Reasons for Brexit – Facts

Brexit analysis2

On the 23rd of June, British citizens were called to vote in a referendum. They had to decide whether to stay or leave the European Union. The result was “leave EU” and as soon as it was known, critics from around the world condemned this democratic decision and there were important repercussions in the financial, economic and political sectors. The sterling suffered a record one day plunge to a 31 year low; on Friday 24th the global stock market lost $2 trillion in value. The Britain’s Chancellor of the Exchequer, George Osborne, talked about the possibility to raise taxes as consequence of the Brexit result. After this extraordinary economic and political turmoil, a question came to my mind: “Is so bad and counter-productive leaving the EU, specifically for UK?”

From there, I started to investigate and analyze the findings.

  1. UK has never joined euro currency and this means that both people and companies will not face any specific or additional shock due to the going back to the previous currency.
  2. UK still remains geographically in Europe as banal as this can be.
  3. According to the “uktradeinfo” statistics (April 2016), UK economy is based on imports (http://bit.ly/1OVoCTJ). Indeed, on year to date, UK imported £75 bn from the EU and £72 bn from the extra-EU countries; whereas the exports were £45 bn from EU and £50 bn from Extra-EU and the trade balance is very under pressure today. From these data, emerge that is more likely that EU has convenience to keep UK in the union rather than let it go.
  4. The five major British trading partners are:
  • Germany, whose British imports exceed exports of £ 2.5 bn.
    • USA, this time exports exceeded imports of £ 1 b
    • Nederland, the UK imports exceed export by £1.3 bn
    • Switzerland, the UK imports exceed by £2.8 bn
    • China, the UK imports exceed £1.7 bn

5. According to UK government official statistics (http://bit.ly/1Oe5r5e), in 2015, Britain’s net contribution to EU budget was £8.4 bn (the gross payment was £ 17.7 bn) and the nation provided the 12.5% of the total EU budget (third contributor after Germany and France). This means that UK payed £8.4 bn in excess of what is returned from the EU.

6. Stay out of the EU means to stay out also by the european regulations, it also means that the UK is free to manage the taxation for companies (in particular corporation tax). For example, UK could reduce taxes for the big corporations and attracting their business and creating more jobs.

7. The pressure on the pound, which is reducing the value compared to the main currencies, it also increases the interest in the products and services produced in UK, making them more convenient to buy. This increases the exports and rebalances the trade gap. Of course this is not good news for European neighbors who have a competitor in more for exports.

8. Immigration. In Europe we have cases of countries with open borders for Europeans although not part of the ‘European Union’, such as: Switzerland, Monaco, Norway, Iceland, Andorra, Liechtenstein etc. and, trust me, Europeans have not issues to visiting or working in those countries. The UK is one of the leading countries of the European Union, which attracts immigration and this happens for several reasons. The main ones are: the English language (for studying purpose or because the majority of immigrants already speak the language and this makes it easy to look for work); culture, living standards and the quality and quantity of jobs available. Being part of the EU also means not having full control of immigration, this means that even if the economy is not strong enough to meet the entire unemployed labor force, it can not intervene on the influx of migrant. This has several effects on the population by increasing social unrest. In fact, more unemployed means reduction of wages, lengthening of time to find work and, in case of severe unemployment, even emigration.

9. From the diplomatic point of view, we can agree that the UK is second to no one. In addition, the main partner for exports are the United States, with whom they have an established and special relationship. In addition, UK still retains an important international role. For example, the country is a permanent member in the UN Security Council; It has one of the best military defense forces of the world and an efficient counter-intelligence. British companies are strong and have operations around the world. The financial sector is one of the best in terms of services offered, management and security assets. UK has important treaties, agreements and alliances with former colonies. Furthermore, they still keep their international role. For example, they have their seat as permanent member in the United Nations Security Council; they have one of the best defence force in the world and an efficient counterintelligence. The British companies are strong and have business around the world. The financial sector is one the best in terms of services offered, asset management and security.

