Business for a New Group. a pro-European think tank has published a report I wrote on the depth of integration between the UK and the other 26 EU members. Here is the summary and a link to the full report…
On 1st January 1973, the UK joined the European Economic Community, the forerunner to today’s European Union. 2008 therefore marks the 35th anniversary of British entry into the EU, and with any anniversary, it offers the opportunity to take stock.
Since 1973 Britain has changed in so many ways, and EU entry has been a vital ingredient in this changing picture. In this 35 year period, the economic and cultural linkages between the UK and the rest of Europe have grown and been strengthened. Businesses, their employees and consumers have made huge and irreversible gains from Britain’s membership of the EU.
“We are all Europeans now” highlights the growing integration between Britain and the rest of Europe. It maps the economic and cultural linkages between the UK and the rest of Europe.
Some of the trends it identifies include:
• Europe accounts for over 55% of the UK’s total export market.
• British firms sell more than £200bn of goods and services into the single market – equivalent to some £550m every day.
• More than 750,000 British companies are estimated to do business with the rest of Europe
and more than 3 million jobs in the UK are linked to exports to Europe.
• Several British companies from the airports operator BAA to Abbey National to mobile
operator 02 have been taken over by “European companies.”
• European M&A activity is very high – in 20006 54.6% of the £77.7bn worth of UK
companies taken over in 2006 were by fellow European companies.
• All the major continental banks have major HQ in London, including Deutsche Bank,
Commerzbank, Credit Suisse, Dresdner Kleinwort, BNP Paribas and UBS.
• Immigration of skilled workers from old Europe and less skilled ones from the accession
countries has boosted the British economy, lowered inflation and added to the Treasury’s
coffers. Between May 2004 and June 2007 683,000 people from the A8 nations registered to work in the UK.
• As many as 1.6 million British people live in other European countries, either for work or in retirement. Spain is home to at least 750,000 Britons and France to at least 200,000.
• Thousands of British students have taken part in university exchanges, with more than 7,000 students from the UK taking part in Erasmus exchanges in 2005-06.
• 50 million visits by British people to mainland Europe were made in 2006 precipitated by the expansion of low cost airlines.
• British sport has benefited from an influx of Europeans, not least in football, where 57.7% of players in the Premiership in the 2005-6 season were from Europe and the rest of the world.
• English, spoken by 38% of Europeans, is the most widely spoken foreign language
throughout Europe.
Many of the links are quiet and some are even hidden, but the UK’s has become increasingly influenced by Europe. That does not mean that the job has been completed – it has not and there is much more than can be done to increase integration and reduce further the barriers to the free flow of goods, services, trade, investment and people throughout Europe. On the UK’s 35th anniversary we can reflect on some of the ways life has changed in the UK as a result of closer economic and cultural integration with the rest of Europe.
http://www.bnegroup.org/info/we_are_all_europeans.pdf
January 18, 2008
Happy birthday, Clarity Economics!
The first anniversary of Clarity Economics and of my going freelance fell on 14 January 2008. Here is what I wrote a year ago as I faced in my small home-office…
It was an overcast, rainy January Tuesday but as I biked fast along the towpath of the Grand Union canal through east London I was determined to burn into my memory as much as I could. After almost a decade of riding to work, first in Canary Wharf, and later on the Isle of Dogs this was certain to be my last bike ride – at least at this time in the morning. I had to relish every moment of that journey.
After more than 15 years of working in offices across the country for other people I was about to establish my own identity. At the end of tomorrow I would check in my status as an employee at the front reception, walk through the automatic doors for the last time. I was hardly the first person to jack in a job, even a well-paid one, but for me a conservative-with-a-small-C person this was a major change in the life-plan, possibly even the DNA. I was pre-programmed by an upbringing in suburban south-east England to aspire to a job as the highest form of status. Self-employed people were builders and shopkeepers, enuf said.
So I looked around as I hurtled down the 20-odd miles between Gospel Oak and Isle of Dogs – two exotic and evocative place names that could only be found in London. Perhaps unsurprisingly I thought of what had gone. The derelict bridge over the canal in Hackney onto someone had risked their life to spray on the words “Free Reg Kray.” The words mysteriously disappeared after the gangster’s final lonely death in Broadmoor prison. The bridge itself has now gone to be replaced by a shiny new crossing.
