Author Archives: Dr Tolu Olarewaju

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About Dr Tolu Olarewaju

PhD, PGCert, MSc, SFHEA - Lecturer in Economics at Staffordshire University. Some of my research: https://www.researchgate.net/profile/Tolu_Olarewaju2

How COVID-19 Exposed The Ethnic Poverty and Enterprise Rift (Participate in Our Research)

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Dr Tolu Olarewaju, Lecturer, Staffordshire business School

The British Academy (the United Kingdom’s national academy for the humanities and the social sciences) has tasked us with investigating the specific challenges that UK business owners faced during the COVID-19 pandemic and lockdown, the strategies that they used to keep their businesses afloat, and how they engaged with financial and regional support.

We are also interested in how best to support members of the Black Asian and Minority Ethnic (BAME) business community.

To participate in our study, kindly fill the survey below and/or please share the URL with your networks if you know any other business owners:

URL: http://staffordshire.qualtrics.com/jfe/form/SV_50kNUNYOKJFFQNM

Photograph: benjamin lehman | URL: https://unsplash.com/photos/gkZ-k3xf25w | Unsplash

Ethnic minorities were particularly affected by the COVID-19 pandemic in the UK and US, as in some other countries. In particular, the risk of death for some ethnic minority individuals who contracted COVID-19 in these countries was two to three times more compared to white individuals.

This disparity was a result of the underlying social and economic risk factors that ethnic minorities face, such as living in overcrowded and urban accommodation, being employed in riskier lower-skilled jobs, reduced access to healthcare, and structural racism. In other words, ethnic poverty in developed countries is driving higher infection and consequently death rates for ethnic minorities.

Drivers of Ethnic Poverty

Underlying the drivers of poverty for ethnic minorities in many developed countries are several socio-economic factors which include historical factors, discrimination, educational and entrepreneurial variations, and employment and pay disparities between ethnic groups.

Despite facsimile policies that emphasize equal access to education and employment in many developed countries, discrimination remains a critical barrier to equal employment. Several studies have found that both ethnic minorities are called back for interviews 50% less frequently than comparable whites, hired less often for high-skill jobs, and once hired are paid less. Thus, despite the increasing educational gains made by ethnic minority individuals, many are overqualified for the jobs that they do. Ethnic minority workers also often report not being given pay rises and being passed over for promotion.

Another very important driver for the disproportionately high poverty rates among ethnic minority groups is the concentration of such workers in low-paid work. Ethnic minority workers are more likely to work in low-paid sectors with limited progression opportunities and lower wages. Lack of movement out of low-paid work increases the risk of poverty among ethnic groups. In addition, there is generally a lower percentage of ethnic minority workers who are managers, directors, and senior officials.

Photograph: Maria Oswalt URL: https://unsplash.com/photos/qFkVFe9_d38 | Unsplash

Business Ownership Disparities

Before the pandemic, BAME business owners were less likely than non-BAME business owners to obtain mainstream business support and in the early days of coronavirus, nearly two-thirds of BAME business owners felt unable to access state-backed loans and grants, leaving many on the brink of financial ruin.

BAME-owned businesses are traditionally concentrated in the sectors worst hit by lockdown such as retail, health and social care, education, restaurants and accommodation.

The economic crisis facing these businesses is aggravated by the fact that they are more likely to hire a considerable number of BAME employees and attract more BAME customers. The significantly higher risk among such groups from COVID-19 implies that these businesses would have had to incur considerable costs to protect their staff and customers.

Solutions

Ethnic minorities consistently report reduced access to education, lack of social and financial capital, unemployment, low-pay, and poor progression from low-paid sector work. This suggests similar solutions for all groups, which would lead to better-quality jobs and higher pay. However, given that some of the drivers of poverty, such as higher unemployment and inactivity rates disproportionately affect ethnic groups, specific forms of outreach activity and drawing on local knowledge may be needed in these contexts.

Similarly, government solutions to reduce ethnic poverty in developed country contexts include interventions that ensure that education, training and apprenticeships are provided for ethnic minorities as well as schemes that help tackle low pay among ethnic minority workers. There is a need for policies that focus the on education, skills and training for ethnic groups particularly digital, literacy, and numeracy skills. Moreover, policies should also be encouraged that monitor the workforce in relation to ethnicity, which should include the recruitment, retention and progression phases of jobs.

Authorities need to work with employers to provide better-paid jobs and they should do more to listen to and encourage employers to hire a diverse range of skills and experiences. It is advisable to consider putting targets for ethnic minority representation on boards, something that has proven successful in the case of gender. It is also important to recognise the benefits of positive discrimination in the labour market, rather than view legislation to combat ethnic inequality as red tape or political correctness. Mortgage market discrimination needs to be eliminated as this would allow ethnic minorities to take advantage of the benefits that come with owning a home.

