Is there a panacea for low productivity ?

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By Ema Talam   on twitter as @ematalam

Productivity differences between different producers exist and persist, even among those operating within the same industries (Syverson, 2011; Van Reenen, 2011). Achieving higher productivity is of an utmost importance for firms as it leads to better firm performance and leads to increased profits. These increased profits can be used for future investment and wage rises.  The panacea for low productivity is often sought, however, the factors determining productivity are numerous, differing in their scope, level of influence and complexity.

One of the factors determining productivity is innovation. While some studies establish that innovation in general is positively linked with productivity (Movahedi et al., 2017), some limit this link to product innovation (Cassiman and Golovko, 2011). Porter (1990) argues that firms often have no choice but to innovate, as they face competitive pressures coming from their buyers or competitors.

The productivity of a firm may be determined by talents and practices of its managers. Bloom and Van Reenen (2010) have shown that firms that employ better management have higher labour productivity. Management practices differ widely both among different firms and different countries. They are influenced by numerous factors, some of them being: product market competition, labour market regulations, relationship between ownership and management of a firm, education of managers and workers, etc. (Bloom and Van Reenen, 2010).

Quality of inputs is another factor that determines productivity. Rather than clinging on basic resources (or lack of those), it can be argued that productivity is mainly determined by superiority of labour and capital inputs (Porter, 1990; Syverson, 2011). Education, training and experience can all affect quality of labour inputs. Quality differences of capital inputs can influence productivity (Syverson, 2011). The lack of basic resources can push firms to innovate and improve (Porter, 1990). It has been shown that differences in intangible capital and IT can also affect productivity (Syverson, 2011).

Another significant factor that can influence productivity are different decisions regarding the organisation and structure of a firm. Different process improvements through learning-by-doing can also influence productivity (Syverson, 2011).

Productivity spillovers and competition are important external determinants of productivity of a firm. Productivity spillovers occur mainly within the same or similar industries. Competition can hugely affect productivity and firms can face competitive pressures from both other domestic and foreign firms (Syverson, 2011).

The theoretically established ‘learning-by-exporting’ hypothesis states that exporting can improve productivity of a firm. On the one hand, a firm participating in an export market is exposed to a larger competition. On the other hand, by participating in an export market, a firm can gain new knowledge from its buyers and competitors (Wagner, 2007). Some empirical research has confirmed this hypothesis (Damijan et al., 2010).

As discussed above, productivity of a firm is influenced by a numerous factors. Some of the above-mentioned factors can be influenced to a greater extent than the others and some of those factors require shorter periods to be adjusted than the others. However, given that there is variety of factors, their complexity and the level of their potential interactions, the question still remains: is there really a panacea for low productivity?

References:

  1. Bloom, N. and Van Reenen, J. (2010) ‘Why do management practices differ across firms and countries’, The Journal of Economic Perspectives, 24(1), pp. 203-224. Available at: https://www-jstor-org.ezproxy.staffs.ac.uk/stable/25703489 (Accessed: 24th June 2018)
  2. Cassiman, B. and Golovko, E. (2011) ‘Innovation and internationalization through exports’, Journal of International Business Studies, 42(1), pp. 56-75. Available at: http://www.jstor.org.ezproxy.staffs.ac.uk/stable/25790105 (Accessed: 28th March 2018)
  3. Damijan, J.P., Kostevc, C., & Polanec, S. (2010) ‘From innovation to exporting or vice versa?’, The World Economy, 33(3), pp. 374-398. Available at: http://onlinelibrary.wiley.com.ezproxy.staffs.ac.uk/journal/10.1111/%28ISSN%291467-9701/issues (Accessed: 24th March 2018)
  4. Movahedi, M., Shahbazi, K., & Gaussens, O. (2017) ‘Innovation and willingness to export: Is there an effect of conscious self-selection?’, Economics: The Open-Access, Open-Assessment E-Journal, 11(25), pp. 1-22. Available at: http://www.economics-ejournal.org/economics/journalarticles/2017-25 (Accessed: 1st May 2018)
  5. Porter, M. (1990) ‘The competitive advantage of nations’, Harvard Business Review. Available at: https://hbr.org/1990/03/the-competitive-advantage-of-nations (Accessed: 4th June 2018)
  6. Syverson, C. (2011) ‘What determines productivity?’, Journal of Economic Literature, 49(2), pp. 326-365. Available at: http://www.jstor.org.ezproxy.staffs.ac.uk/stable/23071619 (Accessed: 30th April 2018)
  7. Van Reenen, J. (2011) ‘Does competition raise productivity through improving management quality’, International Journal of Industrial Organisation, 29(3), pp. 306-316. Available at: https://ac-els-cdn-com.ezproxy.staffs.ac.uk/S0167718711000208/1-s2.0-S0167718711000208-main.pdf?_tid=48b828f4-40fc-4fad-a130-5cec9cbc83ab&acdnat=1530139607_684e48c04c59ac476baa4ece54f7c606 (Accessed: 22nd June 2018)
  8. Wagner, J. (2007) ‘Exports and productivity: A survey of the evidence from firm-level data’, The World Economy, 30(1), pp. 60-82. Available at: http://onlinelibrary.wiley.com.ezproxy.staffs.ac.uk/journal/10.1111/%28ISSN%291467-9701/issues (Accessed: 16th April 2018)