Old warehouses that used to hold car boot sales have made way for blocks of flats, as have several of the waste grounds that backed onto the canal. A lock keeper’s house had been converted into a home with a giant rhomboid living room attached to the Victorian original. Once ignored as a messy route for freight between the Docks and the Midlands, the canal is now an asset for a estate agents, offering picturesque riverside views for new buyers. Everywhere change is evident yet at the some time some things are wholly unchanged from when I first started biking that route. A jerry-built slide at the back of an estate that allows kids to hurl themselves into the canal is still there in the face of health and safety capos. One of the lockgates has carried the graffito “Go Vegan” for as long as I can remember.
But if 10 years’ time what will the canalside look like? Where will I be in 2017? Three months ago when I handed in my notice it seemed much clearer. I was already pulling in some freelance work and would probably pull in more once I’d left. Of course I only stopped worrying about the financial aspect of the move in the last few days before I quit. Suddenly I was very aware of how supportive the office environmental could be – even one as dysfunctional as mine. My fellow workers on our six-person pod, the regular tea runs – “don’t forget I take skimmed milk” – at 4pm and the general office badinage would be hard to replace sitting in my spare room sitting alongside the drying clothes on the clothes horse.
But hanging over all of this was the whole idea of identity. My business cards said I was something important sounding for a well-known company. If I called people they were likely to respond positively to who said I was. Once I’d left would they still. How would I introduce myself? “Hello this is Phil Thornton, ex- of the …” “Hello, this is Phil Thornton. I used to be…” How long will it be before I say: “This is Phil Thornton of Clarity Economics…”? I guess that realising that you are what you do rather than what you are called is the great workplace revelation.
It was an overcast, rainy January Tuesday but as I biked fast along the towpath of the Grand Union canal through east London I was determined to burn into my memory as much as I could. After almost a decade of riding to work, first in Canary Wharf, and later on the Isle of Dogs this was certain to be my last bike ride – at least at this time in the morning. I had to relish every moment of that journey.
After more than 15 years of working in offices across the country for other people I was about to establish my own identity. At the end of tomorrow I would check in my status as an employee at the front reception, walk through the automatic doors for the last time. I was hardly the first person to jack in a job, even a well-paid one, but for me a conservative-with-a-small-C person this was a major change in the life-plan, possibly even the DNA. I was pre-programmed by an upbringing in suburban south-east England to aspire to a job as the highest form of status. Self-employed people were builders and shopkeepers, enuf said.
So I looked around as I hurtled down the 20-odd miles between Gospel Oak and Isle of Dogs – two exotic and evocative place names that could only be found in London. Perhaps unsurprisingly I thought of what had gone. The derelict bridge over the canal in Hackney onto someone had risked their life to spray on the words “Free Reg Kray.” The words mysteriously disappeared after the gangster’s final lonely death in Broadmoor prison. The bridge itself has now gone to be replaced by a shiny new crossing.
Old warehouses that used to hold car boot sales have made way for blocks of flats, as have several of the waste grounds that backed onto the canal. A lock keeper’s house had been converted into a home with a giant rhomboid living room attached to the Victorian original. Once ignored as a messy route for freight between the Docks and the Midlands, the canal is now an asset for a estate agents, offering picturesque riverside views for new buyers. Everywhere change is evident yet at the some time some things are wholly unchanged from when I first started biking that route. A jerry-built slide at the back of an estate that allows kids to hurl themselves into the canal is still there in the face of health and safety capos. One of the lockgates has carried the graffito “Go Vegan” for as long as I can remember.
But if 10 years’ time what will the canalside look like? Where will I be in 2017? Three months ago when I handed in my notice it seemed much clearer. I was already pulling in some freelance work and would probably pull in more once I’d left. Of course I only stopped worrying about the financial aspect of the move in the last few days before I quit. Suddenly I was very aware of how supportive the office environmental could be – even one as dysfunctional as mine. My fellow workers on our six-person pod, the regular tea runs – “don’t forget I take skimmed milk” – at 4pm and the general office badinage would be hard to replace sitting in my spare room sitting alongside the drying clothes on the clothes horse.
But hanging over all of this was the whole idea of identity. My business cards said I was something important sounding for a well-known company. If I called people they were likely to respond positively to who said I was. Once I’d left would they still. How would I introduce myself? “Hello this is Phil Thornton, ex- of the …” “Hello, this is Phil Thornton. I used to be…” How long will it be before I say: “This is Phil Thornton of Clarity Economics…”? I guess that realising that you are what you do rather than what you are called is the great workplace revelation.