10. UK is a multicultural society and London is a very efficient capital.

In light of the above analysis, my initial question becomes: “What has to offer the European Union to the United Kingdom to make the country stay?”. Someone mentioned that, being part of the EU, countries benefit of commercial advantages and conclude valuable international business negotiations. This makes me smile, because I wonder how it is possible that EU knows what is best for a country more than the country itself.

Personally I like the idea of being part of a great community like the EU because this increases the personal skills and interact with people with different backgrounds (although sometimes there is a price to pay). By learning from other people’s experiences we can make the world a better place to live, but the outcome of the British referendum says that there are also problems and people are dissatisfied. Therefore, now it is the time for European institutions to reflect on this result and take action as soon as possible in order to meet the demands of European citizens.

Brexit vote and Globalization

united kingdom exit from europe relative image
Source http://masterinvestor.co.uk/category/brexit/

In 1989, the Berlin wall came down and this was also the symbol of the establishment of the new economic world order. The idea was to remove the barriers that prevent the free circulation of goods and people. The European economists believed in this idea and in the resulting benefits from this and politicians implemented this model but paying little attention to the social aspects and consequences coming from this action. The main reason for this implementation was economic, of course (e.g. a bigger qualified labor market available for industries, no barrier for goods’ circulation and better trade agreements with extra-EU countries), and the companies were the ones that most benefit from this. A dream come true: companies got all the support they needed to produce in countries with low wages and sell the goods to the richest ones, making huge profits and paying less taxes. What about people facing this huge economic and social change? Were they prepared to meet and live with the new migrants and were they prepared to compete with more job seekers and probably with better skills that they have? Both economics and politicians believed that providing this new union with one common currency would give a huge advantage for any member of the community. Unfortunately, this has been an issue because: the conversion rate of the old local currencies with the new one was not fair for some countries (i.e. impoverishing some of them and making stronger others); European countries have different economies and they need their own currency to increase exports (e.g. currency depreciation) and optimize imports; states does not mutually support each others, this means whoever needs money has to borrow from central bank.

I believe that globalization has also some advantages especially: as peace keeper (because there is more integration between states and this means more options and opportunities for negotiations), wider free travel area; possibility to increase personal earning and enhances a wider distribution of wealth. Let’s talk about this last point because is crucial in this particular time we are facing.

The idea, for the industries, to relocate productions to countries more convenient in terms of taxation and wages gave the possibility to increase their earnings and created also better jobs in other parts of the World that usually have high unemployment rate and high emigration. Globalization is a revolutionary system, which push people, of mature economies, to reinvent themselves and improving their skills and competences because facing bigger competition.

The main point is that the industrial production shift happened really quick and people had not time to prepare sufficiently for this. Moreover, moving the production means move thousands of jobs (considering also all the small companies satellite of the main ones) and this is very difficult to fix in short time. This situation triggers nationalism and populism because people are scared, are unemployed and they understand they don’t have the same level of wealth they used to have before the current economic system. This situation intensifies the anger and frustration in the society.

People have never stopped giving his point of view about this new economic idea but sometime demonstrations became battle like in 1999 during the World Trade Organization meeting in Seattle. There was a huge protest against the globalization plan with many arrests and injured.

Globalization entails also that every country is connected and related each other. The collapse of the investment bank Lehman Brothers has formally started the World economic recession in 2008 for which, in 2016, we are still struggling with economic growth and fix the problems of that recession. The Brexit has influenced heavily the World financial markets with $2 Trillions lost on 24th of June. Wars and terrorist attacks do not impact one country only but all the World is interested. The wars at EU borders have caused huge immigration towards EU with no a valid and credible answer from EU.

Brexit was also a vote against the globalization, because people voted to restore and fully control their country again. Indeed, the main arguments of the Brexit supporters were:

  1. The EU threatens British sovereignty. The euroskeptics say that EU rules override national laws on important topics such as: competition policy, agriculture, and copyright and patent
  2. Immediate cost saving. In 2015, UK payed £13 bn and they got back only £4.5 bn.
  3. Complete control of the immigration. Under EU law, Britain cannot prevent anyone coming from a member state to stay and live in UK. This is also true for all the Britons that decided to move and live in warm place or benefit for studying or working. According to the office for National Statistics, in UK there are 942.000 immigrants from East Europe and 791.000 from west Europe. From outside UK the immigrants were 2.93 m (majority from China and India). According to the statistics, a part the recent flux of immigrant, the immigration has been positive for UK.

