Mike Vickers' Blog

December 24, 2014

Corporate Power and Our Information

Filed under: Business Development, economics, History in the making — derryvickers @ 9:11 pm

 

Corporate Power – Leader Guardian Weekly 19/12/14

‘Democracy can battle back

In this early 21st century, we are bedeviled by size. Economies of scale have allowed firms to grow until they straddle the globe like colossi, beneficiaries of the last century’s turbocharged capitalism. But it is the sheer expanse of those companies, how they consequently behave and how that affects the countries and continents in which they trade that cause disquiet. Of the top 175 economic entities in the world in 2011, whole nations included, 111 were giant corporates

Giant firms, reluctant to have their territo­rial ambitions or profit potential curbed, will deploy lobbying and sharp PR to persuade lawmakers to think otherwise. They make menacing virtue of their multinational struc­tures, threatening uncooperative states with taking their business elsewhere. The result is a source of power that has grown beyond democracy’s reach.

In the real-life face-off between the democratic David and the corporate Goliath, David can look puny indeed.

And yet – then as now – Goliath is not invincible. First, governments already possess many powers that they shrink from using. They could smash monopolies and force firms vying for public contracts to pay a living wage. They could, if they wanted, reform political funding and get a regulatory grip on the lobbying that leads to warped laws. Just as governments have imposed freedom of information on themselves, they could – in principle – shine a light behind the corporate veil. They could also, between them, agree that taxes will be calculated on where sales are made, not where profits are reported.

The status quo endures because there is, at present, too little incentive to assault a system that allows companies unquestioned freedom and unfettered prospects for enrichment. And then we come back to the intimidating scale and the accompanying complexity.

These forces for inaction may yet prevail, but let it no longer be said that alternatives do not exist.’

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I have picked up this Leader from the Guardian Weekly 19/12/14. It confirms my view that democracy is under threat from the Global Corporates. The Leader suggests that Countries may battle back. But as the Leader also suggests there has to be a will to do so. I attach a table of the top 10 global Corporates in the Fortune 500 and it is clear that half are petroleum companies; this does not auger well for cutting global emissions. Taking Royal Dutch Shell as an example; they spent $14m in 2011 and 2012 on lobbying although this has dropped to $6 m this year.

http://www.opensecrets.org/lobby/clientsum.php?id=D000042525&year=2014

I cannot comment on Walmart but ASDA is a very major player in the UK supermarket world and there are articles on the web referring to ASDA’s lobbying activities.

Likewise global Corporates are agile with moving their money around to minimize the tax they pay in any country; witness  the call to account by the UK Public Accounts Committee of Amazon, Google and Starbucks; not that any of their tax maneuvering were unlawful in the UK, rather there is still no agreed Global law sufficiently tight to constrain these Corporates from moving their revenue to countries where they pay less tax. Equally Apple affords itself of flexibility in the Eire business laws and funnels all its European revenue through a ‘cottage in Cork in the west of Ireland’

http://www.theguardian.com/technology/2013/may/29/apple-tax-profits-ireland-cork

For the Global revenue position of these Data Handling Corporates see the 2nd table below; comparing these with the top 10 Corporates, Apple is the biggest and is ranked 15 in the overall Fortune 500ranking.

However what the article does not tackle is the sheer volume of personal information that such global Corporates hold about all of us. Zuckerberg of Facebook has announced that he will not be satisfied until every citizen in the globe is registered on Facebook (TIME, Dexcember 16 , 2014). Equally concerning is the scope of data on our lives, our habits and our foibles handled by Google, Amazon and Microsoft.   This data now goes under the name of ‘Big Data’ and is apparently being trawled by the US National Security Agency (as disclosed by Edward Snowden) and I would suspect by the UK GCHK. These Global data information handlers say they the data is ‘secure with us’ but what guaranty do we have? On a much more minor scale Tesco know precisely what products I buy and targets me with personal savings on these products. I also noted that when I surfed the web for a new PC, for several days afterwards the sides of my screen were plastered with PC adverts from the companies I had looked at – I have now bought a new PC and the adverts have now abated.