 

 

Culture and Ethics In The Workplace

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Dr Bharati Singh, Senior Lecturer at Staffordshire Business School

I knew when I was joining Staffs last year that I was going to be part of a connected University. During the various inductions and trainings that I had, it was obvious that being active on social media was expected. So, I opened an official FB page and a Twitter account. I already had a profile on LinkedIn and other academic research sites.

However, almost a year down, one of the things that I have procrastinated on is writing a blog. I did not know what to do and where to start from. I am struggling to write articles out of my own thesis so a ‘blog’ about something that interests me was hard coming by.

I googled on ‘how to write a blog?’ and there were suggestions galore. The list of dos and don’ts was long. I pondered and contemplated and deliberated on what interests me and what could I write to draw the attention of readers.

I had worked for many years in the corporate world which included traveling and working with various multinationals and different nationalities before changing directions towards a full-time academic role.

In this role, having just attended the Business Staffs graduation ceremony, an idea for a blog started to take form in my mind. This emanated from the general conversations I had with the graduands and the pride for some to have already secured a job and the primary aim of others to secure a job as quickly as possible.

I knew then that I had to share my experiences of having worked with large multinational companies and banks and to provide some insight about work culture and ethics to my students and anyone in general.

One can face both success and failure at work. It is part of life as much as is birth and death. I am not trying to be macabre here but just dishing out some hard facts. You will not like some people at work and some people may not like you. So where is it that you can make a difference?

Integrity, honesty and being true to your job are first and foremost. Sometimes job descriptions can be misleading but never despair. Give it your all because you will need that recommendation letter when you do move on to your dream job.

 

The other important fact to remember is: what goes around comes around; so maintaining relationships is very important with people you like or don’t like. You never know who you will meet at any given point of life: the world is round.

Words can never be retracted so be careful what you say, to whom you say and when you say. Be mindful of the external environment (and I don’t mean the weather here).

Finally, never be afraid to own up to your mistakes. A very important lesson that I had learnt at a very young age (courtesy Reader’s Digest): the least important one word is ‘I’ and the most important six words are ‘I admit I made a mistake.’

Dr Bharati Singh, Senior Lecturer at Staffordshire Business School

Twitter: @BharatiCSingh

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BHS Death: Who is to Blame?

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Image: The Herald, Scotland https://goo.gl/X59KeM

British Home Store (BHS) was born in 1928 with steady expansion growth and increasing competition with rival stores that bring excitements to the British workforce and customers. In pursuit of survival, BHS has undergone several successful surgical operations in the post-war era such as expansion across the UK, merging and franchising its brand. Many feared that BHS survival chances would diminish in 2000 when Sir Philip Green took charge of the company health affairs, but he dismissed the fears. However, sickness symptoms were confirmed in 2005 when BHS announced its losing customers to rivals. After several attempts to revive BHS, the health continued to deteriorate. This continued until 2015 when it was transferred to Dominic Chappell, unfortunately for BHS its health has gone beyond resuscitation. In 2016, the once healthy and competitive BHS was in coma without a chance of survival.

Losers

Although all BHS stakeholders were disappointed in the news of its death, this has different implications for different stakeholders. During its heyday, BHS had 163 stores, 11,000 British workforce that comprised direct and indirect staff, servicing 22,000 pensioners, tax-payer, and 1.2m British loyal customers. These were the biggest losers as the death of BHS significantly changed their way of life and in some cases, it threatened their survival as well.