When the EU was established and former communist countries were integrated into the global model, the new integrated Europe aimed to protect its citizens against the worst excesses of the market because it was big and powerful enough.

The recent success of populist and extremists parties is also due to the belief that this new model of Europe has failed to deliver results. Indeed, jobs, living standards and welfare were all better protected before the age of globalization.

People believe that only an elite of them takes advantage from this new system and the rest of them pays the consequences of bankers’ failings.

Therefore, all of us should reflect on Brexit and, in case we want still embrace the current economic model, the system must meet people demands.

Can Artificial Intelligence steal jobs?

RoboticsRobotics and Autonomous Systems (RAS) is one of the ‘Eight Great Technologies’ identified by the UK Government in 2012 and under analysis to verify the risks and opportunities for the society and companies.

The popular belief is that these technologies will replace human’s labor in many tasks and activities because they are very cheap and provides satisfactory results. Before jump to conclusions, let’s evaluate if this belief is completely true.

We use this technology already when we use virtual assistant built in smartphones and driverless car technology. Besides, investments are made also to facilitate the work of professionals such as scientists and doctors primarily. Indeed, in hospitals around the world, surgeons are getting help from new robotic assistants.

According to professor Nick Jennings, chair in Artificial Intelligence (AI) at Imperial College London’s Departments of Computing and in Electrical and Electronic Engineering, the health care sector is where AI will bring more results in terms of efficiencies and improvements without put people out of jobs. In specific, AI helps to understand better the situations and facilitate the decision making process. He sustains that AI does not replace humans but work in partnership with them and make suggestions.

On this point I would like also adding that AI technology has been developed also to act because technologies recognize the situation and they can take the actions if programmed to do so.

Compared to humans, machines are able to elaborate millions of hypothesis and present them to scientists for a decision. Professor Nelson, from the Imperial College London, states: “The one fact that we have learned from the internet revolution, and the rapid deployment of computers, is that worries about large-scale unemployment have largely evaporated because other jobs have been created and that’s an important point to make”. In brief, if some jobs were lost others jobs would be created in their place.

For example, if a new technology is discovered and implemented in the society, this needs new qualified people (this means new jobs) for things like implementation and maintenance and, besides, this also reduce cost for companies. This mean more cash to reinvest etc.

Now, I have also say that the two comments above are the classic ones that suit and justify any technology progress. I completely agree and respect those but there is something more that sometime is never taken in consideration when new technology is used and made available for the market. Therefore, let’s consider also other aspect of this technology progress and in particular AI.

Today, the role of AI is mostly supporting people for decision making but combined with Internet Of Things we can also assume they will replace human tasks. As I said above, they also create more job opportunities but at what cost? There is always a time frame for people to recognize the risks and take the precautions. This means, if a new technology takes somebody’s job, this is never being recognized on time by the worker. This situation requires that he/she might needs other skills so this entails time to requalify the professional figure and find a new job. If the situation involves few hundred people, probably this can be easily managed by community. Unfortunately, I have not seen any quantification of the real impact on the job market. Moreover, we have to comprehend that the use of AI impacts all the productive sectors and all Countries and we also don’t know if the replacement will be gradual or aggressive.

Compared to other technologies, AI can be implemented and used at any level of the society and industry. With this I want to say that in the past any technology was created and used to improve the labor condition, making easy the hard work or replacing people in situation of danger. This pushed people to be more qualified and seek jobs with specific characteristics. In contrast, the use of AI challenges also the white-collar workers; this push people to see new jobs not only based on studies and qualification but probably find the way to benefit from them.

As for every big change, the education is the foundation of every decision. Know well the situation and the threat is fundamental to take the right decision.

