliance and regulation?

ownership. All our compliance initiatives are aimed at wider adoption by users and especially businesses by reducing their risks.”

How will Pendulum ensure that on- and off-ramp requirements for integrations with local banking networks are completely seamless?

“Pendulum will standardize the onand off-ramp interfaces. We come with lots of experience and help from the Stellar ecosystem which has built that for years, and we are aiming at reducing the friction even further, especially with more custom smart contracts and deep wallet integrations. An additional factor is the seamless interoperability between blockchains on Polkadot that helps us natively integrating assets from Tether and Circle into Pendulum.”

Considerable recent attention has been paid to the issue of liquidity in the crypto sector; how does Pendulum deal with this problem in DeFi?

“Pendulum serves as an infrastructure working with partners for stablecoins that are compliant in their region. It will try to stay away from experimental algorithmic stablecoins and rather include widely adopted stablecoins or CBDCs. We follow the regulatory landscape pretty closely and are especially keen on developing a public infrastructure that offers the tools needed for financial institutions or corporations to enter DeFi. For example, we are looking at partnerships with DID providers (e.g., KILT) who are aiming at reusable KYC data preserving user privacy. A second focus area on that topic is data privacy. We are talking to privacy technology providers who could offer decentralized transaction privacy while staying compliant with auditors and respecting the user’s data

“Initial liquidity on Pendulum will be provided by partners and the community and the blockchain will also have an initial reward programs for liquidity providers in order to achieve the minimum required liquidity for the platform to execute cross-border payments efficiently.

Pendulum is putting a real-world use cases on-chain and we see proof of constantly growing stablecoin transaction volumes and users, independently from other crypto markets or asset prices. In this situation the main differentiation to other projects is, that we can actually achieve a sustainable ecosystem and liquidity growth, reducing the rewards with further adoption.”

Renowned investors like Anthony Scaramucci see the World Economic Forum’s pessimistic position on cryptocurrencies as bullish for the crypto space overall.

Do you believe the WEF has or will have such a big impact on cryptocurrency prices?

“A pessimistic position on cryptocurrency prices and being bullish for the crypto space are two different things for me. I believe, looking at the advantages of DeFi regarding transparency, settlement risks and efficiency, that the crypto space is disrupting the financial industry already, today, and will continue doing so in the future.

More and more use cases will be adopted and more intermediaries will be automated by smart contracts, potentially delivering a better service than their centralised counterparts.

This cannot be stopped by some people having a different opinion including the WEF. In my opinion an opposition to that overarching DeFi growth can only happen when people are not familiar with DeFi or defending their currently disrupted business.

About being bullish about crypto prices, everything apparently has an impact. Big organisations that are trusted within the population can have a negative impact. A bigger impact, I believe, are events like the bankruptcies of some centralised exchanges or crypto projects that might have been questionable from the beginning. Both things will only have a short-term impact and merely slow down adoption as the strategic advantages of DeFi remain substantial.”

Last but not least, after the heavy losses the cryptocurrency market had in 2022, with Bitcoin losing over 60% of its value, do you believe BTC price will have a bullish resurgence throughout 2023?

“If you ask me about speculative opinion without giving investment advice, I must say, that I see a correlation of the BTC price with inflation and central bank interest rates going up and down, so let’s hope for a change there.

Additionally, I think the newsflow around centralised crypto exchanges going bankrupt and users and companies losing money was not helpful in 2022. So, let’s take a more active role here and try trading on DEXes with transparent reserves instead.”

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Satellite and Ground Segment Technology The Key To Military Applications

S

atellite technology has played a crucial role in military applications for several decades, providing reliable and secure communication capabilities to armed forces around the world. The ground segment technology that supports these satellite systems is an essential component of this infrastructure, enabling the transmission of information between ground stations and satellites. In recent years, there has been a growing need for small and mid-sized European nations to have access to secure defence-grade waveform technologies to protect against emerging security threats. This editorial will focus on the importance of ground segment technology in military satellite communications and how it can be utilized to provide secure defencegrade satellite waveforms to smaller nations.

Ground segment technology plays a vital role in military satellite communications systems. It consists of a network of ground-based equipment, including antennas, modems, amplifiers, and other devices, that support satellite communications.

Ground stations act as intermediaries between satellites and end-users, facilitating the transmission of information between them. They are responsible for receiving signals from satellites, decoding them, and relaying them to the appropriate user terminals. Ground segment technology also provides essential functions, such as signal processing, tracking, and control, which are necessary for the successful operation of satellite systems.

Military applications of satellite communications have been instrumental in modern warfare, providing crucial communication capabilities to military personnel in remote locations.

Satellites can support various communication modes, including voice,

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video, and data, making it possible to communicate securely and reliably with troops deployed in challenging environments. In addition, satellite communications can also be used for intelligence, surveillance, and reconnaissance (ISR) purposes, enabling military forces to gather information about enemy activities and movements. Satellite communications technology has become so critical to military operations that it is now considered a strategic asset.