Image: Drapers, https://goo.gl/vDGG41

Companies Act 2006

The Companies Act 2006 s830 specifies that companies should only distribute a dividend to the shareholders from the profit available or accumulated profits. This profit should be after deducting its accumulation losses. Also, Companies Act 2006 s172 specifies the duties of company’s directors to act in good faith with the aim of promoting the company’s success for all its members. In the case of BHS, members include all the stakeholders such as employees, pensioners, customers, suppliers, creditors, government, UK taxpayers, and shareholders.

Many commentators argued that Sir Philip Green and his family members along with other shareholders did not regard corporate governance or Companies Act 2006; and they made decisions on the BHS activities in their personal interest to the detriment of the other BHS members. Other commentators believed that The Green family and other shareholders enjoyed unfettered access in the heart of BHS; that was cleverly done with a complex company structure and inter-company transactions that include £422m dividend pay-out against £208m profit, £10m loan interest, £151m rent received from sales and lease-back, £250m management charges and £3m ground rent, all received from BHS. As a result, between 2000 and 2015, the pension fund has fallen from £5m surplus to 571m deficits and BHS survival and going concern was set on a slope.

Structure of Taveta Group (Controlled by the Green Family): Source from HC Committee Reports, https://goo.gl/reA7Er


International Standards on Auditing

The International Standards on Auditing (UK) specifies that the objective of the audit work on the financial statement is to give reasonable assurance. This assurance should be included in the auditor’s report to highlight whether the financial statement is free of error or fraud. Although, it is not a guarantee that material misstatement due to error and fraud will always be detected when audit work complies with ISA (UK). However, the ISA (UK) requires that auditor should exercise professional judgment in identifying and assessing the material risks in the financial statements. Auditors are required to design and perform audit procedures that are responsive to material risks, and to obtain appropriate, and sufficient evidence regarding the business activities from audit procedures upon which audit opinion will be formed. In this regard, PricewaterhouseCoopers (PwC) audit design and procedures failed to detect or raise going concern issue during 2015 audit when BHS was sold for £1.

PwC Leeds firm audited BHS Group Ltd financial accounts for the 74 weeks to 29 August 2009 and since then they continued to audit BHS financial account till 2015. They are also the auditing firm for other Green Family companies such as Taveta Investment Limited and Taveta Investment (No.2) Limited, the parent companies of BHS. Commentators believe that this could have created threats to their objectivity due to possible close or personal relationship with the Green family and non-audit fee (audit fee ratio of up to 8:1). These threats include familiarity, intimidation, and self-interest as the audit firm and senior partner may not be necessarily sceptical and may be sympathetic towards the directors and employee with whom they have a relationship.

Image: Accountancy Age, https://goo.gl/ZVN1Yu

On the 13 June 2018, the Financial Reporting Council (FRC) halted the over 30 years career of Steve Denison a senior partner with a 15-year ban and £325,000 fine. PwC accounting firm was fined £6.5m and FRC will be monitoring their practice over the next three years.

Blame

In my opinion, the directors of BHS acted unethically and with total disregard for the Companies Act 2006 and corporate governance in discharging their duties between 2000 and 2015. Considering the consequences of their actions, the innocent pensioners, direct and indirect employees and taxpayers will pick up the bill for the BHS pension deficit. It is unfortunate that those directors got away with just over £363m fines without a ban from serving as company directors in the future or possibly jail terms.

However, as much I would like to agree with  PwC that their failure could not have contributed to BHS death, from a professional viewpoint, they have the duty not only to advise the BHS board of directors, but the 2015 Audit Report should have explicitly raised going concern issues. This would have raised other stakeholder’s awareness as the Audit Report would have been available to the public through Company House.

Mayowa Akinbote ACCA, MA, PGCHP, FHEA, BSc.                                                Lecturer in Accounting and Finance                                                                        Staffordshire Business School

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Second Report-ASAP meeting

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The second national meeting of the Report ASAP took place on the 11th and 12th of April in Milan, Italy, hosted by our partner EUROCREA Merchant. All project partners were represented.

The meeting atmosphere was very friendly and collaborative, and everyone was highly motivated.

In this second meeting, the results of the first intellectual output “the Knowledge Gap Framework” was wrapped up. The results of the surveys conducted in the six participating countries (UK, Spain, Italy, Croatia, Bulgaria, and Greece) were presented and discussed.

Also, the foundations for intellectual output 2 “the Training Course and Trainer’s Guide” were set including setting the timeframes for the project’s milestones.

 The next meeting of the consortium will be at the beginning of November in Spain.

