jerryking + low_growth   8

Jeffrey Simpson: Slow growth now, no growth later - The Globe and Mail
JEFFREY SIMPSON
Slow growth now, no growth later
SUBSCRIBERS ONLY
The Globe and Mail
Published Wednesday, Jan. 13,2016

The population is aging. Commodity prices are low. Oil and natural gas prices are hitting rock-bottom. The Canadian dollar has plummeted. Most governments are in deficit, or heading into deficit (read Ottawa). Innovation and the commercialization of research lag that of other countries. Productivity, the country’s long-term bugbear, remains sluggish....all the green traffic signals have turned to yellow or red. Yet this slow-growth economy, which might persist for a long time, is wrapped in a political culture that seems to favour slow or no growth, or seems to think that government infrastructure programs, useful in themselves, will solve the long-run problems.....Everywhere, projects are blocked or delayed, because environmentalists, aboriginal people, non-governmental organizations or even provincial governments oppose them....Many of these blocked or delayed projects with large-scale economic spinoffs are natural resource projects, which the federal government says might be saved with more “robust” oversight. The government is kidding itself in this belief, since the opponents don’t care what the regulatory process is. They oppose development pure, simple and always.

Far beyond natural resource constipation, the contradiction arises between slow growth and the huge desire of citizens for more government services, without higher taxes. Of special concern is Canada’s persistent low productivity, to which no easy answer exists, except that a slow-growth mentality doesn’t help.

...Don Drummond, working with Evan Capeluck, recently explained the challenge in a paper for the Centre for the Study of Living Standards, which looked at productivity trends in all provinces. Projecting these trends forward, they said most provinces and territories will not be able to balance revenue growth with new spending demands (especially for health care) without higher taxes or spending cuts.

Put another way, unless long-term growth can be improved – a trend that will require productivity improvements – Canada is heading for a poorer future with fewer programs and/or higher taxes.
growth  Jeffrey_Simpson  economic_downturn  anti-development  natural_resources  economic_stagnation  megaprojects  productivity  Don_Drummond  slow_growth  low_growth  weak_dollar  signals 
january 2016 by jerryking
Lawrence H. Summers: ‘There are many ways of burdening our future’ - The Globe and Mail
RUDYARD GRIFFITHS
Special to The Globe and Mail
Published Friday, Mar. 20 2015

Lawrence Summers: confidence is the cheapest form of stimulus.

If a young person asked you, ‘How do I thrive in a low-growth economy?’ what would your advice be?

It’s never been more important to be comfortable with technology, to be well-educated, to not just know things, but know how to learn, and develop a set of distinctive skills that employers can value. For people who are able to do those things, the combination of technology and global markets will make this a moment of immense opportunity........There are many ways of burdening the future. One is to borrow money – though, given how low interest rates are, those burdens aren't that great. Another is to defer maintenance. Those costs accumulate at a much greater rate, and that's why I think infrastructure investment is so very important. Another way to burden future generations is to scrimp on education. Another way is to fail to invest in basic scientific research. Another way is to saddle them with huge pension liabilities for those who are working, serving the public today. We are doing all those things.
Rudyard_Griffiths  America_in_Decline?  growth  economy  technology  automation  deferred_maintenance  downward_mobility  infrastructure  skills  advice  new_graduates  economic_stagnation  the_Great_Decoupling  low_growth  slow_growth  confidence  economic_stimulus  leaps_of_faith  Larry_Summers 
march 2015 by jerryking
Ontario’s ‘none of the above’ election - The Globe and Mail
JEFFREY SIMPSON
The Globe and Mail
Published Saturday, May. 24 2014

Start with economic growth after inflation. From 1982 to 2013, it averaged 2.6 per cent. From 2014 to 2035, it will be 2.1 per cent. Roughly speaking, therefore, growth will be about 20 per cent slower.

The labour force will grow more slowly largely because of an aging population, a change being felt throughout Canada. Labour productivity will be flat at best, and quite likely lower than from 1985 to 2000. In the meantime, global competition will intensify.