State-backed grants and loans should be made more accessible as an incentive to business owners who have incurred additional costs to protect customers and staff. Crucially, the process to obtain them should not be too onerous and the criteria should be fair. Regional governments should also take care to plug BAME businesses into the supply chains of local projects in response to the pandemic.

Source: Author

All these should reduce ethnic poverty and the economic and health inequalities that the COVID-19 pandemic has highlighted.

Don’t forget to participate in our research if you a business owner: http://staffordshire.qualtrics.com/jfe/form/SV_50kNUNYOKJFFQNM

Notes: Excerpts for this essay was taking from my book chapter: “Ethnic Poverty: Causes, Implications, and Solutions” available at: https://www.researchgate.net/publication/344725834_Ethnic_Poverty_Causes_Implications_and_Solutions

Hult Prize 2020 – Save Our Planet by Student Entrepreneurship

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The Hult Prize returns in 2020 and we’re on the hunt for students across Staffordshire University to enter as teams in this year’s competition ahead of the closing date on Tuesday 3 December 2019.

The Hult Prize is both the world’s largest student enterprise competition and the world’s largest movement for social impact. Students from universities around the globe compete to win $1,000,000 in start-up funding to start a business that solves a pressing social issue.

For 2020, the Hult Prize challenges teams from universities globally to build bold businesses that:

 1. Have a positive net impact on the environment with every sale completed, dollar earned, and decision made; and

 2. Reach no fewer than a million consumers within a decade.

Hult Prize 2020 Challenge

This year’s business challenge concerns climate change and is our chance to show the world that our institution is dedicated to Impact. There are many benefits of competing apart from the chance to win the $1,000,000 in start-up funding. 

Students will get to hone their business skills, develop exciting business ideas, engage with fellow students from every part of our planet, and represent the university at a global level.

They will compete across hundreds of cities en-route to regional finals and the summer Hult Prize Accelerator. A final round and awards ceremony is hosted by Former President Bill Clinton each year at the Clinton Global Initiative annual meeting.

Staffordshire University Students with Other International Students at the Regional Finals in London, 2019.

How do you compete in the Hult Prize at Staffordshire University?

All students need to do is develop an idea and form a team. 

Each team (of between three to four students) should fill the form here and click the submit button.

This will qualify them for our on-campus event which takes place on Wednesday 4 December at LT001 Ashley Lecture Theatre (Leek Road). At the event each team will get ten minutes to pitch their idea to our judges and will go through five minutes of questioning.

Where can I get more information or register for the Hult Prize 2020?

Visit the Staffs Uni page on the Hult Prize website to register teams and/or to contact Tolu Olarewaju our University Hult Prize Campus Director.

Important Dates:

Friday 29 November 2019:
Q&A Session at LT001 Ashley Lecture Theatre (Leek Road) – 2 pm.

Tuesday 3 December 2019:
Team Registration Deadline – 6 pm. All teams must register here.

Wednesday 4 December 2019: The Main Event On-Campus Team Business Idea Pitches.
Venue: LT001 Ashley Lecture Theatre (Leek Road) – 11 am to 1 pm.

All students and members of staff are welcome to watch the business idea pitches.

PAY, POVERTY AND ETHNICITY IN THE UK

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Dr Tolu olarewaju, Lecturer at Staffordshire business School

In 2017, the average (median) hourly pay for White people within the UK was £11.34, which was 10p higher than the average hourly pay for people from all other ethnic groups combined. However, Indian people had the highest average hourly pay (at £13.14), while Pakistani and Bangladeshi people had the lowest (at £9.52), Black people had an average hourly pay of £11.10, while Chinese and other Asian people had an average hourly pay of £11.05.

Birmingham New Street. Image Source: Taken by Author.

Research also reveals that the poverty rate is twice as high for Black, Asian & Minority Ethnic (BAME) groups compared to White groups within the UK. However, there is wide variation between different ethnic groups. Reports indicate that poverty rates are about 50% for Bangladeshi, 47% for Pakistani, 40% for Black, 35% for Chinese, and 25% for Indian, compared with 19% for White.

There are also some groups who are more frequently in persistent poverty (individuals are considered to be experiencing relative poverty if they live in a household with an equivalised disposable income that falls below 60% of the national median in the current year while persistent poverty is defined as experiencing relative low income in the current year, as well as at least 2 out of the 3 preceding years – in 2015, the poverty threshold in the UK was £12,567). Caribbean, Bangladeshi, African and Pakistani individuals have persistent poverty rates of 23%, 24%, 31% and 37% respectively. This compares with 13% for White individuals.

