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What will 2017 bring to our economy?
After a somewhat “depressing” 2016, the beginning of 2017 has started of quite eventful as well. With Trump’s inauguration, the ongoing crisis in the Middle East and the continuing Brexit discussion, the prospects for 2017 are quite uncertain. We will try to put forward a few predictions concerning the economic and financial world that we expect might happen in the coming year.
Considering all the (unfortunate) surprises that have already happened in the first month of this year, it is quite difficult for experts to rightfully predict anything concrete. However, looking at data and historical events there are a lot of professionals who have done a courageous attempt. We have summarized a few notable insights in the future of our economy.
The American investment bank Morgan Stanley for example has predicted something quite unexpected. They stated that Trump’s policies will cause for import growth to increase and export growth to decrease, which is the complete opposite of what Trump has claimed that he wants in his campaign.
In this statement they have assumed that Trump’s threats are largely overdone and that he probably will not raise tariffs. Their theory is based on the fact that the pace of American spending and investment will almost certainly fasten, which will lead to more imports. They also predict a rise in the trade-weighted dollar that will decrease exports. These two together will cause for a different balance in import-export than Trump would like to see happen.
On the other side of the pond, in Europe, multiple political challenges will cause for possible lower consumer confidence and less economic growth in the next year. With elections in the Netherlands, Germany and France and the uncertain consequences of the Brexit, the economy could be facing great problems in Europe due to instability in a few of the biggest powers of the continent.
For now, the consequences of Brexit are quite minimal. However, whether or not this remains this way depends on how the negotiations between the United Kingdom and the European Union will go, mostly concerning Article 50, the article that sets out how an union may leave the European Union. In the worst case scenario, the UK will not be able to come to any compromises with the EU, which will shield off the British market for the remainders in the EU.
The following video will shortly explain the possible consequences that Brexit will bring to the British population and other Europeans.
The chairman of the KPMG, one of the world’s biggest accounting firms, has warned that there is a threat to the stability in Europe bigger than the Brexit: the rise of populism. With multiple elections in the biggest nations in Europe there will be a lot of political instability in the following months, that could lead to protests across the continent.
With the polls suggesting that the PVV will win most seats in the parliamentary elections and the far-right party gaining more support in Germany. People are not content with the way it is, and automatically tend towards populist leaders. Marine Le Pen of France’s National Front Party even named 2017 “the year of the Continental peoples rising up”.
With many Europeans taking it to the street to show support for the Americans in their “struggle” with their new president, the growing uncertainties and discontent may lead to more protests and chaos in Europe, which may greatly harm the economic continuity of the continent.
The World Bank has predicted a global economic growth of 2.7%, which is 0,4% higher than it was last year. The Bank says this small growth is mainly caused by improvements in emerging markets and in developing economies.
On the one side, the dollar is strengthening and interest rates in the US are rising, leading to a tightening of the financial conditions for developing countries and emerging markets. However, on the other side the prices for oil and metals, which are export products in most developing countries, have been seen to be higher than last year.
Between January and September of last year the commodity prices grew more than 40% and this trend is predicted to remain steady in 2017. With the US wanting to invest more in infrastructure worked as a stimulant to the commodity markets.
To conclude our predictions, you could say that 2017 will be a year full of political instability which may in its place cause for economic uncertainty as well. Politics, and more importantly who makes the decisions in a country, will play a big role in the fluctuations in customer confidence and where nations spend their money on.
We are excited to see what 2017 has to bring to the economy, and you?
2008 was a remarkable year in the history of the United States. In that year, the first African-American was elected as President of the United States, mister Barack Obama. He beat senator John McCain from Arizona, in a convincing manner. After a presidency of four…
With Christmas only a few days away it seems as if everyone has taken upon themselves to visit the local shops again. With the economy crawling out of its crisis, it seems like holiday spending is as huge as it has ever been. Due to better consumer confidence and a purchasing power boost, expenses are expected to grow twice as much as in 2015 with approximately 0,6%, as expected by the ING bank at the end of 2015.