For me the key point here is that these large data repositories are in the hands of global commercial Corporates and what guaranty is there that the information stored about me is not sold to other companies who may have fewer scruples about making commercial use of my data to my detriment. The watch word of course is be very careful as to what I make available about myself and my thoughts on the web.

_____________________________________________________

Global Companies

1 Walmart  United States Retail $476.3 billion
2 Royal Dutch Shell  Netherlands  United Kingdom Petroleum $459.6 billion
3 Sinopec  China Petroleum $457.2 billion
4 China National Petroleum Corporation  China Petroleum $432.0 billion
5 ExxonMobil  United States Petroleum $407.7 billion
6 BP  United Kingdom Petroleum $396.2 billion
7 State Grid Corporation of China  China Power $333.4 billion
8 Volkswagen  Germany Automobiles $261.5 billion
9 Toyota  Japan Automobiles $256.5 billion
10 Glencore   Switzerland Commodities $

 

 

Largest Computer Companies – Many handle our data

Company name       Sales (US$ million)

Samsung 212,680
Apple 170,910
Foxconn 132,070
HP (Hewlett-Packard) 112,300
IBM 99,750
Hitachi 87,510
Microsoft 86,830
Amazon 74,450
Sony 72,340
Panasonic 70,830
Google 59,820
Dell 56,940
Toshiba 56,200
LG 54,750
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August 7, 2014

Business for Scotland – A Conference

Filed under: Business Development, Politics, Scottish Independence — derryvickers @ 8:33 pm

 

I attended a conference on Business for Scotland held at Dynamic Earth on 05/08/14.  I understand that Business for Scotland is non-political but the whole tenor of the Conference was to encourage a Yes vote.

The topic was why Scottish Business should vote Yes for Independence..

Iain MacWhirter was in the chair and he stressed the conference was to look to the future rather than to rake over the past – though this was not always kept to.

The highlight was a talk by Alex Salmond; he was in ebullient form despite his somewhat gruelling session the evening before with Alistair Darling.  One of his themes was women back to work through better pre-school – it wouldn’t happen till after independence as 80% of the tax return would go to Westminster – taxation is one of the levers of power that must be repatriated.  Another theme was that Scotland has five great universities but there are insufficient jobs so the graduates just emigrate – where have I heard the brain-drain before! Growth in Scotland has only been 2% rather than 2.5% for the UK as a whole over the last 50 years.  Interestingly the longest time scale into the future he referred to was 10 years. And the shared Pound was not mentioned. (This was the first time I have heard Salmond speak in person and he speaks very well without notes;  the only oddity was except where he was answering a question from the floor he was repeatedly looking sideways at the wall).

Graeme McCormick talked about the domestic housing market.  He said Helensburgh has lost 2000 inhabitants in the last ?5 years; he commented that Faslane employment doesn’t help Scotland; the 2,500 employees decamp across the border at weekends and all their provisions are on-site.

Philippa Whitford gave a good emotional speech on what would happen to the Scottish NHS when the English move further to private provision – Scotland would inevitably get cuts through the Barnett formula – and we would inevitably be pray to the US Insurance Industry.

Tony Banks – chair of Business for Scotland and in the care business took up the theme of austerity affecting too many people’s lives and deplored the need in Scotland for ‘food banks’, a need not needed since 1948.  He is keen on the legal introduction of ‘homesteading’ as a way to get people into working for themselves – legal as it would require compulsory purchase of land. The Germen Mittlestand approach also came up and I discussed this with him in the short networking session after the meeting closed.  We both agreed that keeping business in the family is a better way forward and away from just building the business then selling out while the going is good.

On Business itself there were talks on the Scottish ‘Brand’, the success of the food industry and deploring the fact that Scotland has no large companies;, not only for itself but the fact that large companies are a source of bright spin offs.  Taxation was only just touched on as the session on it had to be abandoned as Salmond was late and overran but where it was, it was how to use taxation to foster incubating new businesses.