All this hard work was complemented by the Italian nice food, culture and hospitality.

For further information about the Report-ASAP project go to https://report-asapproject.eu.Logo

Untangling the link between productivity, exporting and innovation of a firm through Brexit

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By Ema Talam  and on twitter @ematalam

It is often claimed that the United Kingdom has benefited from joining European Union in terms of its economic performance. On the other hand, some authors argue that the rate of economic growth in the United Kingdom did not rise as a result of its accession to the European Union in 1973[1] (Coutts et al., 2018).

However, different estimates show that the United Kingdom will experience negative consequences of its exit from European Union, but the magnitudes of those estimates vary. The impacts on productivity are argued and there is no general consensus of the scale that Brexit will affect overall productivity in the United Kingdom.

Coutts et al. (2018, p. 20) state that “no aggregate link exists between trade and productivity for advanced open economies, unlike emerging economies where a relaxation of constraints on trade allow multi-national companies to enter, and to raise both exports and productivity”. At the same time, Dhingra et al. (2017) recognise that losses in terms of productivity are possible and list several factors that may contribute to productivity and welfare losses such as: “reductions in the variety of goods and services, weaker competition, the erosion of vertical production chains, falls in foreign direct investment (FDI), slower technology diffusion, less learning from exports or lower Research and Development” (p. 3).

Productivity, exporting and innovation of a firm are three seemingly distinct concepts. More in depth analysis shows that these concepts are indeed related and that it is almost impossible to examine either one of them without examining the other two. Characteristics of exporters and innovators depict well the extent of the link between the three concepts:

  • Exporters tend to be more productive than non-exporters (Wagner, 2007; Damijan et al., 2010; Caldera, 2010; Movahedi et al., 2017) and often have higher productivity growth (Wagner, 2007).
  • Furthermore, exporters are more likely to innovate (Damijan et al., 2010; Caldera, 2010), spend more on innovation (Caldera, 2010; Monreal-Perez et al., 2012) and have more (major) innovations (Bleaney and Wakelin, 2002; Monreal-Perez et al., 2012) than non-exporters.
  • Innovators tend to be more productive (Bleaney and Wakelin, 2002; Damijan et al., 2010; Caldera, 2010; Cassiman et al., 2010; Movahedi et al., 2017) and are more likely to export (Bleaney and Wakelin, 2002; Damijan et al., 2010; Cassiman et al., 2010) than non-innovators.
  • Exporters and innovators also share the set of common characteristics: they pay higher wages (Bleaney and Wakelin, 2002; Caldera, 2010) and are present in the sectors characterised with higher R&D intensity and greater amount of intra-industry trade (Bleaney and Wakelin, 2002).

A recent report published by Centre for Cities (2018) shows that in Britain, exporters constitute more productive firms. Figure 1 shows that British economy is characterised by large number of firms with low levels of productivity, but also that local service firms are predominantly less productive firms. Exporting firms account 13.2% of all the firms examined. The share of exporting firms among the top ten per cent of the most productive firms in 2015 was 31.2%, while the share of exporting firms among bottom 33 per cent was 5.6% in the same year. (Centre for Cities, 2018).

Figure 1: Productivity of all firms

Figure 1: Productivity of all firms, UK (2015)

Figure 2 Productivity of exporting firms compared to local service firms in the UK (2015)

Source: Centre for Cities (2018) The wrong tail-Why Britain’s ‘long tail’ is not the cause of its productivity problems.

*The report indicates that productivity was calculated as “gross value added per worker at a branch level” (Centre for Cities, 2018).

** Original data source is limited to non-financial business economy

***Only private sector productivity was examined

**** Article in Financial Times (Strauss, 2018) on the report indicates that, in this case, all firms engaged in markets beyond their local one are considered to be exporters. However, it can be assumed that certain portion of these firms export abroad as well.

The link between exporting and productivity is also theoretically grounded. It is commonly hypothesised that exporting and productivity are linked in the following manners:

(1) self-selection hypothesis, suggesting that more productive firms self-select into export markets, and

(2) learning-by-exporting hypothesis, suggesting that firms increase their productivity by participating in export markets (Wagner, 2007). Empirical findings prove the existence of both the link leading from productivity to exporting (Caldera, 2010; Cassiman and Golovko, 2011; Movahedi et al., 2017), as well as the link leading from exporting to productivity (Damijan et al., 2010).