Within White groups, poverty rates differ too. For example, Gypsy/Irish travellers experience some of the highest unemployment rates of all ethnic groups and concentration in low pay for some EU migrants is also substantial.  This seems to be particularly expressed in homelessness rates for EU migrants with 36% of rough-sleepers being from Central and Eastern European (CEE) countries, 5% from African countries and 4% from Asian countries. However, a greater proportion of EU citizens have work compared to BAME citizens within the UK.

All In Together Now. Image Source: www.unsplash.com

DRIVERS OF POVERTY FOR ETHNIC GROUPS IN THE UK

Unemployment: According to current figures, while the unemployment rate for White British and White other is 4%, the unemployment rate for Asians is 7%, with Indian 6%, Pakistani/Bangladeshi 10%, Black 9% and Mixed 10%. However, the unemployment gap between White and BAME groups seems to have been improving over the last decade, and Indian and Chinese workers have relatively better success in the labour market than other ethnic minority groups. The unemployment rate interacts with the hourly wage rate to determine poverty levels. Overall, just under 4% of White people are unemployed, compared with 8% of people from all other ethnic groups combined.

Type of work: A closer look at the data reveals that 55% of people in poverty are currently in a working family. However, one very important driver for the disproportionately high poverty rates among some ethnic groups is the concentration of BAME workers in low-paid work. BAME groups are more likely to work in low-paid sectors such as caring, sales, catering, hairdressing, elementary and clothing professions – occupations with limited progression opportunities and lower wages. It is this lack of movement out of low-paid work that increases the risk of poverty among ethnic groups. In fact, a key reason why Indian people earn more than White people per hour is because there are more Indian people in professional jobs (at 31%) than any other ethnic groups. “Percentage of workers in different types of occupation by ethnicity” figures also reveal that the least proportion of people who are managers, directors and senior officials are Black people.

Lack of Return for Education Qualifications/Improvement of Skills: BAME groups are more likely to be overqualified for the jobs they work in and less likely to get a good return for university education. Figures reveal that 40% of African and 39% of Bangladeshi employees were overqualified for their roles, compared with 25% of White workers. BAME workers often report not being given pay rises when their White colleagues get them or being passed over for promotion.

Dr Tolu Olarewaju presenting at Staffordshire University.

Entrepreneurship: Another route of poverty could be via entrepreneurship. Research reveals that more ethnic diversity within the UK enhances entrepreneurship. Interestingly, that research also revealed that Black people have the greatest likelihood of starting up a business, followed by Mixed people, Pakistani/Bangladeshi people, people from other Asian groups, White people who were not Irish, Indian people and then White people who were Irish. Here again however, there are variations between those born in the UK and foreign-born individuals; with being foreign born not so positive for entrepreneurship. Another reason for poverty in BAME ethnic groups could be the type of entrepreneurship that they engage in.

In addition, BAME groups are more likely to experience inactivity and lower levels of pay for the same job compared to White groups. Underlying these drivers are several other factors which include geographical location, racism and discrimination, and migration status. For example, first generation migrants might experience pay gaps that cannot be explained by the drivers above alone. The experience of poverty is particularly problematic for BAME communities because of the racial prejudice that they suffer already.

IMPLICATIONS FOR THE UK AND POSSIBLE SOLUTIONS

Apart from the moral reasons for wanting to eradicate poverty from our society, the government commissioned McGregor-Smith review of BAME talent and progress at work estimates that having full representation of BAME workers in the labour market, through improving both their rates of progression out of low-paid roles and increased access to higher paid and more senior jobs, would both help reduce poverty within the country significantly and would benefit the UK economy by £24 billion a year.

In addition, poverty has devastating consequences for the people who live in it. The vicious cycle of poverty means that lifelong barriers and troubles are passed on from one generation to the next. Poverty is also a major cause of social tensions and wealth inequality contributed to the downfall of Rome.

To reduce ethnic poverty within the UK, I agree that policies and interventions that will tackle low pay among BAME workers, such as working with employers to provide better paid jobs, should be encouraged. Ethnic pay-gap reporting could also help. Policies should also be encouraged that monitor workforces by ethnicity which should include the recruitment, retention and progression phases of jobs. In addition, there is a need for policies that focus on skills and training for BAME groups especially digital, literacy and numeracy skills.