January 10, 2008
Will 2008 will be the year for Web 2.0 in financial services?
What did you get for Christmas? An iPhone perhaps, or a new laptop, a Blackberry or a 3G mobile phone? Happy City folk will doubtless be amazed with what their new gadgets can do. But it is worth thinking about what modern technology cannot do when it comes to financial services, the life and blood of the City.
Any discussion about how financial services can adapt to Web 2.0 – or vice versa – is hampered by the fact that the UK industry has failed fully to exploit Web 1.0. Financial services have been on the cusp of exploiting new technology for years, and the example most cite is still First Direct, a telephone bank that has been an exemplary success since the mid-1990s.
That is not to say the Internet has had no effect – quite the opposite. The ability to compare prices has helped consumers find the best deal, especially on simple products such as savings accounts and loans, where the interest rate is the key factor. Households can compare household insurance prices and switch insurer at the click of a button.
But there should be more to online financial services than just price transparency. This presents a huge opportunity for quick-thinking companies. For the generation entering the workforce now the mobile phone is the gateway to social interaction, thanks to audio and video messages, Internet access on their handset - and sometimes even making a phone call. Their computer is for social networking and instant exchange of news, views, the latest music tracks and top moments on YouTube or MySpace, not word processing.
Readers of The Long Tail, Chris Anderson’s brilliant explanation of the creative destruction the Internet has wrought on swaths of business, will be aware that banking has been left undisturbed compared with popular music, books and clothing. Financial services were as invisible and transferable as music, yet no one had come up with the right product. Established names in finance have certainly embraced new technology, particularly in back office operations such as call centres and data processing.
But it is hard to find fund managers that offer clients the opportunity see in real time how their investments are performing and enable them to shift investments on their mobile phone or laptop. There are creditable reasons why they have not felt able to exploit the potential of the Internet. Regulators oblige firms to list services as products with key features rather than explaining the benefits. It is a cultural divide that is hard to bridge.
At a meeting of the Centre for the Study of Financial Innovation, a City think tank, management Patrick Towell described Web 2.0 as not just technological phenomenon but as a social and marketing one as well. While Web 1.0 is about accessing data, Web 2.0 is about making that relevant and personalised to the user. While Web 1.0 was about e-mail, Web 2.0 is about social spaces; Web 1.0 was about search engines While Web 2.0 was smart contact and so on.
It is likely to be a new entrant that makes the leap to a Web 2.0 format. One example is zopa.com, an online marketplace that allows people to meet and lend and borrow money. Launched in 2005 it has some 175,000 members who have lent and/or borrowed £16m, claims to give lenders 30% better returns than banks, and has a default rate of below 0.2%. It is named after the “zone of possible agreement”, a business term for an area where two or more negotiating parties can strike a deal on price. The aim was to combine the enjoyment factor that has made eBay the world’s largest retailer with consumers’ resentment towards traditional banks.
Social networks allow consumers to swap details – positive or negative – about firms and ask for advice on the most suitable products. Established businesses tend to fear this aspect while start-ups embrace it. Large companies might try to test the water by launching sub-brands or overseas operations that would not immediately encounter hostility from Internet-savvy consumers who tend to distrust major brands.
There are three essential elements of Web 2.0 that have the potential to change financial services, according to research consultants FreshMinds. The first is transparency and openness. Websites enable people to get better deals. The second is personalisation. Pru Health, which creates financial incentives for policyholders who pursue a healthy life style, is an interesting example. Third is the idea of “collective intelligence” – the idea that individuals can come together online to collaborate and share knowledge about savings and investment.
These examples of a technology and marketing “push” are welcome. However the real impetus for change will be a “pull” by consumers.One striking example comes from some of the most underdeveloped parts of Africa. Where there is little in the way of banking services or landline phones, mobile phones fill the gap by enabling people to send money to each other using prepaid scratchcards.
In more developed economies such as South Africa, consumers can pay utility bills and check their balance via their phone. Where developing countries lead, rich ones will surely follow. The same technology must allow more complex investing and trading. The issue is whether regulators and politicians will feel happy managing a world where that can take place.