Furthermore, previous research shows that exporting is linked to innovation (Damijan et al., 2010) and, at the same time, that product, process and organisational innovation have an influence on exporting (Basile, 2001; Bleaney and Wakelin, 2002; Caldera, 2010; Cassiman et al., 2010; Cassiman and Golovko, 2011; Monreal-Perez et al., 2012; Fryges et al., 2015; Azar and Ciabuschi, 2017).

Some authors suggest that there exists complementarity between exporting and investment in productivity, in the sense that one raises the profitability of the other (Lileeva and Trefler, 2010). Firm’s productivity can be tackled through factors internal to a firm (i.e. managerial practice and talent, quality of labour and capital inputs, decisions about firm’s structure, etc.) and influenced by the factors that are external to a firm (i.e. productivity spillovers, intramarket competition, regulations, etc.) (Syverson, 2011).

Empirical research has shown that innovation positively influences productivity (Cassiman and Golovko, 2011; Movahedi, Shahbazi and Gaussens, 2017).

Four types of innovation can be distinguished:

(1) product innovation, “the introduction of a good or service that is new or significantly improved with respect to its characteristics or intended uses” (OECD/Eurostat, 2005, p. 48),

(2) process innovation, “the implementation of a new or significantly improved production or delivery method” (OECD/Eurostat, 2005, p. 49),

(3) marketing innovation, “the implementation of a new marketing method involving significant changes in product design or packaging, product placement, product promotion or pricing” (OECD/Eurostat, 2005, p. 49), and

(4) organisational innovation, “the implementation of a new organisational method in the firm’s business practices, workplace organisation or external relations” (OECD/Eurostat, 2005, p. 51). Schmookler (1954) suggests that size of the market is one of the determinants of the level of inventive activities.

Brexit will almost certainly result in larger trade costs for the firms involved. Van Reenen (2016) indicates that there are three distinct categories of trade costs that will increase following Brexit:

“(i) higher tariffs on imports;

(ii) higher nontariff barriers to trade, arising from different regulations, border controls, and the like; and

(iii) the lower likelihood of the United Kingdom participating in future EU integration efforts, such as the continued reduction of nontariff barriers”.

Following the lines of the discussion above, trade costs are likely to have a greater impact on the more productive firms in the British economy. Also, due to the existence and the complexity of the links between exporting, productivity and innovation, adverse effects can be expected to go beyond influences on productivity.

References – blog post – v246

By Ema Talam  and on twitter @ematalam

[1] EEC at the time.

The World Cup: Sports tourism bringing Nations together?

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By Carol Southall, Senior Lecturer, Staffordshire Business School

 

In recent years the phenomenon of sports tourism has grown in popularity, not least because of technological advances facilitating online ticket bookings and confirming event and venue scheduling. Sports tourism is certainly one of the fastest growing sectors of the global travel industry and refers to travelling to another destination, away from where the traveller normally lives and works, in order to observe or participate in a sporting event.

The Russia World Cup 2018 is an opportunity to bring people together from different nations across the world with a common interest…diversity, and of course football! Spread over 1,800 miles from Kaliningrad on the Baltic coast to Ekaterinburg at the foot of the Ural mountains, 12 stadiums across Russia will host the 64 matches that comprise the 2018 FIFA World Cup. Luzhniki Stadium in Moscow, the largest venue and one of the newest, will hold the first game of the tournament on 14 June and also the final, 31 days later. England’s first match against Tunisia on Tuesday 18th June at the purpose-built Volgograd Arena, almost 600 miles south-east of Moscow, is likely to be a key draw for the thousands of football fans heading to Russia.

Covering over 17 million square kilometres, 11 time zones, and with a population of almost 147 million, Russia is the largest country in the World. With over 200 ethnicities and ethnic groups and more than 100 languages and dialects, plus 28 UNESCO World Heritage sites and several thousand museums, Russia is working hard to promote its tourism potential. Interestingly on the Russia Travel website, to which fans applying for a FAN ID are directed when they enquire about tourism opportunities during their stay in Russia, there is a reference to the ‘Miracles of Russia’ in the host towns and cities, and the fact that “all these have nothing to do with the habitual stereotypes of Russia”. This is evidently an ideal opportunity to debunk some myths surrounding perceptions of Russia as a destination.

Red Square, Moscow, Russia

Studies show that major events can be a positive force in bringing nations together and enhancing and strengthening national identity. Whether Russia needs to strengthen its national identity, or indeed which countries need to strengthen their national identity, is a moot point. What is clear is that any such tournament that brings the world together should only serve to strengthen national pride and identity and facilitate an element of cultural understanding.