Manufacturing has been declining as a share of the economy in North America and Western Europe. Ontario’s decline was halted temporarily back when the Canadian dollar plunged to nearly 60 cents, but those days are long gone.

The province’s cost competitiveness – this is one of the two or three central challenges – has been poor. Unit labour costs have gone up by a little over 5 per cent per year over the last 13 years, compared with just over 2 per cent in the United States.

When a province’s unit labour costs rise more than twice as fast as the country where it does 78 per cent of its trade, the results are obvious: plant shutdowns, unemployment and not enough new capacity added. Automobiles are the classic case: plant openings in Mexico and the U.S., but none recently in Ontario.

Business investment in machinery and equipment has lagged the Canadian average and is far below the United States. Research and development, a pathway to innovation, also lags. It’s better than the very poor Canadian average, but far below the U.S. Take away the healthy financial sector and the Toronto’s overheated housing market, and what do you have?

In Toronto and Ottawa, where prosperity is sustained, it’s easy to forget the swaths of the province in the southwest, north and east, where very little new economic activity has been taking place. The old industrial cities – Hamilton, Windsor, St. Catharines, Thunder Bay, Sudbury, Sault Ste. Marie – and smaller cities, such as Leamington, are nearly all suffering in one form or another.

For most of the past quarter-century, Ontario provincial governments have run deficits. Slowly, the debt has risen. Such is the situation that Ontario now receives yearly small payments from the country’s equalization scheme. (And such is the absurdity of the scheme that Ontario taxpayers remain net contributors to Ottawa, which then turns around and gives a small portion of the revenues back in equalization.)

The Ontario government has reached far, but failed to execute: clean energy, gas plants, e-health, Ornge air ambulance, nuclear cost overruns. No wonder trust in government is low. For almost a decade, the Liberal government let health-care spending rip – 7-per-cent yearly increases without commensurate improvements in the system. (Spending increases are now down to 2.5 per cent a year.)

Very, very powerful – and very, very conservative – public-sector unions and associations in schools, universities, health care, policing, firefighting and municipal government make change very, very difficult.
Ontario  elections  turnout  Jeffrey_Simpson  challenges  long-term  slow_growth  low_growth  Queen’s_Park 
may 2014 by jerryking
WHOLESALE The real squeezed middle?
From dealing with ongoing margin pressure in a low growth environment, to dealing with higher customer expectations,
and mounting concerns about the black market, the challenges facing wholesalers are considerable. However, the picture is not all gloom. Opportunities still exist for operators able to supply goods in line with changing industry trends, while maintaining a low cost base. Increasingly this will be through supply chain integration and enhanced service levels. But, ultimately winners will be wholesalers that can effectively reinvent themselves by developing new
hooks into their customers.

Demand is highly influenced by end user trends. However, wholesalers only have limited ability to respond quickly.

The ability to source and alter stock in line with changing trends is vital, especially in terms of broadening of the
product range.

Wholesale is generally a high volume low margin industry with operating margins of only 1-2%.

Margins are constantly being squeezed. Bargaining power in many consumer goods markets has been weakened by
powerful manufacturers and dominant retailers.
responding to end-user trends
margin pressure

Most wholesalers now offer a range of new added value services. White label provision and web integration
increasingly common

Service level agreements increasingly tight

Symbol groups have become more popular across the grocery sector, with increased investment in own-label
development. In other sectors branding has never been more important.

The introduction of tightly-managed production techniques has resulted in greater sophistication in distribution
chains

Wholesalers are now expected to have systems in place to run goods direct from production plant to end-users

Disruption in overseas supply chains caused by ‘growing pains’ in emerging markets is becoming increasingly
common.
enhanCed serviCe levels supplY Chain integration

The black and grey markets, and fraud in general is on the increase. Alcohol duty fraud is a particular concern

Sourcing from correct brand owners is becoming more difficult. Fines for the possession of fraudulent stock are
becoming more severe.
fruits  vegetables  wholesalers  challenges  problems  margins  supply_chains  fresh_produce  OPMA  slow_growth  black_markets  low_growth  customer_expectations 
october 2013 by jerryking
Caribbean in greatest crisis since independence : Kaieteur News
November 18, 2012 | By KNews | Sir Ronald Sanders.