How Artificial Inteligence can improve organisational effectiveness

organizational effectivenessIn modern world, the role of data in strategy, planning, and operations is a key competitive differentiator. Indeed, analytics already support critical decisions in sales, customer success, marketing and finance but data analytic has not a central role in case of decision for organisational effectiveness. This means they are not used to attract, maintain and motivate people or to improve people performance and manager effectiveness.

With current technology and findings, Data-driven insights could be also used reducing risk and driving success in decision-making for daily jobs and for any roles in the company and improving the entire organisational performance. Indeed, the role of Artificial Intelligence (AI) is acquiring, analysing, and providing output easy to comprehend for people and making easier the decision process.

For example, in case of HR, AI can find and provide valuable insights to HR (e.g. talent assessment, employee engagement, manager effectiveness), which could be missed by traditional procedure. In this way, HR can easily and quickly predict and understand workforce trends and problem areas; consequently, the organization will adopt the best solution to fix the issue.

In summary, the example above can be replicated for any company department. Indeed, providing AI to employee can optimize the effectiveness of the entire company with affordable cost.

Social Media and Company Awarness

Social Media and Brand awarnessIn the 1950s, for the media industry the television became a fundamental medium for advertisement. The consecutive half century, television commercials were almost essential for corporate brands for driving consumers and creating demand. With time, the advertisement industry has changed because the development of social media and because the consumers’ behaviour and expectations have also changed. Now these new media represent valid alternatives to reach and capture consumer interest.

Compared to traditional media, SM have different rules and method because now consumers can control what they want to hear and watch. Also for the ads, consumers expect authenticity and relevance from them.

This means that today it is more difficult establish the brand rather than the past because the brand reputation and offer value are essential and constantly challenged by the market.

I give few ideas how to establish and increase the brand awareness in the market:

  1. Use the SM platform that suits your brand.
    1. Facebook is one of the best platform for promoting brand awareness because it is very popular among people but the users base is too heterogeneous.
    2. Instagram is a great option for brands that rely heavily on images.
    3. Google+ can be a great SM for targeting men in the technology industry (most of the roles are in engineering or other technical professions).
    4. Pinterest, on the other hand, is valuable for targeting reach women, so this means that can be useful for brands selling jewelry or clothing.
    5. LinkedIn, also very popular and can represents a good choice in case of promotion of business-related content and connecting with other corporate influencers. 
  1. Use SM to distribute valuable content. Brand awareness increases if your brand’s name circulate in SM and has also good feedback from consumers. This means the published content should please to your average reader and be interesting in terms of content and for form used. In brief, try to use the following method:
    1. Provide only content that supports your brand image. Do not attempt to use form that cannot be easily understand by your audience. The effect will be opposite to what desired.
    2. Carefully evaluate the content form that most likely provides visibility on your social networks. For example, images may resonate better with your audience but offer less information than a blog posts.
    3. Visual content is very well perceived by viewers. Usually articles with images receive 94% more views. Twitter content with images receives nearly twice as many views as text posts.

Solar Impulse 2

Solarimpulse2I want write on something different of my usual SM topics because I want highlight the important attempt of circumnavigate the globe using an aircraft fuelled by renewal energy. Solar Impulse 2 is an aircraft which uses solar power to accomplish this mission.
It carries 2 pilots and the wingspan is slightly less than an Airbus A380 (world largest airplane for civilian use) and its weight is 2,3 ton (like a standard vehicle). The airplane flies day and night and its cruise speed is 49 kn (90 km/h) and 33 kn (60 km/h) at night to save power. The journey started in Abu Dhabi on 9th of March 2015 and it should conclude also there in few months (check news on http://www.solarimpulse.com/adventure).
“Solar Impulse”, the company behind this project, has a fascinating mission because it has the scope to proof the possibility to use solar power for transportation and, even if the aircraft had few breakdowns during its journey, the plan is still valid and on track.
The two pilots and company co-founders are Andre Borschberg, who is a Swiss business man and pilot and he earned 8 FAI World Records. The second pilot is Bertrand Piccard, who is a Swiss psychiatrist and balloonist. He comes from a family of explorers because the grandfather A. Piccard was a balloonist and the father J. Piccard was an undersea explorer. Bertrand completed a non-stop balloon flight around the world and now he wants complete the first round the world on a solar power aircraft.
The project has the scope to promote the use of renewable technologies and energy efficiency for a better quality of life. I believe that in few years from now, people will travel using sustainable transportation systems but for now this is still a challenge. Indeed, as Piccard said in an interview: “Maybe it will be boring in 20 years when all the airplanes will be electric and people will say ‘Oh it’s routine.’ But now, today, an airplane that is electric, with electric engines, that produces its own energy with the sun, it can never be boring”.