As a traveller you often find that wherever you are in the world, the common language is football. You may not be able to hold a conversation in a native tongue beyond ‘hello’ and ‘thank-you’ but mention the relative merits of the better-known English football clubs and you can hold a conversation for the duration of a taxi ride.

Clearly participation in football, whether as a player or spectator, plays a major role in social and global cohesion, enhancing social capital. Football creates its own world order, deviating from the hegemonic power relations that characterise world politics. Conversely, the mutual respect and consideration that should be evident in all international sport tourism is sometimes overshadowed by political tensions, causing hostility where there should be empathy and understanding.

Since the selection of the host nation, 8 years ago, political tensions have certainly overshadowed the event. The BBC recently reported that England should wear black armbands during the World Cup to protest against the Russian regime, with a prominent MP suggesting that the FIFA tournament is a massive propaganda coup for Russia. Additionally the violent clashes between English and Russian football hooligans at Euro 2016 have led to concern of a repeat performance at the 2018 World Cup. Russia’s significant investment in the tournament, and the need to avoid any tarnishing of the event, has led to Russian hard-core supporters being contacted by police and officially warned to behave. Similarly local UK supporters have also been warned, and in some cases had their passports confiscated by police for the duration of the tournament.

The role and responsibility of football in the world is significant and its importance in social cohesion and nation building should not be underestimated. Conversely, we should also recognise the power of football to incite violence and xenophobia. Regardless of the political tensions that overshadow the tournament this year, it is hoped that the UK and international sports tourists travelling to Russia on their FAN IDs (a personalised spectator’s card – offering visa-free entry to Russia for supporter’s holding World Cup tickets) will take the opportunity and time to explore, experience and engage with Russia’s culture and people. Only then can there be any hope of the mutual respect and understanding that football has the power to facilitate.

Follow Carol on twitter @cdesouthall

FdA Visitor Attraction and Resort Management


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‘Made in Dagenham’

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By June Dennis, Dean of Staffordshire Business School

In 1968, some 50 years ago, a group of women machinists at Ford Dagenham went on strike and campaigned to be recognised as skilled workers.  The women trained for 2 years as machinists but were paid just 85% of what male unskilled workers received.  Although they only achieved partial success – the women did not get upgraded but received an increase in pay to 92% of what a male cleaner would earn – this well publicised campaign was considered a major stepping stone in the establishment of the Equal Pay Act of 1970, now superseded by the Equality Act 2010.

I recall watching the film ‘Made in Dagenham’ about the Ford Dagenham workers some years ago whilst on holiday with my two daughters, then aged 15 and 12.  As we discussed the film afterwards, I realised even then that it was going to be one of those defining moments in their development.  It also gave me an opportunity to tell them of some of my experiences. For example, as a final year student at a job interview I was asked ‘shouldn’t you be warming your husband’s slippers by the fireplace rather than working here’.

Dr June Dennis - the new Dean of Staffordshire Business School

June Dennis – the new Dean of Staffordshire Business School

Later in my career, I recalled being told by a very well meaning male colleague that I hadn’t been given the role as link tutor for a partner in India because I had a young family and might not be able to cope with a couple of trips abroad.  I was also able to tell them about my parents being role models – both were nurses and on the similar pro-rata salaries for much of their careers, although, it was my mother who worked part-time and unsociable hours to fit around the family.  I started my own business and subsequently became a lecturer because I could not maintain an international marketing role with a young family.  Neither of my daughters had been aware that such discrimination had existed to such an extent nor that their aspirations might still be curtailed by social and workplace norms about gender roles.  Some seven years later, both are intelligent, articulate and confident women who are already role models to younger teenagers.

This year, around 10,000 organisations with more than 250 staff were required to publish data about their gender pay gap on a Government website.  The results, released in April 2018, showed that there are still stark differences in the amount women get paid compared to men and also in the proportion of women on higher incomes within organisations.  The median pay for women is nearly 10% lower than for men and some 78% of organisations pay men more than women overall.  Smaller organisations, with less formal pay structures may have even greater variances.