Martin McAdam stated that 50% of Scotland’s energy now comes from renewables with 2/3 of that from wind – renewables already employs 12,000.  Oil and Gas should be seen as bridging the gap until renewables completely take over and for funding the development of different forms of renewables.  He considered that it won’t be too long before wind becomes as competitive as gas.

Grahame Blackett quoted that, despite the common perception, private industry in Scotland employs 2020,000 staff while the public sector employs only 521,000. He listed the products that Scotland exports as Renewables, Oil & Gas, Food, Asset management, Tourism, Life sciences and education.  But he also listed areas that an Independent Scotland would need to face up to as: Infrastructure, Exports, Joining the Nordic Council, Targeting aging, Sourcing long term capital, and coming out with a package of tax reforms.

Carol Fox talked about the need to properly integrate women into the workforce.

Gordon MacIntyre-Kemp bemoaned that fact that 80% of private new jobs are in London.  That Scotland has a debt of £72bn accumulated over ?3 years while it should have accumulated a surplus of £50bn.  Once Independent, Scotland should be growing at 5% per annum.

To my hobby horse – localism did get a mention in passing – I tried to raise the matter with Iain MacWhirter afterwards but he failed to bite.

I came away having not heard much new but with a couple of  thoughts,

  • The referendum debate is still grounded in the next 10 years – just renewables may be recognised as having a longer gestation
  • the drive for independence is less to do with splitting from the UK as a whole but from splitting from Westminster. A couple of barmen I spoke to in one of the tea breaks put it this way if Scottish Government is only 5% better than Westminster it’s worth it; it can’t be worse. Let’s hope that Holyrood in the years to come doesn’t just replace Westminster.

Finally the conference was about not just business in Scotland but business in Scotland with an ethical face – this is good.

November 18, 2013

Supply-side position in the UK – a seminar by Nick Crafts – 14 November 2013 at the DHI

Filed under: Business Development, DHI SPIF, Politics, Scotland — derryvickers @ 7:34 pm

‘What kind of Supply-side policy for the UK and What implications for Scotland ‘

Nick Crafts is Professor of economics and economic history at Warwick University and appears to have advised many organisations across the world.

His lecture was interesting and much of his slides can be found at the following website

http://www.res.org.uk/SpringboardWebApp/userfiles/res/file/res_policy_slides.pdf

No doubt they will appear on the DHI website in due course.

Crafts covered a lot of ground and the points that got to me were:

  1. Industrial growth can be either sector based or horizontally oriented.  The UK has been best recently at horizontal and Crafts picks on Pharma, ICT application and finance as success stories
  2. Growth particularly in ICT has been by best application of other peoples innovations (mainly I suspect US).  In this respect Germany has not been nearly as good.
  3. What drove the 1900th century was Steam – ICT is driving the 21st.
  4. UK investment in Rand D is the worst in the western world. We are relying on Diffusion.
  5. Likewise development in Human Capital has been pretty low.  Crafts certainly gave the impression that education should be skills based.
  6. Inequality is growing; but exclude the 1% very rich – their wealth comes from the globalised capital markets not individual counties.
  7. The bigger the city the higher the output.  But this leads to urban difficulties and welfare loss.
  8. The UK has been bad in investment in infrastructure – roads are a prime example.
  9. Public capital should complement private capital.  Banks need to be the source of private capital.  He featured Germany.
  10. Private capital is short term but Government is worse.  Long term investment is needed on the supply side.
  11. Incremental steady investment.
  12. Productivity is difficulty to measure – not like in the past, coal dug per person in the pit.
  13. Regulation can encourage but can impede – regulation of land in England
  14. Don’t look back to 1970s; Save the High Street is doomed.  HS2 is vanity – remember Concorde.
  15. Tax revenue should come from general taxation on consumption rather than from industry.
  16. The UK is good at the service industry; even Rolls Royce was more value coming from the supply side than from the engineering.
  17. As to Scotland – Scotland should focus on the horizontal industries.
  18. Scotland is higher than the UK as a whole in service industries.
  19. The Celtic Tiger got it right before the crash with its low corporate taxation.
  20. Edinburgh is the 4th most prosperous city in the UK.
  21. Regulation can be a stimulus to innovation.
  22. Don’t yearn for the 1970s.

