My interest in business or commercial activity first started when a work friend of my Mum visited our family. She brought a book on commerce which is what business studies would have been called decades earlier. I read the book and that piqued my interest.
At the end of your third year in secondary school you are allowed to pick optional classes that you will take exams in. this is supposed to be something that you’re free to chose.
I was interested in business studies (partly because my friend Joe was doing it). But the school decided that they wanted me to do physics and chemistry instead and they did the same for my advanced level exams because I had done well in the normal level ones. School had a lot to answer for, but fortunately I managed to get back on track with college.
Eventually I finally managed to do pass a foundational course at night school whilst working in industry. I used that to then help me go and study for a degree in marketing.
I work in advertising now. And had previously worked in petrochemicals, plastics and optical fibre manfacture. All of which revolve around business. That’s why you find a business section here on my blog.
Business tends to cover a wide range of sectors that catch my eye over time. Business usually covers sectors that I don’t write about that much, but that have an outside impact on wider economics. So real estate would have been on my radar during the 2008 recession.
I was taken back to to memories of Skeleton Records in Birkenhead during the early 1990s due to a Taylor Swift album mispress. As a young record buyer I used frequent secondhand record shops to pick up promo copies of records. A rock orientated shop would often not realise what they had, this was before widespread internet access.
The gaunt middle-aged shop assistant was sat behind the counter looking at a picture disc of Fish – State of Mind on picture disc. Fish had recently left then popular rock band Marillion and State of Mind was a single from his first solo album Vigil in a Wilderness of Mirrors.
Apparently one of his customers worked as an assistant shop manager, realised what they had and ‘lost’ the record before the distributor came to collect all the copies of the mispress. The reason why the distributor would want to collect the records? Because they played Madonna’s Cherish instead. The shop assistant said to no one in particular, that will be worth something one day. He wasn’t wrong, I have seen prices quoted as high as 650 dollars paid – if the right Madonna or Marillion completist collector actually finds a copy for sale.
Taylor Swift Speak Now Concert at Heinz Field by Ronald Woan
A similar thing happened to Taylor Swift fans this week, who ordered her latest album and ended up with Taylor Swift artwork, but songs from the early 1990s electronica compilation Happy Lands volume 1 playing instead.
This mispress became know as the ‘cursed version’ presumably because of its dark electronic sounds featuring Cabaret Voltaire and others. They might be able to take heart when they realise the such mispresses have become collectors items in the past with an appreciating value.
Back when I was a child, the oil refinery was a cathedral to industry rather than a climate crime scene and working in the oil industry was a cut above working in other industries.
3D printing industry gripped by intrigue, litigation and churn | Financial Times – 3D printing or additive manufacturing is currently used for small batch manufacturing by the likes of GE, Rheinmetall, Airbus and Lockheed Martin. You had a similar set up with CNC milling (including multi-axis machines) and multitasking machines which were confined to manufacturing ‘cells’ until Apple went out and bought thousands of them and had them running in parallel on Foxconn lines manufacturing iPhone chassis’. Additive manufacturing needs its ‘iPhone moment’ to cross the chasm to mainstream use. That is reliant on an innovative client rather than supplier innovation and the current players like Stratasys aren’t in a position to drive this next stage of innovation, but their customers might be.
Letter Statement March2023 | DAIR – Tl;dr: The harms from so-called AI are real and present and follow from the acts of people and corporations deploying automated systems. Regulatory efforts should focus on transparency, accountability and preventing exploitative labor practices.
A story caught my eye in Hong Kong’s English language establishment paper related to Chinese bank risk. Goldman Sachs issued a report on (maybe) five Chinese banks, changing their ratings to neutral and sell. Eastmoney.com is a subsidiary of government newspaper People’s Daily, came out to stoutly defend the banks against concern about Chinese bank risk.