Some 50 years on, it is less likely that a woman will be paid less for the same job, although the recent revelations about the pay of BBC staff demonstrates that this still exists. However, some of the pay difference can be attributed to the fact that women are still more likely to take part-time and lower paid jobs which they can work around other commitments.  This may be by choice or by necessity.  Career breaks also have an impact on overall salary.  However, there are still many structural inequalities of opportunity and social barriers that hinder progression for those women who wish to progress.  Such barriers include expectation to attend early morning or ad hoc late meetings, ‘golf course’ business networking events, requirement for overseas travel when promoted and, more subtly, expectations from friends and family – I don’t recall any well-meaning friends questioning my husband about his family loyalties when he had to work away from home, for example….

Until societal views permit both men and women to choose whether they want to work full or part-time, progress up the ladder or not or take parental leave or not, then I suspect any legislation will have limited impact on these statistics.

Contact June at june.dennis@staffs.ac.uk 

 

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.

Preparing for Brexit: Economic forecasts versus wishful thinking

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During the Referendum campaign, Michael Gove notoriously commented that the British public had “had enough of experts”, in particular of economic forecasters. This article explains a little about (i) economic forecasting and (ii) why economic forecasts may be useful even if they cannot be completely accurate.

Economic forecasting is like medical diagnosis. The economy and the human body are both complex systems that are still imperfectly understood. Your GP has to make a diagnosis on the basis of limited information: headache; flue; or meningitis? From the perspective of public health advice, the situation is no less difficult. For example, official advice on diet is much contested. Advice changes as new evidence becomes available.

When economists forecast or predict the impact of Brexit, they start with a diagnosis of the current “health” of the “patient”. Is the UK economy delicate or in rude health? Since experiencing the economic equivalent of a heart attack during the Global Financial Crisis of 2008-09, the UK has undergone stagnant productivity (and, hence, wages), low investment, record levels of household debt, public sector austerity, and now low growth during a world economic upturn. Economists diagnosing the patient along such lines would tend to recommend against administering a shock to the patient. However, economists, like doctors and medical researchers, differ in their diagnoses. Other economists might point to unprecedented levels of people in employment and conclude that the UK economy is more or less fit, and that Brexit is just the tonic needed to make it thrive.

Even when medical experts can give an accurate diagnosis (headache or a brain tumour), they will typically be unable to give a completely accurate prognosis (if the diagnosis is a brain tumour, does the patient have weeks, months or years to live?). There are too many unknowns. However, the well-trained and experienced medical expert may be able to give useful guidance. It is similar in economic diagnosis/prognosis (or, in economic terminology, analysis/forecasting). Government ministers confronted with politically inconvenient forecasts often dismiss them by pointing out that forecasts are predictions of the future, which is unknown. In any case, they often continue, economic forecasts are usually wrong. Yet, just as medical diagnosis and prognosis are useful for guiding treatment, so economic forecasts – even though not precisely accurate – can be useful for guiding government policy. For example, forecasts of economic growth enable the planning of government borrowing and/or tax changes to fund spending commitments. Such forecasts offer broad guidance on the future state of the economy and thus a rational basis for policy. In short, expert forecasts are the alternative to wishful thinking. As such, economic forecasts help to guard against astonishment and panic as the drivers of policy.

One reason why economic forecasts were so easily dismissed during the Referendum campaign – and subsequently – is that most forecasters failed to foresee the Global Financial Crisis. Unfortunately, for most – although by no means all – reputable economists, financial crisis was an “unknown unknown”. (In public health, a rough analogy would be failure in the early 1980s to predict the appearance and rapid spread of AIDS.) In contrast, forecasting the economic effects of Brexit – and now its more or less “hard”/”soft” variants – is to think about “known unknowns”. “Known”, because we know roughly what is coming; but “unknown”, because we cannot know its precise consequences. The consequences of Brexit are unknown and so must be estimated – in other words, forecast. In preparing businesses and government for Brexit, economic forecasts, if used within their limitations, have the potential to enrich understanding of likely threats and opportunities and thus improve preparations.

Disclosure: the author voted Remain, and would do so in future if given the opportunity.

Professor Geoff Pugh, Staffordshire Business School

Three Grassroots Organisations And Why The Future Of UK Esports Looks Bright – Jamie Wootton

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Jamie Wootton is an esports blogger and enthusiast who started his blog, ‘Watch This Space’, in early 2018. Since then he has interviewed members of the UK esports scene including a photographer, Managing Director of an esports team and UK FIFA Commentator. Jamie also conducted an exclusive interview with Tom Deacon, former comedian and full-time desk host for Gfinity. Below is Jamie’s blog: ‘Three Grassroots Organisations And Why The Future Of UK Esports Looks Bright’

 

“Whilst it’s no secret that the UK esports scene has been lagging behind other nations in the majority of esports titles, the future is now looking bright for several reasons. Firstly, existing esports players and organisations are beginning to make a name for themselves. Recently, CS:GO player Smooya has joined Major Legends BIG, and exceL Esports had a quarter final finish at the EU Masters LOL tournament in Leicester; a tournament which featured some world renowned organisations and teams such as the Ninjas in Pyjamas and Origen. Secondly, a series of esports organisations have cropped up with the intention of promoting grassroots esports and helping improve the standard of play in the UK. The following article will explore three organisations that are helping the scene evolve including Gfinity’s Challenger Series; UKPL and Game’s Belong Arenas.