However, the use of satellite communications technology in military applications also raises concerns about security and resiliency. The transmission of sensitive information over satellite systems requires the use of secure encryption and protection mechanisms to prevent unauthorized access, to mitigate (manmade) interference and mask satcom traffic activity. Defence-grade satellite waveforms are used to protect against such security threats, and it is essential for smaller nations to have access to these technologies to protect their military communications from cyber-attacks and other forms of electronic warfare.

The development and deployment of defence-grade waveforms require significant investment in research and development. It involves the creation of encryption algorithms and protection mechanisms that are capable of withstanding sophisticated attacks from hostile actors. These technologies are often developed by large defence contractors and are typically only available to larger nations with significant defence budgets. As a result, smaller nations may struggle to access these technologies and may be more vulnerable to security threats.

Advancements in ground segment technology can provide new opportunities for smaller nations to access secure defence-grade waveforms

and technology. One such example is the use of software-defined (SD) modems in satellite communications.

SD modems are a type of baseband communication system that uses software to define the modem’s operating parameters. They can be reprogrammed and updated remotely, allowing for the deployment of new security measures and encryption algorithms without the need for hardware modifications.

SD modems can also be used to provide waveform diversity, which is the ability to use multiple communication modes simultaneously. By using different waveforms for different types of communication, such as voice and data, it is possible to increase the security of satellite communications.

Waveform diversity makes it more difficult for hostile actors to intercept and decode communications, as they would need to have knowledge of multiple encryption algorithms and communication modes.

Another advantage of SD modems is their ability to operate on multiple frequency bands when paired with multi-band/frequency/orbit satellite terminals. By using different frequency bands for different types of communication, it is possible to increase the resilience of satellite systems against jamming and interference. Hostile

have the necessary infrastructure and expertise. One example of a small nation that has successfully deployed defence-grade EPW is Estonia.

Estonia, a country of just 1.3 million people, has invested heavily in its defence capabilities in recent years, including the deployment of defencegrade waveforms. The Estonian government has recognized the importance of secure communication channels for its military operations and has therefore made significant investments in this area. The country has developed its own defence-grade waveform, which is now fully operational and provides secure communication services for military applications.

actors often use jamming and interference tactics to disrupt satellite communications, but by using multiple frequency band modems and terminals, it is possible to switch between transponders, satellites or constellations to maintain communication capabilities even in the face of such attacks.

Satellite communications have become an integral part of modern warfare, with an ever-increasing number of military applications relying on this technology. With the increasing security threats to small and midsized European nations, the need for secure and accessible defence-grade waveforms (Earth station in the Polar region) has become more critical than ever.

The ground segment of a satellite communication system comprises the infrastructure on the ground that supports satellite communication.

This includes the antennas, satellite modems, and network management software. The ground segment technology is critical to ensuring that the satellite communication system operates optimally and provides reliable and secure communication services.

In addition to military applications, satellite communications also have significant commercial and civilian applications. These include satellite

television and radio broadcasting, internet connectivity, and disaster management and relief.

However, the increased reliance on satellite communication systems has also led to concerns about their vulnerability to cyber-attacks and other security threats. The ground segment of a satellite communication system is particularly vulnerable, as it is located on the ground and therefore more accessible to potential attackers. A cyber-attack on the ground segment can result in the compromise of the entire satellite communication system, which could have significant implications for both military and civilian applications.

To address these security concerns, defence-grade waveforms has been developed. Defence-grade waveforms provide a secure and resilient communication channel that is inaccessible to unauthorized parties. This technology is designed to provide the highest level of security for military communications, ensuring that critical information is protected from potential attacks.

The deployment of defence-grade satellite waveforms are not limited to large countries with significant military budgets. Small and mid-sized European nations can also access this technology, provided that they

The Estonian example shows that small and mid-sized European nations can also access secure defence-grade waveforms, provided that they are willing to make the necessary investments. However, it is not just a matter of investing in the technology itself; these countries also need to have the necessary expertise to operate and maintain the technology. This requires the development of a skilled workforce, which can be a significant challenge for small and mid-sized nations.

To address this challenge, European countries could work together to develop a regional approach to defence-grade waveforms. This could involve the pooling of resources and expertise to develop and deploy defence-grade waveforms across the region. By working together, small and mid-sized European nations could access this critical technology without having to make significant investments on their own.