Ping An Bank and China Merchants Bank have the largest exposure to real estate, accounting for 8% and 6% of total assets which the report authors are flagging as a canary in the coal mine for Chinese bank risk
CMB real estate loans accounted for 5.61% of about of total loans and advances
Ping An Bank real estate-related business bearing credit risk totalled 322.093 billion yuan, also down from the end of the previous year, and if this is taken as the numerator and divided by its total assets of 5.456 trillion yuan, it yields a share of about 5.9% – interesting choice of wording
Overall, the non-performing rate of the mainland real estate industry is still in a period of accelerated exposure in 2022, and the overall non-performing rate of listed banks for public real estate continues to rise to over 4.3%
There was a reference to “Industrial Bank” that has “deteriorating assets and liabilities” – I think that this is Industrial and Commerce Bank of China better known as ICBC. ICBC is recognised as a systemically important bank
Systemically important bank means that Chinese bank risk becomes global economic risk. While it is state-owned (being one four original institutions that spun out of the Bank of China in 1979), it still exposes retail shareholders and bond holders around the world. Word on the grapevine is that a number of Goldman Sachs partners had long term holdings in ICBC for well over a decade, which explains the banks irrational exuberance for China AND means it would have been extremely hard for the analysts to name check ICBC in this kind of report. During the 2006 IPO, Goldman Sachs purchased a 5.75% stake for US$2.6 billion, this apparently was the largest sum Goldman Sachs has ever invested at the time.
ICBC. Foggy night. – QuantFoto released under a CC licence
Of course issuing this kind of report in China means that they can’t talk about associated Chinese bank risk. For instance:
Local governments depend on property development for their main source of revenue and have issued a lot of debt which they may now find harder to pay off resulting in further Chinese bank risk. Given that this is more directly linked to government, it may get less scrutiny
Finally China’s industrial and services economic growth seems to be an issue with youth unemployment running very high at 20%
Trying to get reliable economic data on China as the government data tends to ‘harmonised’. Part of the problem is the information that local governments provide the central government and part of it is central government choosing to ‘tell the best China story’.
Expect China to increase solar panel dumping due to massive over-capacity. In addition these panels seem to be of low quality with a lower than expected panel life. Given the challenges that the Chinese are experiencing recycling the materials, they represent an environmental problem with a substantial risk of pollution.
Beyond belt-tightening: How marketing can drive resiliency during uncertain times | McKinsey – interesting read that’s about 50 percent right, probably too much of a bottom funnel focus and a more critical consideration of the marketing technology stack McKinsey are about 50 percent right. One thing that they haven’t done is leverage the marketing science research supported by the Institute of Practitioners in Advertising on relative marketing spend and relative impact on market share. Also in-house agencies have serious problems due to cultural issues in clients.
The Eagles Announce ‘Final’ Tour Dates – Variety – following the lifecycle of their customer base. The Eagles attitude to covers, remixes and sampling always sat badly with me which is why I never bought any of their music new. I am sure this tour will keep them wealthy for the rest of their lives however
Interesting YouTube clip about how open source software is being used to extend the lives of Nissan Leaf electric cars. It raises interesting points for consideration about the right to repair debates that have been happening in areas like agricultural machinery through to Apple smartphones.
The devil is in the details of the claims and the research with regards ChatGPT driven trading. TL;DR ChatGPT didn’t trade any better and ChatGPT 4 did worse than earlier versions, implying random chance rather than ability
The North America semiconductor corridor looks at Mexico, the US and Canada as a potential production capacity eco-system for the semiconductor industry. The North America semiconductor corridor is framed in terms of increasing resilience in security. At the moment the semiconductor industry for reasons of cost and supply chain ecosystem is focused on the US Pacific coast and Asian countries from Singapore to Korea that face on to the Pacific.
In the North America semiconductor corridor also has a political advantage bringing back more high value jobs across Canada, the US and Mexico. There are considerable challenges to the North American semiconductor corridor from talent to energy and water requirements. The US CHIPS and Science Act has looked to catalyse some of the change required.
Ancient monuments to the dead
The summer solstice on Wednesday reminded me of Ireland’s stone monuments. Some like Newgrange have a calendar type element, but most of them are solely monuments to the dead. The megaliths continue to guard their secrets well despite the educated deductive reasoning of archaeologists.
Wilkie Collins radio dramas
Wilkie Collins along with Arthur Conan Doyle invented what we now know as the detective genre. This stream of Wilkie Collins dramas is better than modern productions on BBC Radio 4.
Technics SL-DZ1200
Techmoan did a review of the Technics SL-DZ1200. I am a big fan of the DZ1200 over Pioneer’s CDJ devices and they did a good rundown of the device. Hopefully, the DZ1200 will come back in a new and improved form if Technics relaunch of the SL-1200 is sufficiently successful?