Gfinity Challenger Series

Gfinity’s Challenger Series has proved itself as being somewhat of a success. The subordinate league to the Elite Series supports competition in three different esports titles and showcases players who excel at their respective esport. Once the Challenger Series’ season is over, top gamers are drafted onto the esports teams that are part of Gfinity’s new franchised system. Although the league has elevated players to the next level of competition, the league faced some criticism at the beginning of its tenure. Some who were drafted into professional organisations were unhappy with their play time and disappointed at what little chance they had to prove themselves on the big stage. However, Kieran Holmes-Darby, exceL Esports’ owner, in a BBC3 interview, responded to this criticism by asking, “Why should it [the path into professional esports] be easy?” Despite some teething problems, talent drafted in through the Challenger Series have worked themselves to the top of their respective esports and proved themselves to be top tier professionals. Rannerz for instance, along with his team mate Zimme, managed to pick up the Gfinity Elite Series Season 3 trophy for their organisation AS Roma Esports Fnatic. Rannerz proved himself in the Challenger Series and was drafted in by one of the world’s most elite organisations and went the distance to demonstrate why he is the best.

UKPL

Inspired by ESEA’s RankS and created on the foundations of Faceit hubs, UKPL has become the proving ground for semi-professional, and professional, CS:GO players in the UK. It has provided them with a platform to rise through the ranks and progress to the globally recognised FPL, from which, many of today’s young Counter Strike professionals, such as Mousesports’ Ropz, have elevated their performance and made a place for themselves in pro scene. Despite its infancy, UKPL offers competitors prizes for placing in certain positions in their leagues and caters for upcoming talent, giving them a podium from which to get noticed and picked up by UK or international organisations. UKPL by nature is grassroots, however not the badly run and embarrassingly unorganised type of grassroots. On the contrary, the service is run by some of the scenes most experienced professionals and boasts having the likes of seasoned veteran MightyMax, Epsilon Esport’s very own coach Kieta and an industry leading observer in the form of Sliggy in the role of admins. The circuit’s 4 leagues offer their 4000+ members a chance to shine, progress and prove themselves to outside organisations.

GAME’s Belong Arenas

GAME’s Belong Arenas aren’t the first of their kind in the UK as similarly styled gaming centres and tournament venues have been around for decades now. However, having been there and experienced it first hand, I get the impression that they have nearly perfected the gaming centre experience. Although GAME itself is a nationwide chain and its Arenas follow suit and therefore would struggle to be classed as grassroots, I do believe its fair to say that the steps the business is taking are in the interest of grassroots esports and appear to have a focus on improving the scene. Due to there being 19 Belong Arenas across England, Scotland and Wales with each being backed by GAME, they can all compete against one another. By joining their local Arena’s “tribe”, players from any background can compete against other Arena’s “tribes”. Members of tribes take part in weekly events and community nights at local Arenas and, at the end of season, a grand final takes place. Recently, the grand final took place on a large stage at Insomnia 62 and saw tribes battling it out, each representing their region, for glory. Watching it live in person surrounded by roughly 100 other engaged spectators felt awesome, but I can’t begin to imagine what it must have felt like from the players perspective. It must have been so surreal. Whilst this sort of opportunity doesn’t provide teams and players with a contract or salary, it does provide a platform from which competitors can experience a professional competitors lifestyle and, as such, compete and prove themselves on big stages in front of hundreds.

So, to conclude, whether it’s the Challenger Series’ efforts to put players into a premier competition through a sound league and drafting system; UKPL’s determination to improve the UK CS:GO scene by providing an environment for UK players to play and shine amongst one another or even Game’s push to build a communally competitive spirit in their Belong Arenas by hosting community nights and regional tournaments, grassroots esports in the UK is looking like it’s on the up.”

Jamie Wootton, Esports Blogger 

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