European countries to work together to develop the European Protected Waveform (EPW) Secure and resilient satellite communications are an important aspect of modern military operations and defense strategy. European countries have recognized the need to work together to develop the European Protected Waveform (EPW) through the European Defence Funds (EDF) initiative. europeanbusinessmagazine.com 75

Bio: Koen Willems VP, EU Programs & Government Relations, ST Engineering iDirect Koen Willems holds the position of VP EU Programs and Government Relations at ST Engineering iDirect Europe, a market leader in satellite communication technologies. Koen provides his expertise in EU government programs through the Belgian legal entity (proxy) organisation ST Engineering iDirect (Europe) CY NV leveraging the EU footprint and installed base in ground segment satellite networks (www.idirect.net/ st-engineering-idirect-europe). On top of his EU activities, Koen defines and develops ST Engineering iDirect’s global strategy for the government and defense market.

Koen Willems has more than 25 years’ experience working in the technology industry. Before joining ST Engineering iDirect in 2008 he was Product Marketing Manager for Europe at the electronics giant TOSHIBA. Koen has a master’s degree in English and Scandinavian Languages from Ghent University and a master’s degree in Marketing Strategy and Management from Vlekho Business School.

His expertise in the government and defense satellite market has grown through the involvement in different large (EU) programs as well as frequent interactions with the end-user community and a range of topic-related degrees such as the ‘High Studies in Security and Defence’ degree at the Belgian Royal Higher Institute for Defence, the ‘European Session for Armament Officials’ degree at the French National Institute of Higher Defense and the ‘European Advanced Strategy Course on Security and Defense’ degree at the Egmont Institute, IHEDN and BAKS. You may know Koen as a GovDef satcom technology evangelist through his regular appearance in editorials in satellite focused publications, white papers and speaking slots at conferences around the world.

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Interview

Koen Willems

VP, EU Programs & Government Relations, ST Engineering iDirect Can you tell us more about the European Protected Waveform?

What is it and why is it needed?

In today’s military applications supported by satellite communications, high data rates, security, resilience, information assurance and link efficiency technologies are inextricably linked. Military operations are becoming more complex as conflict areas grow more dispersed on a global scale, with a growing need to support a diversity of on-the-move, on-thepause and fixed platforms on land, in

the air and at sea over both GEO and multi-orbit satellite constellations.

Current secure and tactical satellite communication waveform solutions are expensive, inefficient and do not allow them to be interoperable amongst multiple vendors.

The European Protected Waveform (EPW) is built around four cornerstones: agile, secure, affordable and interoperable satellite communications. The EPW will be developed in tandem with current and future requirements for military and secure

In January 2023, a consortium of companies and institutions kicked off the European Protected Waveform project with the end goal of enabling the interoperability of tactical satellite communications. In this interview, Koen Willems, VP, EU Programs & Government Relations, ST Engineering iDirect, explains why this waveform is so important and how it will be delivered.

How long will the project run for?

The Consortium will work together over a period of 39 months to design the waveform and accompanying technologies for resilient and secure satellite communications. It will comprise two phases: the design phase and the certification and productization phase.

How will the project be funded? operations considering upcoming disruptive technologies, EU initiatives such as GovSatCom and IRIS 2 and multi-layered security and resiliency solutions.

As such the EPW is accessible to small, mid-sized, and large European nations seeking to embrace todays and future challenges related to increased throughput demand over satellite, dispersed operations, mobility, and new security threats.

Through disruptive innovative technology coming from key stakeholders in EU industry and universities, the EPW addresses the growing demand for European autonomy.

Who are the stakeholders involved in the project?

The stakeholders, a mix of large companies, SMEs and universities come from 11 nations across the continent

including Belgium, Denmark, Germany, Croatia, Italy, France, Luxembourg, Netherlands Poland, Spain and Romania.

The triple helix approach to the program will ensure the waveform benefits from the shared experience and expertise of government, educational institutions, and industry to deliver an end result that is of the highest standard. The project is being led by us at ST Engineering iDirect Europe. The development of waveforms has always been part of our company’s DNA, seeking the best balance between efficiency, agility and security.

The coming together of these key companies and institutions, with their combined knowledge and experience will equip European countries with highly reliable, seamless satcoms to ensure that they can communicate with confidence and security no matter where they operate.

The project will be co-funded by the European Defence Fund and the participating nations.

Why is the project so important?

The EPW will become Europe’s sovereign satcom waveform, future-proofing satellite capabilities for European countries and promoting interoperability across European agencies ensuring its deployment in joint operations. The waveform will be agile, secure and resilient but also affordable so that smaller nations will also be able to take advantage of its capabilities.

Co-funded by the European Union.

Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the European Commission. Neither the European Union nor the granting authority can be held responsible for them. europeanbusinessmagazine.com 77

Supply chain evolution:

How can the consumer electronics industry use data to improve sustainability?

With each passing year, consumers are becoming increasingly concerned about the sustainability of products. According to Simon Kucher’s 2022 Global Sustainability Study, 66% of consumers now rank sustainability as one of the top five drivers behind a purchase decision, up from 50% in 2021. Additionally, 75% of global consumers feel environmental sustainability is as important or more important to them now than it was in 2021.