I found this all good stuff but I feel that Crafts time may well be fading as he considers the 1970s have faded.
Western civilisation is realising that continual growth may no longer be achievable and should not necessarily be the target for a future Scotland.

July 28, 2013

Good to get people back into the Highlands

Filed under: Business Development, economics, Politics, Scotland — derryvickers @ 7:39 pm

Alf Young in his recent article on a visit to Kilmartin Glen in the Scotsman decries the situation where the only visitors on a hot summer day were a few Europeans and a solitary Scot.  Kilmartin Glen is one of the richest glens archeologically in Scotland with cist graves dating back to 2000 BC.

http://www.scotsman.com/news/alf-young-welcome-to-the-land-politics-forgot-1-3017590

He also makes the point that the region is slowly depopulated – particularly the young.  Scotland as a whole is slowly growing but not the west, See

http://www.scotland.gov.uk/Publications/2008/07/29142448/3

Andy Wightman in contrast decries that fact that the Scottish Highlands are owned by just a few landlords whose ancestors have in the nineteenth century acquired the land as one acquires works of art – and the land now needs to be made available to the Nation in some form.

These two factors are in apparent contradiction.  No point in the Nation taking over the Highlands if there is no one wanting to live there.

It’s like the US and the British overthrowing Saddam Hussein with no idea what to do with Iraq once he’s gone.

I therefore suggest that the priority is first to give reason to the people to want to re-populate the Highlands.

Comrie is a good example of a Community Development which has got to grips with itself

http://comriedevelopmenttrust.org.uk/

But it is unique.

If we are to take Kilmartin Glen as an example of the Western Highlands then there needs to be modern amenities.  Alf Young points out that Internet is poor and there is no mobile comms – now considered fundamental to young people.

What possible opportunities are there for Kilmartin?  There has to be tourism – 4000 years of archaeology and my own experience there is no lack of facilities for the tourist to explore the archaeology.  But clearly this is not enough.  It can’t be agriculture; the glen is not suitable for modern agriculture.  What about high tech businesses? – small transport costs – lovely setting far from the crowded expensive cities – I remember a guy who used to build fish farm feeders on Skye, another who was technical director for a word processor company in the US.  But these do need the Internet and the Scottish Government has plans, but most of all the Scottish Government needs to go out and sell the opportunities not only to the Scots but to the English and even in London and High Tech Europe.  It needs to bring the venture capitalists on board.

Given the demand for land for development there will be a way to wrest it from the landowners.  As a start the law already gives Communities the first call on the right to buy when landowners seek to sell.

May 2, 2013

Possible Orkney

Filed under: Business Development, economics, Europe, Scotland — derryvickers @ 6:48 am

A presentation by Graham Hogg and Alex Hobday postgraduates at Strathclyde on Orkney in ?50 years – The last of this year’s Nordic Horizons

First – good that it was held at the Scottish Parliament – lots of MSPs and like bodies attending.

Second I was horrified that what they were proposing was to turn Orkney into an industrial site

A  little detail of their proposal:

  1. A northern city distributed round the Scapa Flow linked by a light rail – Population to grow from current 20,000 to 100,000
  2. Supporting a massive container transhipment port
  3. Providing marine supply and services for marine renewables
  4. A link to the North Sea Power Grid with a connecting point to Iceland geothermal power
  5. Not an instant development – over the next 50 odd years
  6. The north of Orkney to be left alone.