Christmas is a time of traditions. Where once the religious rites where what the Holidays were all about, nowadays these traditions have shifted towards mall madness and shopping stress towards the end of December. The tradition of gift giving is even older than the celebration of Christmas itself, and this phenomenon has become more extravagant each year.
New traditions finding its way in the Netherlands are Black Friday and Cyber Monday. These days, both in the weekend after Thanksgiving, are known for their high discounts. On Black Friday people go to the stores, and on Cyber Monday these discounts are for online shoppers. While these days are already major shopping phenomena in the United States, they have recently also been implemented in the Netherlands, where multiple stores advertised with huge sales on their websites and in stores, attracting many customers.
In for instance the United States, Black Friday is one of the busiest shopping days of the year. Retailers tend to reward early customers with special discounts and presents, leading to people camping out in front of the stores to get the best deals in the middle of the night. In the Netherlands this type of craziness has not been spotted yet, but the average Dutch consumer does like a good deal!
With these traditions spreading around the world and being implemented outside of the U.S. as well, this has affected the pre-Christmas shopping rituals of consumers. What has appeared to have become more important over the years is gift planning. The ongoing trend is to start your planning early, so you are able to buy your favorite pieces for the best prices, for instance on Black Friday.
An important role in the planning process is played by the Internet. With consumers being able to check the current prices for the product of their choice at multiple suppliers, they are more aware of the price fluctuations and will strike when there is a special discount or when they can get the best value for their money.
An example of the Christmas extravaganza can be seen when looking at the differences of the supply of advent calendars. Where for the last decade, these were still filled with chocolates, nowadays they are filled with toys, perfume and even muesli! You cannot think of anything anymore that has not been put inside one of these calendars.
This concept has also flown here from the United States and Great-Britain, where the tradition of receiving a little present every day of December, leading up to Christmas, has been going on for some longer time. In these countries there is a vast supply of advent calendars, with prices ranging up to 150 pounds for an advent calendar filled with different sorts of whisky’s, or 200 pounds for a different perfume sample every day.
Holiday shopping has always been a booming time in the retail sector, but lately there has been a major shift in where people go to buy their goods. With even groceries being bought online, it is no wonder that the physical stores cannot compete with online shopping much longer. With major bankruptcy cases, such as the department store V&D and the Macintosh-chain in December of last year, it is clear that it has become difficult for major brands and chains to keep their retail stores profitable.
This shift towards online shopping can also be seen during Christmas time. The hardest part about Christmas is probably finding the perfect gift for your friends and family. However, nowadays you can even get the help from an app to find a gift for you! The application Feli can be seen as the Tinder of gift-shopping. You simply describe the person you’re buying for in the app, and you can start swiping left and right to end up with the perfectly fitting gift. The app will redirect you to the site where you can buy it, and you are done! Easy right?
This app is another example of how the entire society is involved in the Christmas spirit. You cannot walk through your local shopping street without seeing a Christmas tree, glittery ornament or a string of Christmas lights. You can get gift recommendations and pre-sorted gift sets at many stores, which almost makes you do not even have to think about getting presents anymore. While some find this extremely helpful, it also takes away the magic of gift giving for a lot of people.
With the CBS expecting a positive economic climate in the fourth quarter of 2016, the forecasts are looking good again. 2016 has been a year of a lot of growth in the retail sector, and also shops in the food sector have seen increases of 2,4% in revenues than the same time last year. Web shops also show an ongoing trend of growing revenues over the last two years, with no sight of this slowing down in the near future.
In the United States, Adobe has predicted that online sales may grow up to 11 percent during the holiday season, reaching over 90 billion dollars. They have predicted that online shopping will start earlier and last longer, which shows the trend of planning becoming more important. The “new” traditions, Black Friday and Cyber Monday, have also broken all the records this year, with Cyber Monday even increasing 12.1 percent since last year!