By Marie McCarthy (pctured) , the Consumer Electronics Revenue Director at Centric Software

T

he consumer electronics industry lags behind in sustainability compared with other retail sectors. This shift in consumer behavior is particularly challenging for consumer electronics brands, retailers and manufacturers, especially as reports continue to emerge about growing quantities of e-waste and its environmental impact. To address this issue, the consumer electronics industry is taking steps to improve post-use disposal, such as using more ‘closedloop’ materials. In the future, it seems likely that brands will develop products in ways that make it easier to recycle their parts. However, recycling can’t be the whole story. A multifaceted solution is needed to fully address the problem of e-waste and increase sustainability.

Sustainability isn’t just about selecting the right materials - it’s about having the right information, and using it to make informed decisions. How can consumer electronics companies use data to improve sustainability before the product is available to the consumer?

Aim to become digitally innovative Digitalization and sustainability will both drive future growth, with

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digitalization enabling sustainable transformation.

Brands that incorporate a robust digital transformation strategy and deploy it to become more efficient and sustainable will flourish. For example, many companies are beginning to embrace digital twin technology to test their supply chain design and build greater resilience.

On the planning side, under-stocking, over-stocking or misallocating inventory can have serious implications for sustainability and profitability. By gaining transparency and data-based insights, brands can better understand what consumer products they should deliver and boost agility to quickly adjust to shifting demand.

The benefits of a digital-first approach will be felt at every point along the supply chain, right through to merchandising, marketing and customer service.

Invest in circular supply chains According to Deloitte, 46% of consumers want more clarity on how to dispose of or recycle old products. By implementing circular supply chains,

brands can promote recycling and reuse of old materials at the end of a product’s lifecycle.

An effective circular supply chain tracks materials throughout the product lifecycle so they can be identified and fed back into the conversion process for reuse, recycling or re-manufacturing. These circular supply chains are not limited to a single company’s value chain. Third-party vendors often recycle and feed the materials into another sector’s value chain as substitutes for virgin raw materials.

Successful raw material recapture and reuse at the end of a product’s lifecycle depends heavily on traceability. Digital tools that can effectively track the usage of raw materials throughout the product lifecycle are the key to implementing circular supply chains in any meaningful way.

Transparent workflows sidestep disruption Improving supply chain visibility empowers consumer electronics brands, retailers and manufacturers to become more sustainable and resilient to risk by predicting and

responding rapidly to events in the supply chain ecosystem.

Using a product lifecycle management (PLM) system such as Centric PLM®, consumer electronics teams can increase workflow transparency, collaborate and co-develop with suppliers, gain early profit margin visibility, speed time to market, leverage buying power to drive down costs and prevent supply chain disruptions from delaying product launches.

PLM enables teams to preserve the quality and compliance of consumer electronics products by storing all live product-related data on one realtime, centrally accessible digital platform. Teams can easily access and update version histories, corrective actions, performance metrics, factory audit data, compliance documentation, regulatory information and differences in supplier costs.

Using collaborative and highly visual digital touch-screen boards such as Centric Visual BoardsTM for SKU rationalization, this can help improve inventory management, reduce warehousing costs, increase profitability and lead to greater customer

satisfaction. This approach allows teams to gain better visibility of product assortments and make datadriven decisions that optimize the supply chain and improve the overall performance of the business.

Use sustainability reporting to inform decision-making Mandatory ESG reporting is set to begin for qualified European Union (EU) companies on January 1, 2024, requiring companies to provide investors, customers and other stakeholders with better metrics on the environmental impact of business operations.

By using digital analysis and reporting tools for sustainability assessments, teams can quickly access and present up-to-date data to inform and guide internal and external reports.

Centric PLM’s sophisticated reporting capabilities provide teams with the ability to make more informed planning and sourcing decisions. With the right tools to track sustainability initiatives, improve visibility, gain insights and understand, measure and analyze environmental impacts, teams are empowered to make conscious

Marie McCarthy is a PLM and portfolio planning enthusiast who brings 25 years of experience in global B2B, technology, enterprise software and SaaS to her work as the Consumer Electronics Revenue Director at Centric Software. Marie works closely with consumer electronics companies of all sizes to deliver end-to-end digital transformation, using Centric’s world-leading PLM and visual planning solutions to revolutionize product creation, sourcing and launch. and sustainable changes throughout the entire supply chain.

With much competition in the global consumer electronics industry, this provides the opportunity for companies to differentiate themselves with true powerful sustainability initiatives, whilst also elevating brand perceptions.