 

Selfie and Social Media

SelfieThe obsession for selfies is form of narcissism. In Greek mythology, Narcissus was the son of the river god Cephissus and the nymph Liriope and he was known for his beauty. He was a young man proud of himself and presumptuous who disdained people who loved him.
One day, Nemesis (spirit of divine retribution against those who succumb to hubris) noticed Narcissus’ behavior and led him to a pool where the young man noticed his image reflected in the water and he felt in love with that image. He was so attracted that he never detached from it and he died for staring at the reflection because he did not eat nor drink.
In SM era, the pool is represented by the cell phone with a camera in selfie mode. Taking selfie is a phenomenon in steady increase and very popular for millennial generation.
Self-esteem and narcissism are opposite for conceptions and behaviors. We feed our self-esteem with accomplishment; narcissism is the constant need of attention and praise due to low esteem and for this feeling narcissist tend to develop “superiority” through the exaggeration of own achievements and minimize others achievements and try to putting down possible rivals.
A Canadian study at York University, conducted on a Facebook users population of 18-25 years old, revealed that people who use Facebook the most have characteristics of narcissism and insecure personalities. The study revealed that it was very common to find trait of self-promotion (posting frequent picture of them-self and celebrity’s lookalikes, update frequently the status).
Some people truly believe that their friends and followers are interested in any single aspect of their life and for this reason they feel the urgency to communicate every emotion they experience. The answers they get contribute to recognize the sense of self-importance and egos.
SM have some very good benefits but, on the other hand, they make easier identify narcissists.

Internet of Things – Tipping Point and Opportunities

internet_of_things_overviewAs wrote in my previous article “Internet of Things – Risks”  (http://tinyurl.com/jp4hjg9), IoT will have a huge impact in our life and, besides risks, it has also benefit. IoT helps companies increase productivity, deploy new business models, reduce costs and support the development of new products and services.

Everyday more devices are getting connected to the Internet, for example: cars, thermostats, home appliances, medical equipments, vending machines, water meters and building security. All these devices, and many other under current developments, will transfer information between each other to facilitate our life (in theory).

IoT hardware infrastructure is based on cloud storage, data sensors, networks and this environment works with Apps and programs.

Let’s see some useful applications of this technology in daily life, considering for example two important locations: workplace and home.

In a smart factory, IoT improves the inventory management because the system manages independently the lack of supplies by sending an electronic purchase order to the supplier. Furthermore, it can determine quicker the level of production based on the sales at POS (Point of Sale). A smart device sends inputs to the drones for pickup and delivery of goods. In case of breakdown, the smart machine analyzes the issue and sends a request for maintenance (with an accurate report of problem) to the technician .

In a smart home, a central computer determines the actions for a “welcome home”  based on the settings. For example, it communicates with thermostat for the heating, switch on the oven or microwave with pre-made food in it and switch on the lights on the porch. It recognizes your car and opens the garage for you, raises the window blinds and deactivates the alarm system. The sensors installed in rooms notice the person presence and acts on the lighting. A facility panel can summarize, for instance, the consumption status of water, electricity, gas and it shows the level of security.

These progresses were possible due to different reasons, such as:  progress in computing, storage and analytics; increase of mobile devices usage and technology cost reduction.