This is a worrying condition for the CARICOM region. For, if the public has lost faith in the willingness of governments and institutions to act swiftly and together to extract them from crisis, the consequences will be even more serious. They will include increased emigration of the skilled persons in our societies, shrinkage of investment by local business people, and a general malaise in the productive sector. In short, it will lead to a worsening of the crisis.
The sad aspect of all this is that every leader in the member-states of CARICOM, in its institutions and in the private sector know very well that deeper integration of Caribbean economies and closer harmonisation of their external relations would be an immediate stimulus to pulling CARICOM countries out of what Dr Anthony rightly describes as “this vicious vortex of persistent low growth, crippling debt, huge fiscal deficits and high unemployment”.
Caribbean  crisis  Caricom  failed_states  misgovernance  low_growth  brain_drain  unemployment  debt  sovereignty  downward_spirals 
november 2012 by jerryking
Go Ahead, Take a Risk
June 22, 2004 | WSJ | By ADRIAN SLYWOTSKY

What are the risks you should be taking but aren't? Most managers treat risk as an unwanted byproduct of the business. They think narrowly of financial, operating, and hazard risks, such as currency fluctuations, employee fraud, and earthquakes. And they defend themselves through practices like hedging, internal controls, and insurance.

But disruptive strategic risks can be a much larger source of value destruction for a firm. I looked back to the bull market of the 1990s to analyze movements of the Fortune 1000 stocks; even then, before the market collapsed, 10% of stocks lost over one-quarter of their value in a single month, primarily because of strategic-risk events.

The most successful companies do not try to simply minimize strategic risk; they embrace such risk by making prudent bets in their growth-oriented strategies. Strategic risks include not just the obvious, high-probability events that a new ad campaign or new product launch will fail, but other less-obvious risks as well: Customers' priorities will change quickly -- as when baby-boomer parents quickly migrated from station wagons to minivans, catching most automakers off guard. New technology will overtake your product -- as mobile telephony has stolen market share from fixed-line voice. A one-of-a-kind competitor will render your business model obsolete -- as the Wal-Mart tidal wave has washed over mid-range department stores.

Although insurance and hedging can't address strategic risks, there are an array of countermeasures that can, including these three:
1) Smart sequencing for new growth initiatives. Look for incumbents that are moving deliberately, leveraging existing assets and customer relationships to gain the experience, knowledge, and reputation necessary to take the next step with confidence.
2) Proprietary information to reduce the risk of each new initiative. Gather and generate proprietary information that produces a depth of insight into the customer's needs and activities that traditional suppliers cannot match. This will make you a supplier of choice, reducing bidding volatility and allow you to plan with greater certainty.
3) Double betting to minimize the risk of obsolescence. When several versions of a new technology are competing to become the standard, it's impossible to predict which will prevail. So smart managers make double bets. Betting on both Windows and OS/2 positioned Microsoft to be the winner, regardless of which operating system prevailed.

Traditional risk management seeks to contain losses. But that's just one-half of the growth equation. By embracing strategic risk, Cardinal, JCI, and other risk-savvy companies have raised their growth potential in addition to reducing their economic volatility. That's important at a time when aggregate market growth is sluggish: The biggest risk of all is not to take the right growth risks for the business.
leaps_of_faith  Adrian_J._Slywotzky  risk-taking  proprietary  sequencing  scuttlebutt  information  growth  strategic_thinking  Mercer  Oliver_Wyman  product_launches  nonpublic  low_growth  slow_growth  insights  customer_insights  value_destruction  disruption  insurance  new_products  obsolescence  countermeasures  volatility  customer_risk  one-of-a-kind  hedging  overly_cautious  risk-aversion  de-risking  double_betting  risk-management  bull_markets  customer_relationships  dark_data  risk-savvy  internal_controls  financial_risk  risks 
june 2012 by jerryking

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