We can do this. Image Source: www.unsplash.com

Some Recent Activities by Staffordshire Business School Students

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Dr Tolu Olarewaju, Lecturer

It is a really exciting time to be studying at Staffordshire Business School. Staffordshire Business School is at the heart of an ambitious and vibrant institution with one of the most ambitious agendas in Higher Education in the United Kingdom, Staffordshire University. Recently, our students have been extremely busy. I have highlighted some examples to showcase some of the activities they have been engaged in.

Enterprise

The first activity relates to enterprise activities by our students who were at the prestigious Hult Prize Regional Finals in London this year. The Hult Prize is an annual, year-long competition that crowd-sources ideas from students around the world after challenging them to solve a pressing social issue around topics such as food security, water access, energy, and education. The challenge this year was on how best to tackle the Youth Unemployment Crises and below is a write up from one of our students:

Staffordshire Business School, Staffordshire University Students at Hult Prize Regional Finals 2019

“The experience was amazing overall and has yet to truly finish as I look toward the wild card option. I would recommend anyone to partake in the Hult Prize especially if you have never presented outside of a classroom. It also helps you to understand the standards that are expected inside the working world. That being said my team would not have been able to achieve so much without the support lectures of the business school. I would like to thank Dr Tolulope Olarewaju for his guidance and advice as everything he predicted would happen, happened and we were ready for it. I would also like to thank Dr Bharati Singh for her feedback on our presentation style and finally the Business School Senior Management Team for taking the time to give us useful feedback on the contents of our pitch.” – Marlone Judith (MSc International Business Management).

Staffordshire Business School Students with other Contestants at Hult Prize Regional Finals 2019

Innovation and Business

Our MBA students have also been busy working on business ideas. Recently, they pitched an innovative games console idea that is set to take the business world by storm. Don’t forget, Staffordshire Business School launched the UK’s first Esports degree. This synergy between business and entertainment is truly remarkable and is one to be watched as the Avengers Endgame has showed.

Staffordshire Business School MBA Students after a Business Pitch on Game Consoles.

Potluck

Of course one gets tired after such high minded intellectual and business pursuits. It is only natural that fatigue sets in and when that happens, we like to recharge our batteries by engaging in informal activities. Recently, we engaged in a potluck and asked students to bring food items from their home countries. Staffordshire Business School has a vibrant international community and the food on offer was both varied and delicious – yum.

Staffordshire Business School Potluck

There are a lot of interesting courses available if you are thinking of joining us. Take a look at our undergraduate and postgraduate courses. There are also part-time courses for those who want to top-up their business management qualifications or for beginners.

Christmas Cheer! We’ll Be There!!

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Dr Tolu Olarewaju, Lecturer at Staffordshire Business School

I knew Christmas was near when BBC Radio Stoke asked for an interview on Black Friday and how to spot good deals. The next day, students debated and presented evidence on some offers that seemed dubious – interesting. Be that as it may, the mood around campus and town was definitely getting lighter as everyone could feel the holidays approaching – research shows that holidays are good for morale.

Christmas is a wonderful time. Just think about those gifts and all that food. Then there’s the added bonus of the end to a year a week after. It is a good time to wind down and relax with family and friends. Even if you don’t like too much company, at least you get to simmer down 🙂

There’s been so much going on lately, we decided to wind down for Christmas. Here we are at a dinner at the wayfarer, an excellent country pub and restaurant.

Academics Relax Too.

Then we got a bit silly at the staff Christmas party.

HoHoHo.

Yours truly was able to get about in Hanley.  There’s a fantastic Winter Wonderland with loads to eat and do including, rides, go karts, games, an ice rink and of course a beautiful atmosphere.

Ice skaters in Winter Wonderland Hanley, Stoke-on-Trent

As an academic, of course this was writing, reviewing, reading, grading, and speculating season but still, twas nice to exchange pleasantries with folks during the yuletide season. Hope you had a lovely Christmas and wish you a wonderful 2019 🙂

 

Recent Trends in Microfinance

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The term Microfinance is derived from the word microcredit which means “small credit” in simple terms. However, with the expansion of services from Microfinance Institutions (MFIs), different people, agencies, and institutions have defined Microfinance differently. Generally, microfinance is defined as the provision of financial and non-financial services from microfinance institutions to low-income households and small business who were excluded by commercial banks.

The term Microfinance now covers a wide range of product and services such as microloans, savings, insurance, and remittance. Some scholars believe that the first formal microcredit institution was “Grameen Bank”, which was established in 1976 in Bangladesh by Dr Muhammad Yunus, a Nobel peace prize winner in 2006.

The term Microfinance covers a wide range of product and services such as microloans and savings.