I expect more usage of  IoT in coming years and it will be part of our daily life. This means that now the game to become leader in the sector is open. The market value was $655.8 billion in 2014 with a projection of $1.7 trillion in 2020 and a compound annual growth rate (CAGR) of 16.9% (souce IDC, http://www.idc.com/getdoc.jsp?containerId=prUS25658015).

More players will join this table, for example ones which build and sell appliances because now they have the opportunity to expand their business with IoT solutions.

Consumers will appreciate other benefit, for example improvement of energy efficiency, costs reduction (E.g. automation of work place), service improvement and management (e.g. healthcare system, transportation and purchase of goods and services).

I conclude saying that we are only at the beginning of this technology but IoT implementations are quite promising.

Internet Of Things – Risks

IoTIn 1982 a modified Coke machine at Carnegie Mellon University became the first device connected to the Internet. It was capable to provide the first information to users such as the inventory and the temperature of the new loaded drinks.

Since that day, technology made important discoveries and developments; for example today is possible to manage the house thermostat and heating an electric car on remote using an App.

Internet of Things (IoT) will be more present in our homes. Indeed, recent technology developments will lead to new innovations such as: contactless sensor systems for large areas, which track people’s movements and are capable to switch on and off lights in rooms or opening doors for us. Furthermore, Samsung announced the project for transparent touch screen to replace window glass, etc.

The aim of IoT is to increase our quality of life but at what cost? In brief, IoT is the network of physical smart objects (e.g. devices, buildings, vehicles), it captures data (human behaviors) and it takes actions based on settings, programmed by users. With the present speed of innovation, people will rely even more on IoT  for their daily needs. We are making less things by our self and we use someone else workforce or using products ready but why? After WWII, and for many decades, it was a common practice to self-build the house with help of friends and family but we lost this and today the majority of people prefer use a mortgage (in the worst-case scenario stay in debt for 35 years with high rate) and buy from a builder a “ready to go” product. I remember, my grandmother she used to cook everything by herself, making extraordinary food and cakes. My mother did the same but we lost something after this generation. Today it is common practice buying pre-made food because we are too busy with other stuff, we use housekeepers (for who can afford) because we are too busy with other stuff, we use baby sitters because we have important stuff to do, etc. Nowadays, we use technology because, in theory, it gives more free time but still I hear people saying they do not have enough time for themselves. We rely on technology because it cannot be wrong, indeed it executes our orders and it is reliable for delivery.

The interesting part of all these technology developments is that humans give up their expertise and rely on something else and with this delegation they lose the control of decisions and of the actions. Imagine what could happen if just the traffic lights of our city were faulty; would drivers still able to drive or it would generate a chaos? Major cities are implementing smart traffic lights capable to switch to green light or to red light based on the cars in line.

IoT includes the exchange of information between smart devices and for most of the times this happen without user knowledge. This information is digital data that create a security problem: who can access these info and for what purpose? Indeed, smart-buildings and smart-devices, even if they are intelligent objects, could still become vulnerable to sabotage. Today, hackers can steal personal information but what would happen if the house is completely automated and intelligent?

Artificial Intelligence and Healthcare

helthcareArtificial intelligence (AI) is becoming an intriguing argument and businesses are interested because the innovations and benefit it provides.

According to Frost & Sullivan, the AI healthcare market earned $600 m in 2014 and this will go up to $6.6 b in 2021.

The shift to a value-based reimbursement model in US and UK (providers are not paid by number of visits and tests but on the value of care they deliver) will push to find new way to increase efficiencies and improve patient outcomes.

AI (with cognitive solutions) can help hospitals elaborating patients’ data and prescribing the right treatments and cures. At this stage, AI has a role of support for physicians and not replacement of them (I have my doubts in case of further progress with this technology). Indeed, cognitive computing has a role of elaboration of big data and presentation of solutions and information; for example, doctors use cognitive applications to analyze thousands of cases and articles and choose the best one for a specific situation.

AI is not only about diagnosis and treatment but can help also with disease management, clinical trials, wellness and reimbursement because the facility to elaborate, compare and provide with effective solutions.