What do you think about phenomena such as Black Friday and Cyber Monday, should they be implemented in the Netherlands as well? And do you find yourself shopping more online than in physical stores?
Happy holidays from Go-Business! And feel free to leave your thoughts on this subject in the comments!
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Changes in personal transportation
We are living in a world which is becoming richer and richer. During the past decades, we got spoiled. A few examples: healthcare became affordable for lots of people and nowadays most teens will have the ability, and the money, to travel outside of their country on their own. The prosperity we have achieved however, might have some consequences, maybe even in the near future. Flying by airplanes became less expensive, ordering packages became less expensive and buying a car and driving it became less expensive. The lower the costs of these transportation expenses, in combination with our increasing prosperity, the more we tend to make use of them, which is an issue.
Lots of people will immediately think about the environment and the atmosphere when one starts to talk about the issue of using transportation as much as we as society do. While both the environment and the atmosphere are quite important to most of us, there is a much ‘easier to understand’ issue; we will run out of oil. This will happen in around 30 to 40 years’ time if we keep using it like we are using it today, and no other sources are found.
What are we going to do about it?
Whilst a lot of people are simply not aware of this relatively short time-span, some are. These individuals try to change their own oil consumption, but sometimes also the consumption of others. There is also quite a bunch of these people who have an influence on others, think about people in your government, inventors and initiators. The government tries to get you to change, by setting an example, creating new rules, regulations and legislation. The intention of these actions is to inspire you, but also to set some limits. In this article, we will be talking about the effect of these rules on the automotive industry.
Legislation in the automotive industry
For every country there are different rules about car sales and its prices. Because we as a blog are based in the Netherlands, we will take this country as example.
Every automotive manufacturer has to do some tests in order to put their product on the market, think about crash testing, durability testing, test-driving, rain testing, but also the testing of fuel consumption. Some of these tests are mostly done because the manufacturers want to sell a proper finished product to the customer, and the customer wants the car to be safe, durable, waterproof, and most of the times also fuel-efficient.
Fuel-efficiency however, is measured most of the time by a NEDC (New European Driving Cycle) test. This test includes city-driving as well as highway-driving over a period of about 20 minutes. It might seem quite trustworthy written like this, but you couldn’t be more wrong. Most of these tests are conducted in a laboratory by the manufacturers themselves.. The vehicles being tested are not exactly like the ones you will buy from a dealership. For example, here is a list of some of the ‘modifications’ they will make to the car:
- Get rid of the air condition,
- Get rid of the radio,
- Get rid of the mirrors,
- Making the car more aerodynamic by taping the tiny gaps between the bodywork,
- Filling up the tyres with far more air than recommended for daily use in order to create lower amounts of friction between the tire and the surface.
These are just some of the adjustments manufacturers might do in order to get a lower fuel consumption. There are in fact two main reasons why manufacturers test fuel usage in this way. The first reason is that it is simply allowed, which also refers to the second reason; everybody does it. If all of the manufacturers test it this way, a company is simply obliged to do the same, because a car-buyer has no clue about this way of testing. If the buyer sees that one car, with the same price as another one, will use 2 litres more for every 100 kilometres, he will buy the most ‘efficient’ one. The third reason is the government, its knowledge and its legislation. The standards which are set by the government, are simply too high to be achieved by testing fuel economy in a more normal environment. In the Netherlands, for example, companies with cars which have low levels of carbon dioxide emissions will have to pay less taxes. These low levels of emissions can in most cases only be obtained by testing their cars in an environment which we just discussed, in a laboratory.
Change in the automotive industry
Besides the debatable emissions and their regulations there are of course also other ways of ‘fixing’ the oil shortage! Most of you will probably have noticed it by now; there are more and more fully electric cars on the road.
Because of government regulations, buying an electric car might sometimes be a very good idea. In the Netherlands, you won’t have to pay as much (company) taxes and in Norway the amount of advantages is quite astonishing:
- No purchase/import taxes,
- Exemption from 25% VAT on purchase and leasing,
- Free municipal parking, access to bus lanes and free access to toll roads and ferries.