The institution was set up as a non-profit institution to provide small credit, especially to women in the rural part of Bangladesh because it was difficult for them to receive loans from commercial banks. Over time, Grameen Bank grew in popularity and customer base and more MFIs started to emerge following the Grameen Model.

What is the Grameen Model?

The Grameen Model was created by Grameen Bank of Bangladesh which has currently the widest replication in many developing countries across the world. In Grameen model Five unrelated, self-selected prospective borrowers are formed and required to make a savings deposit and payment on a loan at given period. The institution does not evaluate these loans as individual loans but as group loans and also leaves members to do most of the management and financial services.

First, two members of the group will receive the loan and then the group members determine the rotation of access to credit, and after timely repayments, an additional two members receive loans. If any member in a group fails to make an installment payment on time, then the borrower or group will be cut off from the future borrowing. However, if the borrower/group makes payment on time and in an orderly manner then bigger loans are granted in the future.

The Grameen model provides credit to the very poor in rural areas without requiring any collateral. The model also has low transaction costs and focuses on women. The Grameen Bank approach is currently being applied in many countries. A few of such countries are Bhutan, Bolivia, Burkina Faso, Chile, Guinea, India, Indonesia, Kenya, Malawi, Malaysia, Mali, Nepal, Nigeria, Pakistan, Peru, Philippines, Sri Lanka, Vietnam and Zambia Some developed countries like Canada, France, and the U.S., have also adopted a version where it is being used to help people become income generators.

Trends in Microfinance

Microfinance Institutions (MFIs) have had global influence and spread around the globe because microfinance has been regarded as one of the effective tools for fighting poverty. Initially, MFIs depended on donations, grants and government subsidies. However, in last decade, some microfinance institutions have realised that they might need to make a profit to provide continuous service, cover their administrative, financial and operational cost, and also budget for the future development without needing any government funds or donations.

In recent years, MFIs have been focusing slightly more on their financial side and as a result, the industry is moving towards profit-oriented MFI’s which means that these MFIs are applying market-based principles. This implies that we have had three stages of MFI’s since their conception which can be seen from the following figure.

Trends in Microfinance Institutions

Some of the first microfinance institutions to adopt the profit-orientated approach were Bank Rakayat Indonesia (BRI), K-Rep in Kenya, Mibanco in Peru, First Microfinance Bank (FMFB) in Pakistan, and CARD Rural Bank in the Philippines. Similarly, PRODEM, the leading Microfinance NGO in Bolivia, transformed into a financial bank called BancoSol.

In conclusion, although MFIs were established as non-profit institutions to provide social services, it seems that microfinance institutions are becoming more like profit-oriented institutions for various reasons.

Sanjib Sherpa (sanjib.sherpa@research.staffs.ac.uk) is currently undertaking his PhD study at Staffordshire University in the area of Microfinance under the supervision of Dr Tolu Olarewaju.

THE BIGGER PICTURE: BREXIT SPEECH VS DONALD TRUMP’S TARIFFS

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On Friday, 2 March 2018, at the Mansion House in London, Theresa May delivered her most comprehensive Brexit speech to date. It was a speech designed to bridge the divide between Remain and Leave voters as she tried to explain Britain’s future relationship with the EU.

To international business economists like myself, this was a welcome speech, with very insightful details into how Britain was looking to trade with the EU and other countries after D-day a.k.a. “Transition Period“. The Prime Minister spoke about approaching a crucial moment in the negotiations and specified that existing models like the Norway model would not work because that would mean having to implement new EU legislation automatically and, in its entirety and would also mean continued free movement.

A Canada model would also not be suitable on World Trade Organisation terms because that would mean customs and regulatory checks at the border and damage the integrated supply chains of both EU and British firms – inconsistent with the commitments that both Britain and the EU have made in respect of Northern Ireland.

The most positive thing about the speech however was its tone. It was in many ways a call to partnership and not protectionist mantra. Mrs May is right in many aspects but in one key detail in particular.

 

When other countries seek to become part of the EU, they have to make their laws, regulations and standards align with those of the EU. In this case however, Britain is already aligned with the EU. What Britain wants is some leeway to be different in certain respects. When Britain leaves the EU, the Withdrawal Bill will bring EU law into UK law.

In the future, Parliament might choose to pass an identical law to EU law in some cases – when businesses who export to the EU indicate that it is in their interest to have a single set of regulatory standards that mean they can sell into the UK and EU markets. If Parliament on the other hand decides not to achieve the same outcomes as EU law, it would be in the knowledge that there may be consequences for British market access.