The rationale

  1. Orkney at the cross roads of shipping between UK, Europe and the Far East and America– A European Singapore.  The Far East via the North East passage north of Russia
  2. Scapa Flow ideal harbour demonstrated through two world wars
  3. Marine renewables in the Pentland Firth and further afield
  4. Orkney has always been a stopping off point since the beginning of time
  5. More generally commerce is moving North

The arguments against

  1. Orkney is a green and fertile land – let’s keep it so – products should be food not containers
  2. The bottom has dropped out of the Shipping market
  3. In any case the North East passage to the Far East is dangerous and long.  Ice breaking container ships need nuclear power plants as there are few bunkering points across the north of Russia – ice bergs the size of Jamaica – rum does
  4. The Icelanders have been here before and they recognise if the container port is to come it will be no earlier than 20 years and why not Iceland anyway. Narvik is better situated vis the North East passage

The arguments for

  1. Orkney ideal for servicing the UK east and west by boat at lowest energy cost
  2. Orkney would welcome influx of new people having lost many since WW2
  3. Orkney has the will to drive it forward

Other discussion

  1. A container port of the size envisaged can only be funded by a national government
  2. If only half to go ahead it should be the renewables half
  3. Orkneys ideal as a centre for search, rescue and marine security
  4. What about the Ferries
  5. Marine Cross Party Committee needed in Holyrood – Scotland should renovate its maritime heritage
  6. Control for the foreshore should be rested from the Crown Estate Commission whether Scotland independent or not
  7. The Nordic Council is becoming the Arctic Council – Scotland needs to join.

But thinking again about Orkney – it has been continuously inhabited since 3000 BC – Skara Brae – and the recent digs around the Ring of Brodgar may put the date back still further; so I’m sure that if this development were to go ahead Orkney would still survive as a place to go to see and glory at 6000 years of human history.

So let’s hope the lads get an audience with Alex.

December 24, 2011

Linlithgow – The Wallace Lands Proposal

Today it is Christmas Eve – good will to all men (and women of course).  The discussion on the Wallace Lands proposal  is now at 117 contributions  – a very fair number for a Linked-In Group (though still far short of a Leaders a& Thinkers group that I subscribe to that is up to 2968 contributions) and it may be worthwhile taking stock. Sorry my stock taking – you may disagree with it but then it’s a time of good will to all men!