Accurate, up-to-date supply chain data is the cornerstone of any sustainability strategy. If teams lack insight into raw material availability, costs, supplier issues, environmental impacts, material recyclability and potential supply chain disruptions, it becomes impossible to make effective decisions. Consumers are becoming more aware of sustainability issues in the consumer electronics industry, and it’s up to brands, retailers and manufacturers to step up and embrace digital technology that will deliver truly sustainable products. europeanbusinessmagazine.com 79

REVIVING UK PRODUCTIVITY:

WHAT CAN BE DONE?

By Peter McAteer, CEO, Sysmax The decline in UK productivity since the Great Recession of 2008/2009 has been a matter of concern for business leaders, policymakers, and economists alike. Despite hopes that the pandemic would act as a catalyst for transformation and boost productivity, recent figures from the Office for National Statistics (ONS) - Productivity overview, UK (ons.gov.uk) - show that the UK still lags behind several other G7 economies.

Most industries have large inefficiencies which represent a major opportunity and the potential for productivity gains is enormous. The direct cost of avoidable error in the construction industry, for example, is around 5% of project value according to international studies highlighted by construction industry experts GIRI (Get It Right Initiative). Plus, GIRI recently reported that when ‘unrecorded process waste, latent defects and indirect costs are included, estimates of the total cost is closer to £10-25 billion per annum across the sector.’ Similarly in the oil and gas sector, it’s circa 15% of project value. This is just the tip of the iceberg, and the challenge for many senior leadership teams is understanding and knowing how and what to do to improve productivity.

Best practices in multiple industries are built over many years. To be successful these need to be actively deployed, managed, and integrated into day-to-day operations. However, it is not unusual within organisations to see guidelines and processes left collecting dust on bookshelves or ignored on servers. They provide false assurance that the organisation is doing what it needs to for its stakeholders. In addition, operational managers are often faced with variations of international, national, and regional standards. So how do we address this?

How can operational leaders know 80 europeanbusinessmagazine.com

Peter McAtee what their teams and contractors are doing? Splitting best practices down by role and placing the measurable metrics in the hands of the workforce enables active reminders, ongoing support and tracking of their use, plus improvement of the content on a 24/7 basis. The impact of this is that false assurance becomes real assurance whilst changing the mindset and culture of the entire organisation.

Furthermore, organisations of all sizes rely heavily on contract supply chains. Contract supply chains enable growth and flexibility within a company along with many other benefits. When things run smoothly all is good, yet problems can and do arise.

The challenge for business leaders is that all too frequently problems only become apparent when the product or service is delivered, and this in turn causes major disruption, delays, and spiralling costs.

The good news is that thanks to advances and investment in digital

transformation the solution is at hand, as technology such as Benchmax, Service Now, and Ideagen can help to deliver efficiencies. All suppliers have best practices which can be distributed by role to enable active reminders, ongoing support, plus tracking of use and improvement of content daily.

Importantly, this technology once applied enables organisations to see the active deployment of best practices which improves productivity.

Digital transformation should also be embraced to unlock productivity gains. The pandemic has highlighted the importance of digital technologies for business resilience and efficiency.

Embracing digitalisation across sectors can automate routine tasks, enhance communication and collaboration, and optimise processes. The government can support digital transformation through initiatives such as providing incentives for businesses to adopt innovative technologies, improving digital infrastructure, and

promoting digital skills training. Furthermore, fostering a digital ecosystem that encourages research and development in emerging technologies can position the UK at the forefront of innovation and productivity growth.

Today, the UK’s investment in technology and tech infrastructure lags behind countries such as the United States, Denmark, and South Korea.

Investment in infrastructure is crucial for enhancing and improving productivity. The UK has historically suffered from underinvestment in infrastructure, including transportation networks, digital connectivity, and research and development facilities. A significant increase in public and private investment in these areas can lead to improved efficiency, reduced transportation costs, and enhanced connectivity, enabling businesses to operate more effectively. It will also keep the UK in line with other competing countries. Additionally,

investment in research and development can drive innovation and technological advancements, further boosting productivity. The USA has been wise to invest heavily in technology and now leads the world whilst replacing a considerable proportion of its manufacturing base where lower-cost nations have picked up the baton.

Improving regional productivity disparities is also crucial. Productivity levels vary significantly across different regions of the UK, with London and the Southeast not only outperforming other areas but the difference is increasing year on year according to the Office for National Statistics from (1998 to 2018). Investing in regional infrastructure, promoting collaboration between businesses and educational institutions, and supporting regional innovation hubs can help reduce these disparities. By ensuring that all regions have the necessary resources and opportunities to thrive,

the UK can unlock untapped potential and drive overall productivity growth.

Finally, fostering a culture of innovation and experimentation is essential for productivity revival. Encouraging businesses to take risks, experiment with fresh ideas, and learn from failures can lead to breakthrough innovations and productivity gains. The government can create an innovation-friendly environment by providing improved tax incentives for research and development, facilitating knowledge transfer between academia and industry, and promoting collaboration and knowledge-sharing among businesses.