 

 

TRUMP’S PROTECTIONIST TARIFFS 

A few days after the British Prime Minister’s speech, the US President, Mr Trump signed an order for a 25% tariff on imports of steel and a 10% tariff on aluminium into the US, saying some exceptions will be made for Canada and Mexico, prompting fears of trade war. While the US steel industry is obviously happy about the plans, it seems everyone else is upset.

Recall that Mr Trump campaigned on saving US steel and aluminium jobs, which have been lost to cheap foreign imports. But these tariffs threaten to undermine decades of agreement in international trade and have split the Republican party. There was no congressional member of his own party present for the White House announcement.

The US President is planning tariffs on $60bn worth of Chinese goods, in part because of alleged Chinese theft of intellectual property – which means design and product ideas. The White House said it has a list of more than 1,000 products that could be targeted by the tariffs of 25%. Companies will get a chance to comment before they are put into effect. Mr Trump wants to cut the trade deficit with China – a country he has accused of unfair trade practices since before he become president.

Officials from China and Europe have threatened retaliation. Richard Warren, head of policy at UK Steel, said the US was a significant export market for British producers, accounting for around 15% of UK steel exports. “This really does throw a spanner in the works” he said. The European Union has indicated it could retaliate, potentially starting a trade war with the US.

 

 

European Commission President Jean-Claude Juncker said: “We will not sit idly while our industry is hit with unfair measures that put thousands of European jobs at risk.” “I had the occasion to say that the EU would react adequately and that’s what we will do.” “The EU will react firmly and commensurately to defend our interests. The Commission will bring forward in the next few days a proposal for WTO-compatible counter-measures against the US to re-balance the situation.”

It’s not just Europe and the UK that have voiced concern, Australia’s trade minister said it will distort global trade and cost jobs. He also highlighted the risk of retaliatory measures as Asian exporters sought more detail on the plans.

 

 

AN OVERVIEW

A trade war is when countries try to attack each other’s trade with taxes and quotas. One country will raise tariffs, a type of tax, causing the other to respond, in a tit-for-tat escalation. This can hurt other nations’ economies and lead to rising political tensions between them. This is a form of protectionism. Protectionism is trying to use tariffs to boost your country’s industry and shield it from foreign competition.

A trade war will be bad in this scenario, but Mr Donald Trump does have a point. China has been flouting international property rules and will have more to lose in a trade war. This flouting of international property rules has also resulted in a huge US trade deficit with China.

No party wants a trade war. Britain’s tone on Brexit is much softer and open to compromise. The US tone on trade seems to indicate a much tougher stance. Analysts might argue that this is because one side has more to lose than the other. Maybe what all sides need however is a more reconciliatory tone. Partnership will be better than conflict.

On Monday, 2nd of April 2018, China imposed tariffs of up to 25% on 128 US imports, including pork and wine, affecting some $3bn (£2.1bn) of imports. Beijing said the move was to safeguard China’s interests and balance losses caused by new US tariffs. The markets fell as a result, International Business Economists continue to monitor the situation.

Dr Tolu Olarewaju is a lecturer in Economics at Staffordshire University. For more information on International Business and Business Strategy courses at Staffordshire University, please visit www.staffs.ac.uk.

 

 

Our quest to improve the lives of refugees through the Hult Prize 2016/2017 and why YOU should compete in the Hult Prize

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This is a blog post about the Hult Prize, written by Sarah Vitorino, a student. The Hult Prize has become the world’s largest student competition, as well as the most prestigious award on the planet for the creation of new social enterprises.

 

I first found out about the Hult Prize through a lecturer at the university. As a part-time student I wasn’t sure if I would be able to compete, but after finding 2 other members for a team, Dan, Dani and I signed up together. The challenge set by the competition was to help 10 million refugees by 2022. With the help and support from the university, our team (which we named “Team Reach”) finally decided that we would build a fashion company in Colombia, in which factory seconds and discarded materials would be used to create our own fashion line, working with up and coming designers. Since 1985, over 4 million Colombians have been displaced by the armed conflict, both within the country and crossing the border into surrounding countries. This was our chance to make a difference.

Team Reach with other International Students at Hult Prize 2017 (Sarah Vitorino is 4th from right).

After pitching to judges within Staffordshire University, we were put through to the continental finals in London. Before we went to London, we spent many hours perfecting our business plan with Tolu (our lecturer and mentor) and got support from other lecturers within the School of Business, Leadership and Economics. We were put in contact with experienced entrepreneurs who also gave us sound business advice and we also got to pitch to the university’s senior management team which included the Vice Chancellor. With the presentation and the pitch ready for London, the weekend of the finals quickly came around.  Once in London, we were introduced to, and listened to speakers including Cesar Del Valle who were so passionate about the Hult Prize and everything it stands for that straight away it wasn’t just a competition.  Yes, we wanted to win in London and go through to the next round, to eventually win, but that was secondary. What mattered was that we were stood in a room filled with students from across the world and we were all fighting for the same thing, to help refugees and to make the world a better place.