Microsoft Auto PC
Auto PC
Back when I worked agency side on Microsoft I never heard about the Microsoft Auto PC experiment which seems to be Microsoft’s abortive move into in-car entertainment and information systems. This seems to be alongside the more successful personal digital assistant and nascent smartphones. It’s fascinating to see technologies like voice recognition, iRDA, compact flash (but not as a music media) and USB being incorporated because these capabilities were being put into future PDA and smartphone products.
CES launch
It was launched at CES in 1998 according to the Microsoft corporate website. It’s interesting, I still have similar problems with voice recognition.
Directions
The rudimentary directions software was similar to the turn-by-turn direction print outs that I ordered from The AA Route Planner service. during the mid-to-late 1990s for long journeys – but on your stereo screen. A similar approach was also taken by Palm app Vindigo for pedestrians about the same time. Disclosure: I worked agency side on the launch of the Vindigo London guide alongside the work I was doing on Palm PDAs at the time.
(The AA Route Planner service still exists, but it is now online rather than something you ordered over the phone and received via the mail. However you can still print out turn-by-turn directions. It’s also likely to not send you on some of the interesting routes that modern navigation apps seem to manage.)
Clarion
I feel sorry for Clarion who were Microsoft’s only hardware partner. Clarion is now owned by Faurecia SE, a French headquartered auto parts manufacturer with Chinese car manufacturer DongFeng Motor Corporation who were the local partner to Peugeot, Nissan and Honda’s efforts in the Chinese market as a key minority shareholder.
I was sparked to lead this post based on footage that I watched about a priest in South India with regards a robotic elephant. Robots in religion have taken off in both Shinto and Hindu ceremonies.
Japan
Academics have widely talked about how the Shinto-based belief system have aided Japanese societal acceptance of robots, in comparison to western society. Secondly, Japanese authors have been exploring what it means to be human and what kind of dilemmas and opportunities do robots and AI bring in a future society. Robots in religion are a natural extension of robots in society.
Buddhism leads the way
What’s less commented on is that Japan’s buddhist temples have been leading robots in religion. The reality is that many Japanese see Shinto and Buddhism as complementary in nature and get involved in both beliefs.
Japan has some unique religious challenges that are interlinked. Temples are struggling as less people are active in their religious practice, the factors for this decline is multi-factorial in nature.
A second challenge that as the population shrinks roles need to be automated. What started in factories is now impacting the food and beverage sector (vending machines and restaurant robo-serving staff), so it was only a matter of time that robots in religion would supplement the clergy.
India
In India robots in religion is about kindness and de-risking religious ceremonies. In South India elephants take part in religious ceremonies. However the conditions that elephants are kept in can be cruel in nature and even result in death. Secondly, elephants can unintentionally kill or injure people involved in a religious celebration. This report on NHK World shows how robots in religion have been adapted to Hindu needs.
Finally, the elephant robot is used in celebrations over a large geographic area and is easily transported around. Robots in religion are likely to make even more sense as India urbanises even further, as the benefits are amplified in the denser environment.
How confucianism, communism (in particular Stalin’s take on Leninism) and an accident of history has led to the nationalistic, fragile, insecure Chinese state with imperial ambitions we know today.
China’s ‘trinket town’ at heart of push for renminbi trade | Financial Times – Yiwu was one of the first cities in China to allow individual merchants to settle larger cross-border deals in renminbi. Most cities have an annual cap of $50,000. Given Yiwu’s reputation for cheap goods and flexible terms, helped by the fact that wholesalers do not pay either corporate tax or market rent, exporters have sufficient bargaining power to request settlement in renminbi. “When you have only one place to go to purchase something, the seller sets the terms on how transactions are settled,” said James Wu, a Yiwu-based furniture exporter who began demanding renminbi payments from Middle Eastern clients last year – the last quote is a great example of
Interesting video from NHK World on how temples are adapting to a lack of new attendees and priests. I am not sure whether this is down to demographic change or the secularisation of society
A Pokémon-Card Crime Spree Jolts Japan – WSJ – Japan has been staggered by a Pokémon crime spree. Stores are now paying for banklike security to ward off villains who go to extraordinary lengths, even rappelling down the side of buildings, to plunder Pokémon. Hosaka was working in senior care when he had the idea of opening a cozy card shop in the suburb of Machida where customers could mingle at tables. Instead, he says, the little cards, “have become like Rolex watches, gold, silver, platinum or used cars.” – It makes sense when you think of the cards being ‘real life NFTs’