The pressure for change may soon become overwhelming. According to a story from the United States – where else? – mobile phones, laptops, digital cameras and MP3 players were among the most popular Christmas gift items for pre-school children.
That generation will grow up treating a mobile or handheld device as an extension of their body and will expect it to carry out “simple” tasks such as share dealing. The online financial revolution may be about to begin.
Any discussion about how financial services can adapt to Web 2.0 – or vice versa – is hampered by the fact that the UK industry has failed fully to exploit Web 1.0. Financial services have been on the cusp of exploiting new technology for years, and the example most cite is still First Direct, a telephone bank that has been an exemplary success since the mid-1990s.
That is not to say the Internet has had no effect – quite the opposite. The ability to compare prices has helped consumers find the best deal, especially on simple products such as savings accounts and loans, where the interest rate is the key factor. Households can compare household insurance prices and switch insurer at the click of a button.
But there should be more to online financial services than just price transparency. This presents a huge opportunity for quick-thinking companies. For the generation entering the workforce now the mobile phone is the gateway to social interaction, thanks to audio and video messages, Internet access on their handset - and sometimes even making a phone call. Their computer is for social networking and instant exchange of news, views, the latest music tracks and top moments on YouTube or MySpace, not word processing.
Readers of The Long Tail, Chris Anderson’s brilliant explanation of the creative destruction the Internet has wrought on swaths of business, will be aware that banking has been left undisturbed compared with popular music, books and clothing. Financial services were as invisible and transferable as music, yet no one had come up with the right product. Established names in finance have certainly embraced new technology, particularly in back office operations such as call centres and data processing.
But it is hard to find fund managers that offer clients the opportunity see in real time how their investments are performing and enable them to shift investments on their mobile phone or laptop. There are creditable reasons why they have not felt able to exploit the potential of the Internet. Regulators oblige firms to list services as products with key features rather than explaining the benefits. It is a cultural divide that is hard to bridge.
At a meeting of the Centre for the Study of Financial Innovation, a City think tank, management Patrick Towell described Web 2.0 as not just technological phenomenon but as a social and marketing one as well. While Web 1.0 is about accessing data, Web 2.0 is about making that relevant and personalised to the user. While Web 1.0 was about e-mail, Web 2.0 is about social spaces; Web 1.0 was about search engines While Web 2.0 was smart contact and so on.
It is likely to be a new entrant that makes the leap to a Web 2.0 format. One example is zopa.com, an online marketplace that allows people to meet and lend and borrow money. Launched in 2005 it has some 175,000 members who have lent and/or borrowed £16m, claims to give lenders 30% better returns than banks, and has a default rate of below 0.2%. It is named after the “zone of possible agreement”, a business term for an area where two or more negotiating parties can strike a deal on price. The aim was to combine the enjoyment factor that has made eBay the world’s largest retailer with consumers’ resentment towards traditional banks.
Social networks allow consumers to swap details – positive or negative – about firms and ask for advice on the most suitable products. Established businesses tend to fear this aspect while start-ups embrace it. Large companies might try to test the water by launching sub-brands or overseas operations that would not immediately encounter hostility from Internet-savvy consumers who tend to distrust major brands.
There are three essential elements of Web 2.0 that have the potential to change financial services, according to research consultants FreshMinds. The first is transparency and openness. Websites enable people to get better deals. The second is personalisation. Pru Health, which creates financial incentives for policyholders who pursue a healthy life style, is an interesting example. Third is the idea of “collective intelligence” – the idea that individuals can come together online to collaborate and share knowledge about savings and investment.
These examples of a technology and marketing “push” are welcome. However the real impetus for change will be a “pull” by consumers.One striking example comes from some of the most underdeveloped parts of Africa. Where there is little in the way of banking services or landline phones, mobile phones fill the gap by enabling people to send money to each other using prepaid scratchcards.
In more developed economies such as South Africa, consumers can pay utility bills and check their balance via their phone. Where developing countries lead, rich ones will surely follow. The same technology must allow more complex investing and trading. The issue is whether regulators and politicians will feel happy managing a world where that can take place.
The pressure for change may soon become overwhelming. According to a story from the United States – where else? – mobile phones, laptops, digital cameras and MP3 players were among the most popular Christmas gift items for pre-school children.
That generation will grow up treating a mobile or handheld device as an extension of their body and will expect it to carry out “simple” tasks such as share dealing. The online financial revolution may be about to begin.
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