Eventually it came our time to pitch our idea. Before the competition, I would avoid public speaking at all costs. My heart was racing as we walked into the room, set up our boards and looked across the room at the judges and students.  It felt like the longest pause as we stood there at the front, then Dan started to speak. Everything fell into place.  We had run through this so many times we had it to near perfection.  We believed in what we were saying. We could see the future in the idea. I don’t remember many details from the presentation other than my constant reminders to myself of ‘make eye contact’.  We left the room relieved. It had gone as well as we could have hoped. The timing was perfect, we communicated all the information we had wanted to and the questions from the judges sounded promising.  We were called back to answer a few more questions,,, further elaborations on wages, why we had chosen Colombia? We took them in our stride…

Staffordshire University’s “Team Reach” at Hult Prize 2017

The winning team from London was a Canadian team wanting to connect refugees with locals to exchange skills. Nonetheless, our time in London was amazing. We heard ideas and pitches for things we would never have considered, we met people and made friends from all over the world, we took part in an experience that most people could only dream of. The memories of that weekend will always be with me; the atmosphere of the weekend will be something I could never forget and I became much more confident. I still get nervous at public speaking but I know now that I can do it. The biggest change in myself, however, is that I caught something that weekend. From the atmosphere, the passion of the speakers and the insights of our new friends, I want to change my life. I want my future to be about helping people and making a difference to the world because there are so many other people out there who have so much less than I do. I changed because I realised that I really can make that difference we set out to.

The Hult Prize is a fantastic event and I would advise all students to compete. It not only gives you practical skills, you get to interact with university students from around the world for a good cause. It is one of the best things that I have ever done and I am grateful for the opportunity. Go ahead and give it a try. You will not regret it.

If you would like to get involved or would like more information click here or contact:

Sarah
e: sarah.andrade.vitorino@gmail.com
t: 07496151612

Tolu
e: Tolulope.Olarewaju@staffs.ac.uk
t: 07808836580

 

The Economic and Social Impact of Stoke City FC

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The English Premier League is a global brand. Stories abound of travellers from Stoke-on-Trent travelling to far flung corners of the earth, getting into a cab, pub, or conversation and being asked; “Where are you from?” the traveller responds; “I am from Stoke” only to be told; “I know Stoke FC!”, a list of players is usually reeled out including Peter Crouch and co, and from then onward, the conversation takes on a new dimension of familiarity and friendliness.

Peter Crouch Goal Celebration

 

English Premiership Clubs have fans in all corners of the world. Jerseys are sold in Africa, Asia, the Americas, Europe and Australia. Matches are watched on all sorts of devices and football players are household names with kids dreaming of growing up to be like their heroes or even just meeting them someday.

 

Beyond the pitch however, there is another dimension that is closer to home. Football clubs are generating huge revenues and investing these in a variety of ways with a huge impact to their local economies. For example, Stoke FC’s revenue was £11 million in the 2007/2008 football season and then Championship promotion boosted the Club’s revenue even more from commercial, match day and broadcast streams. In the 2015/2016 Stoke FC’s total revenues rose to £119 million, making them the 9th in the Premier League. The growth in the Club’s income since joining the Premier League has enabled it to significantly increase its investment in the region and grow the profile of the Club and the city at home and abroad.  Some key regional and social impact statistics for Stoke FC for the 2015/2016 season are shown in Table 1.

 

Table 1: Key Regional Economic and Social Impact of Stoke City FC Statistics (2015/2016 Season)
2,391 international visits
119,000+ domestic tourists
£7 million visitor spending
301 direct Club employees (FTEs)
£1.3 million spent on local community initiatives
£29 million spent on Club supply chains (some local)

 

In addition to the impact highlighted in Table 1, the Club has also expanded its stadium to boost match day attendance and attract more visitors to the region, invested in players from the UK and abroad to extend the reach of its fan base to other areas of the globe, invested around £4million into its academy providing local young people with opportunities to develop their football careers at the Club, and invested in the Community Trust to work with the wider community to target individuals who want to get back into education, employment or generally improve their health or mental well-being.

 

Not only does success on the pitch attract visitors to the region who spend on travel, accommodation and food and drink, there is the indirect effect from the supply chain and the induced impact from increased employee spending. Analysis from Ernst & Young LLP shows that Stoke City FC generated a total Gross Value Added contribution of 132 million to the region during the 2015/2016 season. £108 million was directly contributed via the club and its tourism, a further £13 million was generated via indirect effects in local supply chains and £10 million was generated via induced effects. This activity also attracts businesses to locate their operations within the area.