Criminal Rolex Gangs and Traveling with Watches, Part I – WOE – crime affecting luxury consumption. Interesting that London is a crime centre is prominently name checked alongside Johannesburg, South Africa. This will impact luxury retailers, luxury travel and hospitality and auction houses
Luxury
Bay Area Lawsuit Alleges Man Spent $220,000 To Get A Watch He Never Got – there’s also the added complexity of Shreve recently losing its status as a Patek AD. The lawsuit brings some ten causes of action against Shreve, including breach of contract, intentional and negligent misrepresentation, fraudulent concealment, false promise, and unfair business practices, pursuant to California’s Unfair Competition Law – this was only a matter of time. Its the same in the UK
Ad agencies and clients clash: tension over transparency in fees, services | Ad Age – a talent shortage has left agencies without enough senior executives to service accounts. Combined, such factors contribute to what marketers see as an increasing lack of transparency. One executive who leads procurement across marketing and content for a major consumer goods company said the discounts and rebates that media agencies, in particular, get from a media buy have always been “murky,” but one area agencies have always been transparent in is breaking down their fees. The brand executive said auditors, working on behalf of the marketers, have previously been able to get agencies to disclose their margins, overheads and salaries without protest—it’s standard practice and allows clients to know they are being charged a fair price. But that’s starting to change, they said, having run into issues with getting shops to break down their fees in the recent agency review their company underwent
Media
This Year Next Year: 2023 Global Mid-Year Forecast – GroupM – calls the end of radio’s global growth story. Even taking into account streaming, WPP says that, globally, ad-supported audio has peaked. It will grow just 0.3% this year, says GroupM then “remain roughly flat over the next five years”. It’s about to join newspapers, magazines and broadcast television in a downward trajectory. GroupM also tackles the impact of AI on the industry. It reckons that within five years, the portion of “AI-enabled” advertising revenue globally will be worth $800bn. What is impossible to quantify is whether any of that is new money. Most likely, none of it. What is also impossible to quantify is just how dramatic the AI-driven reductions in cost of production will be. That sounds a relatively benign question until one realises that all those reduced costs are human jobs. GroupM identifies five key themes: Regulation (particularly around data privacy); connected TV (and an annualised 10%+ growth in the segment)’; AI “is likely to inform, or touch in some way, at least half of all advertising revenue by the end of 2023”; retail media to overtake TV by 2028; and “new business growth” (which sounds like the sort of thing an agency person would put in their predictions). Most importantly though, the GroupM outlook points to a more more significant factor. We’re at the end of a cycle that was defined by shifts between advertising channels, and then the disruption of Covid. “We are at an inflection point where the secular drivers of advertising growth above and beyond GDP growth are maturing, the pandemic upheaval is receding and the dynamic rise of digital advertising has slowed. This is the basis of our underlying forecast of mid-single-digit advertising growth over the next five years. However, the pervasive impact of AI on the world of advertising could change that.”
AI at Work: What People Are Saying | BCG – leaders love it, workers don’t. Businesses have only addressed the needs of leaders, which probably dialled up the anxiety with a sense that AI is something that happens to you and your career rather like a bad car accident
Beeper — All your chats in one app. Yes, really. – clients like Adium became less useful as Google and other services went away from common protocols and the IM giants AOL, MSN and Yahoo! disappeared. Beeper are trying to address this
I spent part of the bank holiday weekend reading and finally managed to tuck into designer Bruce Mau’s signature book MC24. For those that haven’t heard of him Bruce Mau is a Canadian designer and academic. He founded a brand design agency: Bruce Mau Design which is now part of marketing combine Stagwell. His Massive Change Network (MCN) is in the transformation business similar to Stewart Brand’s Global Business Network (acquired by the Monitor Group now called Monitor Deloitte) and The Long Now Foundation. The philosophy of Bruce Mau and feels like it had been lifted from an amalgam of TED Talks. Bruce Mau believes in a sustainable future with techno-optimist bent to his views.
Bruce Mau, like Robert Greene has principles that seem to contradict each other. Publisher Phaidon have wrapped the hard back cover of the book in an iridescent satin fabric that a photograph doesn’t do justice to. Regardless of whether you think the book is a self-help bible, your creative muse, an objet d’art or something nice to thumb through on a Sunday afternoon Bruce Mau and his book MC24 are ideal.