Reviving UK productivity requires a comprehensive and coordinated approach that addresses multiple aspects of the economy. By investing in infrastructure, addressing the skills gap, creating a multi-skilled, sector-transferable workforce by sharing core skill data, supporting entrepreneurship, embracing digital transformation, reducing regional investment disparities, and fostering a culture of innovation, the UK can set itself on a path towards sustained productivity growth. Policymakers, businesses, and society must recognise the importance of productivity and collaborate to implement the necessary reforms and initiatives to unlock the country’s full economic potential.

We need also to enthuse the investment community with the growth potential of technology in the UK. Companies such as Constellation Software of Canada, whose share price has quadrupled in recent years through the growth of their technology-based business internationally, is a notable example. It’s no surprise that over 65% of investment funds in UK technology originate from North America, as UK investors move slowly behind them in their understanding and enthusiasm for higher-end tech.

To move our industrial base from our past heavy industries and beyond the thinly protected finance sector (which has championed the nation in the near past), and into the bold future our young deserve is a challenge. But it’s an exciting one in which we will change the way we function as a nation. Again. And again. europeanbusinessmagazine.com 81

TAKING THE GLARE OUT OF THE CORPORATE SUSTAINABILITY DUE DILIGENCE DIRECTIVE (CSDDD)

By Fiona Watson, Senior Director, Redefining Value, WBCSD

A

s the EU has to work on its Green Deal agenda over recent years, almost every business operating in Europe will have started to feel the regulatory sunlight of increasing transparency on products, services, corporates and now supply chains. What was already a bright spotlight on corporate reporting with the Corporate Sustainability Reporting Directive (CSRD), is now turning into a brilliant glare on supply chain transparency as the Corporate Sustainability Due Diligence Directive (CSDDD) goes into its final legislative stage. While the far-reaching compliance considerations and operational details may initially seem dazzling for impacted businesses, they are a timely evolution of voluntary frameworks intended to drive holistic longterm value creation. As Europe heads into the summer season, now is the time for business leaders to ‘wear shades’ to focus on the intrinsic strategic opportunities with customers and take the potential glare out of the CSDDD. Like the CSRD, the CSDDD is a clear call to action for companies. It will have significant direct and indirect implications throughout value chains worldwide. In essence, the CSDDD will introduce a duty for board directors to set up and oversee the implementation of mandatory human rights due diligence and environmental due diligence (mHREDD) processes.

These processes must be integrated into the corporate strategy and their operation reported on to stakeholders. Enforcement will be through both public and private legal mechanisms (i.e., civil liability) and may involve fines of up to 5% of global turnover.

In addition, the CSDDD includes an

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obligation (for many but not all companies in scope) to develop a ‘Paris-aligned’ climate transition plan (also in line with CSRD Art 19) that the Directors oversee and to which whose variable compensation targets will be fixed. The effective date is expected to be sometime in 2026, two years after the final text is published. That is not much time for what is a significant change in gear for companies, their Boards and the corporate ecosystem at large, regardless of whether they are directly in scope and their existing sustainability leadership credentials.

The CSDDD will directly impact EU and non-EU companies in scope (EU companies with 500+ employees and €150 million+ in net turnover worldwide, widening to companies with 250+ employees and €40million+ in net turnover worldwide two years later; and non-EU companies with equivalent EU-derived revenues). These companies should be already mobilizing potentially significant internal resources to meet the expected operational and legal requirements of mHREDD, alongside mandatory ESG reporting

requirements including CSRD. To mention but a few likely implications: upstream suppliers and downstream customers will need to be mapped and assessed worldwide, procurement and sales contracts re-negotiated and amended, tech systems built (or significantly enhanced), new data captured, managed, analyzed and monitored, commercial strategies re-evaluated, climate transition plans considered and executive performance re-calibrated.

The commercial impacts are already being felt and the indirect impacts of the Directive will also be significant for companies who are not directly in scope. Many companies are already pushing for value chain transparency globally, requiring even small

CSDDD in more detail.

Across their value change, companies, under Board supervision, will need to take appropriate measures to prevent (or where not possible, mitigate) potential adverse human rights or environmental impacts. These measures will include developing and implementing preventative action plans, seeking contractual assurances (with associated compliance measures). If the potential adverse impacts cannot be mitigated, the company will not be permitted to enter into new or extended relations with that business partner (something that will require amendments to Member State laws). All of this gets scooped up into a reporting obligation with enforcement to come from both public and private parties. Member states will need to set up newly-appointed (or empowered) supervisory authorities with investigative enforcement powers with sanctions to be determined at a Member State level but likely to include pecuniary sanctions (not more than 5% of company’s worldwide turnover). Critically, however, the CSDDD provides for civil liability and a basis for private enforcement actions. companies to be systems- and dataready to provide robust product, service and value chain-related data on their environmental and social impacts. Hence, as legal and operational teams assess the potential ‘glare’ of the detailed requirements, now is a great time for leaders of any business with a European nexus to look up and down their value chains to size the implications. Engaging with customers and value chain stakeholders will now help form a long-term view of what data capability will be expected both by them (to meet their own CSDDD obligations), and of them (to meet the needs of other companies) and on what timeline. Doing so now will position companies to prioritize building internal capabilities and

get ahead of customer expectations.