Staffordshire University students and staff with Tony Scholes (CEO of Stoke FC)

 

Granted that a lot of the players might not live in the region, the activities of Stoke City FC resulted in an estimated £66million total liability to the Exchequer in 2015/2016. The presence of Stoke City FC also supported many FTE jobs in the regional economy during that period. 301 people were directly employed by the club, 853 people were employed by relevant supply chains, 401 people were employed via tourism to watch Stoke FC, and a further 682 were employed because of induced effects.

 

Beyond these, the Club supports a variety of initiatives to improve the lives of individuals and communities, working with a number of stakeholders including schools, local government and wider supporting organisations (e.g. the premier league). Community activities are delivered by Stoke City FC’s Community Trust (SCCT) which was founded in 1989 and became a registered charity in 2004. Ernst & Young LLP estimate that around 10,900 people have participated in community and charitable programmes in 2015/2016. 119,600 day trips were organised and 304 people have gained at least one qualification as a result of the Clubs initiatives. During the period under review, 10,246 hours of volunteering community work was done with the result of £8.7 million savings for the local community on physical wellbeing and £2.9 million savings on mental well being from increased physical activity.

 

With these key statistics, it is not hard to cheer for our local team. The sporting and commercial success of the Club in recent years, which includes breaking their transfer record twice in the 2015/2016 season, has allowed Stoke FC to further embed itself as a key member of our local economy. We at Staffordshire University will continue to cheer for the club. You should do the same too ???!!!

 

Technology, Opportunity and Entrepreneurship

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Technology has fabulously changed our jobs market since it transformed the production landscape during the industrial revolution, but even more so in the past three decades. Like in the 16th century, many jobs that were once considered crucial are now obsolete, and new job descriptions are being created in the labour market even as many forms of automation are presently being integrated into the production process. One does not have to go far to see how technology has changed our lives in forms of communication, transportation, work and leisure. Your being able to read this article has been greatly enhanced by technology and I as the writer have had to have some basic skills in technology to be able to deliver this article to you.

As an economist, there used to be a time when my profession worried about what humankind would do when we ran out of oil but recent technological advancements have once again rendered that discussion archaic. There also used to be a time when the factors of production were firmly believed to be land, labour, capital and entrepreneurship but some economists will argue that there is a need to include one additional factor of production in the modern era – you guessed it “technology”.

So what does this mean for young people as they decide their future? Should we be scared of this trend? How far reaching will advancements in technology be felt? Humankind has been very fortunate to have been able to grasp the benefits of technology and we have used it to live longer healthier lives, explore space and other planetary objects, and open great doors for the future but we have also made many mistakes along the way. Young people need to wary of this and know that they have to be the ones to decide on how we harness this power and what we use it for.

Business Management students at BMW in Munich

Business Management students at BMW in Munich

My area of focus in economic research right now is entrepreneurship and I became interested in entrepreneurship particularly because entrepreneurs are the ones who combine all the other factors of production to actually benefit humankind. Without the entrepreneur, other factors of production would be idle. Entrepreneurs however need to be somewhat knowledgeable to be able to do their jobs properly. Adam Smith, one of my favourite economists used the example of a small grocery to illustrate this point:

“The owner of such an enterprise [a business] must be able to read, write, account, and must be a tolerable judge too of perhaps, fifty to sixty different sorts of goods, their prices, qualities, and the market where they are to be had cheapest.”

This example shows that a business owner needs a modest amount of education to function profitably. This education might not necessarily be formal but the entrepreneur must know their stuff.

In our current society we are awash with technological advancements and these seem to be changing the way we live and do business. Businesses that have not kept abreast of current vagaries or have been slow to make investments in innovation have found themselves left behind, and entrepreneurs will need to know that they will face the same fate if they do not stay knowledgeable about technological developments that affect their customers and market.

This also presents some opportunities for entrepreneurs as they can be avant-gardists and influencers of the future. Imagine the impact that innovators have had on our current society not just in terms of social media but virtually in all productive fields. The world needs smart means of using its limited resources to improve the quality of our lives, and individuals who can do this successfully will be blessed with the commensurate rewards.

A holistic education is thus needed to be successful in the present climate as well as an open mind and the right sort of social capital. As the saying goes “no one is an island” and “many hands make light work”. Business owners and potential successful entrepreneurs will also be wise not to jump into the water with both feet but to test out their ideas and products carefully before venturing out boldly into the wide world.