  • Wallace Lands has parachuted in to develop a piece of land situated at Junction 3 on the M9 motorway.  Jason Wallace at a discussion with the Civic Trust made no bones about it; they are in to make money and that’s why they chose Linlithgow – not Winchburgh or Whitecross but Linlithgow – it’s a desirable place for middle class people to take up roots in central Scotland, not least because there’s a great free academy, it’s in easy commuting to Edinburgh and the airport
  • The proposal is not as Boghall east, just a retail park centred on a smallish supermarket but a whole development – retail park with larger supermarket and 600 houses in two phases.  The proposal would in effect create a suburb of Linlithgow analogous to Linlithgow Bridge
  • There is no doubt that the proposal is contrary to the existing West Lothian Local plan which has Linlithgow as an area of restraint.  The SESPlan has at the request of the Civic Trust removed the word ‘restraint’ ; but as Alan Brown points out restraint remains until the new Local Plan is approved which is not due till 2014 at the earliest
  • Another aspect that has been touched on in discussions has been that any such development at Junction 3 would stand out on the horizon.  Fortunately or unfortunately Linlithgow is constrained between the Bathgate Hills to the south and the Flint Hills to the north and without very careful planning any new development is going to be obtrusive
  • A key aspect of the proposal is the making of junction 3 up to four way.  Wallace Lands sell this as a benefit to the whole Linlithgow community but it would seem to be a necessary component of their overall proposal.  Jason Wallace stated that making up the junction is planned for the start of the development – but this contrasts to the item in the SESPlan for the developer to undertake it in 2025
  • Wallace Lands make the case that their development would be advantageous to the Town as a whole with 600 more residents to boost the economy.  This is unproven.  They also state that the proposal will generate jobs both during the development and in the Retail park once the development is complete; this is clearly true but whether these jobs are jobs for the local residents is again unproven
  • Jason Wallace at the meeting with the Civic Trust tabled a paper comparing their proposal with the Civic Trust Vision for 2010 -2030 with the intention of bringing out the similarities and there are undoubtedly some.  The Civic Trust vision recognises the inevitability of continued development of the Town; hence the removal of ‘restraint’ from the Local Plan, and this includes some houses at the east end of the Town.  The Vision also recognises the need for a new primary school in the area which the Wallace Proposal skates around.
  • However the Civic Trust Vision is for a controlled development throughout the whole of the Town and this is in contrast to the Wallace Proposal which is localised to the area round Junction 3.
  • A key unknown is the effect that a new supermarket at Junction 3 would have on the existing Tesco supermarket at the Regent Centre.  The assumption of most discussion items is that Tesco’s would vacate the Regent Centre losing an important anchor in the High Street.  Alan McMaster argues that the anchor is of no import – the ground could be cleared and converted into a nice park area with car park which would open up the High Street and the Palace to a wider visitor public.
  • So far as I have gleaned until very recently there have been few contributions as to what we hope for for the High Street and this reflect s back on what we hope for the future of the Town itself.  It is clear that the Civic Trust is right, even in these financially strained times, the Town will develop as witnessed by the enormous effect being put in by Wallace Lands to get buy in from the community for their proposal.
  • An informal meeting of Wallace Land Linked-Iners met last week to consider not only consider the Wallace Land proposal but also the more general development of the Town and future meetings are planned.  In parallel John Aitken, Chairman of the Civic Trust has offered to coordinate community views.  Some coming together would be advantageous
  • Alan Mitchell has made the comment that Wallace Lands has every right to make their proposal, as has the farmer to get the best price he can from the sale of his land.  That is the capitalist society we live in.  And while the Wallace Lands proposal is contrary to the Local Plan, I understand it is the duty of any Planning Authority to take forward planning applications rather than to sit in judgement on them – it is up to objectors to object if they wish.
  • A number of contributions have made the case that the Wallace Lands proposal will be limited to seeking outline planning application.  Given approval Wallace Lands will then seek individual developers for the supermarket, the hotel, the houses etc and whose individual objectives we are likely to have less influence than on Wallace Lands itself.
  • At this stage we await the formal planning application by Wallace Lands and once made it is up to all of us to review the application in detail and make our own submission to the Planning Authority.  It is clear that the Wallace Lands proposal has been well thought out as a commercial development but is it the right plan for Linlithgow as a thriving town?  I suggest the  Civic Trust’s Vision is more in keeping with the Town as it is, but the Civic Trust does not fund raising powers on its own.   And would the Town be worse off if only part of the Wallace Lands plan were to take place? (sorry I have lost that contribution)

Happy Christmas to all contributors.  The New Year will be very interesting for the Town.

November 1, 2010

A way forward for micro businesses?

Filed under: Business Development — derryvickers @ 4:54 pm

Lesley Riddoch provided a good article to Monday 1 November’s Scotsman titled ‘Small wonder big business is so hated’ in which she expressed the view that executives in large corporations are grossly overpaid and that we in micro businesses are getting tarred with the same brush.  She defined micro to be no more than 10 people.  She suggested that executives’ salaries of large corporations look to be paid more on the number of their employees and less on their accomplishments.  Ha-Joon Chang in his book ’23 Things they don’t tell you about Capitalism’ considers executives are paid in line with shareholder value and that shareholder value has been driven up by raiding a corporation’s assets.

Either way.   

Executives are usually paid by their corporations, unlike us small business owners who do not get paid other than through doing good business with our clients.  For good business, our clients need to feel that they have got good value for their purchases or our services and we need to earn a reasonable fee.  Big businesses don’t appear to need to keep their clients happy or satisfied – in many cases they have little competition or their clients are so constrained that they are unable to go elsewhere.

Our  company, Vickers Projects,  is on the Public Contract distribution list and to me micro companies are at an inherent disadvantage – we are micro – we cannot easily provide glowing balance sheets for the last 3 years, we are unable to go for the larger jobs where Public Contracts generally exclude companies where the job size is > 25%  of the turnover, we don’t have the resources or the time to fill in pages of politically correct statements, know all the legal niceties and we are not all-encompassing.

It is now time for micro businesses to come together in partnerships to tender for such public contracts so that we can present a wider experience base and share the pain to get the rewards. 

No I don’t see us aiming to become large corporations by this means and I would certainly not want to, but at least we could become mighty micros!

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