Striving to create a customer-friendly friction-free reporting experience that meets large customers’ requirements, as well as CSRD and other mandatory reporting requirements, is likely to create a commercial advantage. Transparency on sustainability performance is rapidly becoming a key driver of B2B and retail purchasing decisions, talent retention and broader license to operate. In short, this enhances the business case – and the imperative - for enhanced sustainability performance ahead of regulatory timelines.

By its very nature, the CSDDD will require collaboration across value chains on new and rapidly evolving topics and approaches. WBCSD

works with its global membership of more than 200 large corporates to facilitate the sharing of knowledge and enable and accelerate the adoption of standards and tools across key areas of climate, nature and social equality as well as core capabilities.

Specifically, WBCSD is working with its members to develop enhanced data and management capability on Scope 3 accounting and carbon performance and accountability and provide support on internal performance management and reporting capability. Working collaboratively on these areas won’t lessen the operational requirements. Still, it can help remove the glare and give corporate leaders a line of sight on what matters, whatever the weather. europeanbusinessmagazine.com 83

UNVEILING THE POWER OF STAKEHOLDER UNDERSTANDING:

THE KEY TO A FLOURISHING DIGITAL TRANSFORMATION JOURNEY

Paul Meersman, Head of Marketing, CDS

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n today’s dynamic and ever-changing business landscape, staying ahead of the competition is essential for companies to thrive. The concept of digital transformation has gained immense popularity in recent years, as organisations rush to embrace new technologies and processes to keep pace with the rapidly evolving times. However, despite the widespread adoption of these initiatives, studies indicate that 70% of such projects fail to deliver the anticipated results, leaving companies perplexed about the reasons behind these failures. The solution lies in adopting a human-centred approach that revolves around understanding the genuine needs of stakeholders.

Who are the stakeholders?

Stakeholders encompass individuals or groups who hold a vested interest 84 europeanbusinessmagazine.com

in the outcomes of a project or initiative. These stakeholders can include employees, customers, suppliers, shareholders, regulators, and even the larger community. Each group of stakeholders has distinct needs and expectations that must be carefully considered when implementing a digital transformation program.

Why is it crucial to comprehend stakeholder needs?

One of the gravest mistakes made by companies is assuming that they know precisely what their stakeholders need or want. This assumption often leads to a one-size-fitsall approach that fails to address the specific requirements of individual groups, potentially alienating people with unique requirements.

When it comes to a transformation project, businesses must therefore recognise the diversity among individuals, including their varied backgrounds, abilities, and levels

of digital literacy. It is essential to ensure inclusivity and accessibility in digital solutions. For example, a company might believe that introducing a new digital platform will enhance customer access to its services. However, for the platform to truly succeed, it must also be userfriendly and offer the necessary features that customers actually need and can utilise with ease.

To avoid this potential pitfall, it is vital to engage with stakeholders early on in the process through comprehensive user research. This entails actively listening to their concerns, understanding their pain points, and gathering feedback on their expectations for the new digital solution. This valuable information can then guide the design and development of the program, ensuring that it effectively meets the needs of all stakeholders. Such thorough research also plays a pivotal role in providing reliable insights that inform decision-making and

To succeed, it requires teamwork across different departments, and in some instances, compromise. Organisations should tap into varying expertise, insights and learned experiences to break down potential silos and foster a culture of innovation and collaboration across the board.

This will also empower and engage all team members in the transformation process.

Lastly, a long-term perspective should be maintained. Digital transformation programs are not isolated events but ongoing processes that require continuous improvement and adaptation. This means that companies must remain committed to gathering ongoing feedback and evolving the program over time to ensure its future success.

Embracing human-centric digital transformation

mitigate the risks associated with change.

Companies should initiate this process by posing key questions to ascertain the current performance of their services, understand stakeholder and user perspectives, identify future requirements, and establish metrics for measuring change, among other crucial aspects.

In addition to gathering feedback, it is equally important to provide strong and transparent leadership that effectively communicates the reasons behind any change, as well as the expected outcomes. Far too often, directives are ‘handed down’ from above without sufficient explanation, which not only alienates employees directly involved or impacted by the change but can also generate resistance across the organisation.

Open communication is therefore the cornerstone of understanding the needs of all parties involved.

Businesses should maintain regular

and ongoing communication with stakeholders, from the outset, and throughout the implementation process. This includes providing regular updates on progress, acknowledging and addressing any concerns as they arise, and actively seeking further feedback when necessary. By keeping stakeholders well-informed and involved, companies can foster trust and ensure that the program stays on track.