China
Where China is beating the world – by Noah Smith – interesting article, although it lacks some nuance about Chinese development, consider it a starting point that you can explore in more depth from, rather than the full story
I have alluded to the impact of China’s new espionage law. VisualPolitik has pulled together a good video on how it’s being interpreted by multinationals, policy wonks and politicians. It will have precisely the opposite impact that China would like it to have on its economy.
Consumer behaviour
How many Britons agree with Andrew Tate’s views on women? | YouGov – so much in this. You also need to think about bias in questions, that its done online and the ‘you can think it, but you shouldn’t say it’ aspect of how Tate supporters might think about the questions
Interesting debate on how the ‘evangelical bloc’ has evolved over time from being primarily theological to being primarily political in nature.
How doctors buy their way out of trouble | Reuters – When federal enforcers alleged in 2015 that New York surgeon Feng Qin had performed scores of medically unnecessary cardiac procedures on elderly patients, they decided not to pursue a time-consuming criminal case. Instead, prosecutors chose an easier, swifter legal strategy: a civil suit. Qin agreed to pay $150,000 in a negotiated settlement and walked free to perform more cardiac surgeries at his new solo practice in lower Manhattan. Qin faced no judge or jury. He did not admit to wrongdoing. He maintained his license to practice. What’s more, neither Qin nor government officials were required to notify patients who purportedly were subjected to vascular surgical procedures they didn’t need. Those included fistulagrams to spot issues like narrowed blood vessels or clots, and angioplasties to open clogged coronary arteries. Within months of the settlement, a registered nurse working for Qin at his Manhattan practice alerted authorities that something seemed amiss. The nurse, who ultimately turned whistleblower, alleged to federal prosecutors that the surgeon was performing unnecessary procedures on patients, mostly elderly Asian and Black immigrants whose care was covered by the public programs Medicare or Medicaid. Prosecutors indicted Qin in 2018 on a felony count of fraud, which carried a maximum sentence of 10 years in prison. But in 2021, in a deal brokered behind closed doors, prosecutors dropped that charge in favor of yet another civil settlement, court records detailing that agreement show. Once again, Qin kept his New York license to practice with no restrictions; a restricted license is one of the few ways the public can learn that a doctor has been disciplined for bad behavior. Qin agreed to pay a total of $800,000 in annual installments ending in December 2025, deposited with the U.S. Department of the Treasury. As an added penalty, he was banned from billing public health programs until February 2025
Their inability to live up to the past German reputation for quality
Chinese manufacturers at the low-end
German automobile makers struggles with software
Japanese and Korean car manufacturers challenging the luxury end of the market. I would rather have a Lexus LX than a G-Wagen. At the moment Lexus have had to shut down the list on the LX they are that oversold
Hong Kong
chanhiu design – really nice graphic design. I love their project reflecting on Hong Kong-made knock-off toys familiar to Hong Kong children as well as European children – where these toys turned up in markets during the 1960s through to the early 1980s. More here: Chan Hiu explores Hong Kong’s playful past – The China Project
Cayman Islands fights attempts by Singapore and Hong Kong to lure Asia’s wealthy | Financial Times – the sharp uptake of Singapore vehicles versus Hong Kong vehicles is very interesting – an order of 10x magnitude greater. Interesting implications for Hong Kong’s wealth management business and China’s efforts to prevent capital flight from Greater China. It also implies that Hong Kong hasn’t been as successful at attracting foreign funds for investment in China. So the Hong Kong pivot towards the Middle East investor makes sense.
Apple expanding supplier base in China, Southeast Asia, and India – the number of manufacturing facilities/locations of Apple’s top 200 suppliers grew in 2022 in China, Japan, Thailand, Malaysia, the Philippines, and India. However, manufacturing facilities/locations in the US and South Korea have dropped from 72 to 62 and 42 to 36, respectively. The latest list shows that Apple’s supplier base in South and Southeast Asia is growing amid Apple’s diversification move. Meanwhile, Apple keeps expanding its reliance on China, a sign that Apple is likely to prepare for a decoupled global manufacturing ecosystem. Due to Apple’s change of methodology, disclosing only “locations” instead of “facilities,” the numbers of certain geographies, including Taiwan, cannot be compared historically. For example, Apple said that TSMC had five “facilities” globally in 2021 but had three manufacturing “locations” globally in 2022. The methodology change led to fewer listed manufacturing locations of Apple suppliers in Taiwan, from 72 to 41