Stakeholders needs are multifaceted It is also important to recognise that different stakeholder groups may have conflicting priorities. For example, employees may prioritise a new digital solution that simplifies their workload, while shareholders may be more focused on increasing profits.

Achieving a balance between these competing priorities often requires careful consideration and a willingness to work collaboratively.

A successful digital transformation program hinges on the ability to comprehend and address the genuine needs of stakeholders – not merely perceived challenges and opportunities. By actively engaging stakeholders from the outset, gathering user insights, maintaining transparent communication throughout, managing competing priorities, and adopting a forward-looking perspective, companies can ensure that their initiatives deliver the desired value, and ultimately ROI. Organisations that effectively navigate the digital transformation journey stand to reap substantial benefits, including improved customer experiences, enhanced operational efficiency, and newfound growth opportunities.

Insight, serving as an invaluable asset, empowers businesses to create and deliver customised products and services that truly cater to user needs, propelling them towards achieving their objectives and ensuring sustainable success. And as the digital landscape continues to shape the business environment, organisations that prioritise stakeholder needs will emerge as the frontrunners positioned for future success. europeanbusinessmagazine.com 85

NAVIGATING THE FINANCIAL FRONTIERS:

THE LATEST INNOVATIONS IN DIGITAL FINTECH

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n an era of unprecedented digital transformation, the financial landscape is undergoing a profound shift, with fintech emerging as a powerful catalyst for change. As the world embraces technology-driven solutions, the fintech revolution has sparked a new wave of innovations, reshaping traditional financial services and unlocking previously unexplored opportunities.

From frictionless payments to artificial intelligence-driven investment strategies, fintech is continuously pushing the boundaries of what’s possible in the financial realm. In this article, we delve into the latest advancements that are driving the digital fintech frontier, redefining the way individuals and businesses interact with their finances.

enhancing financial accessibility and convenience for consumers.

The Rise of Digital Wallets and Contactless Payments

Robo-advisors have democratized investing, allowing users to access sophisticated investment strategies without the need for human financial advisors. Powered by AI algorithms, these platforms analyze vast datasets to provide personalized investment recommendations tailored to individual risk profiles. This democratisation of investment services has made wealth management more accessible and cost-effective for a broader demographic.

Digital wallets have become the new standard for everyday transactions, revolutionizing the way we pay. With seamless integration across multiple devices, users can securely store their payment details and conduct contactless payments with a mere tap. As the world moves towards a cashless society, these digital wallets have played a crucial role in 86 europeanbusinessmagazine.com

Decentralized Finance (DeFi): Empowering Financial Inclusion DeFi, powered by blockchain technology, is rapidly disrupting the traditional financial ecosystem. By eliminating intermediaries and enabling peer-to-peer transactions, DeFi platforms provide unprecedented financial access to the unbanked and underbanked populations worldwide. With its promise of transparency, efficiency, and inclusivity, DeFi has attracted significant attention from investors and regulators alike.

Robo-Advisors: Smart Investing for All

Digital Lending Platforms: Unlocking Credit Opportunities Digital lending platforms have disrupted traditional lending models, revolutionizing credit access for individuals and businesses. Using advanced data analytics and machine learning algorithms, these platforms assess creditworthiness efficiently, making the lending process faster and more efficient. As a result, underserved borrowers and small enterprises can now access loans that were once out of reach.

Open Banking and APIs: Fostering Collaboration The advent of open banking has transformed how financial institutions operate, fostering collaboration through Application Programming Interfaces (APIs). APIs enable secure data sharing between financial institutions and third-party developers, leading to an ecosystem of integrated financial services. This interconnectedness has enhanced customer experiences, enabling tailored offerings and fostering innovation in the financial space.

Cybersecurity and Fraud Prevention: Safeguarding Digital Assets As digital fintech continues to thrive, the need for robust cybersecurity and fraud prevention measures becomes paramount. Innovations in biometric authentication, artificial intelligence-driven anomaly detection, and blockchain-based security protocols are bolstering the defense against cyber threats, safeguarding digital assets and maintaining consumer trust.

In conclusion, the world of digital fintech is an ever-evolving landscape, where innovations continue to redefine financial services and create new possibilities. From seamless payments to decentralized finance, the latest advancements hold the potential to transform the way we manage our finances, ultimately shaping a more inclusive and interconnected global economy. As fintech pioneers forge ahead, the future promises exciting prospects and opportunities, opening up a world of financial possibilities like never before. europeanbusinessmagazine.com 87

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.

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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 89

New Initiative to Strengthen Cross-Border Investment in the Digital Economy 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 in 2020 and share the potential for 90 europeanbusinessmagazine.com

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 91

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: 92 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 93

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