For Norway, this results in a 22% market share for electric vehicles in 2015. Norway’s current target is to have completely banned petrol powered cars by 2025. Regulations and goals like these have a huge influence on the sales of cars.
More and more companies are trying, and sometimes succeeding, in making a successful, fully electric vehicle. Tesla succeeded, and other big brands are now trying it as well. At every auto show, lots of fully electric concepts are shown from manufacturers such as Porsche, Volkswagen, Audi, Mercedes-Benz, Hyundai and so on.
Some of the reasons why not all of the electric vehicles which are currently for sale are successful are:
- Battery packs are expensive, which makes the entire car sometimes much more expensive than a similar petrol-fuelled car,
- Batteries do not have the expected range for long distances yet; some cars will run out of energy after just 100 kilometres,
- Range anxiety, what happens when you run out of energy? You are not yet able to charge your car everywhere you go,
- Uncertainty about reliability and servicing, most electric vehicles need new battery packs before the 100,000 kilometres mark.
Sadly, as the effect of this, the global market share of electric cars is still far below 1%. This is mainly caused by less prosperous countries in for example South-America. In these regions they will just buy the most durable, cheapest car. The expectations however, suggest that a fully electric car, which is just as capable as a car with an internal combustion engine, will have the same price around 2022.
(BEV = entirely electric vehicle, PHEV = entirely electric vehicle with an engine as back-up, ICE = internal combustion engine, HEV = hybrid electric vehicle)
As can be seen in the graph, even though the sales of electric cars will take off after 2022, it will take quite a long while before it has a significant worldwide market share. Bloomberg however, assumed that the annual growth would be around 30%, but if we take a look at the current annual growth, it is about 60% a year. The expectations are that most of the EV’s sales will be sold in Northern-America, Europe and China, hence why the bigger part of the premium companies is slowly but steady trying to make an electric vehicle.
Change in the oil industry
Oil is not just used for making gasoline, it is also being used for other purposes such as jet fuel and lubricants. The bigger part however, about 50%, is used to make gasoline which is mainly used for transportation. This means that the rise of electric cars will have some influence on the sales of gasoline/oil.
In the graph, you can see what will happen if the sales of electric vehicles keep rising with aggressive, 60% rate in the upcoming years. However, a 30% growth rate on average is a better estimation. With this growth rate, another oil crisis, similar to the one in 2014, will most likely be triggered around 2028.
With a slight decrease in demand for oil in the upcoming years, and the fact that we will eventually run out of oil, big fossil fuel companies will have to start looking at new kinds of energy. Some major companies in this energy business have already started with some new initiatives, for example placing wind turbines and solar panels. These companies expect that by 2060, up to 40% of the global energy usage could be green.
Are you surprised by the facts you read in this article? Also, would you be willing to trade in your gasoline-fuelled car for an electric subsidiary? Let us know in the comments!
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Since the prehistory, there has always been a difference between men and women. The men were going for a hunt, while the women were caring for the kids and preparing a meal. But in the last decades, there has been a huge change in the working mentality of women. More often women are going to work to earn money for their family. Because of that, there is a big shift in the job industry. We can ask ourselves questions to see if this is honest and equal. How is the division between men and women in the job industry in the Netherlands? And are the men and women in the job industry being treated equally? We will find out in this article.
The amount of women who have a job right now has risen over the last years sharply every year, but for the first time in years it seems that there is a decrease instead of an increase. The recent “Global Gender Gap Report” has showed us that in the Netherlands there is more inequality if you look at the participation. At the moment 85% of the labor forced men is working, and only 74% of the women. Also women often have part time jobs. This is in comparison with the last years much more unevenly divided.
If we take a look at the top of companies, we ascertain that the difference between men and women is even bigger. In the Netherlands, we can divide 212 top functions to men and women, but we see that only 15 of those functions are for women. One of the biggest causes is that women are often working part time. So they can care for the kids or do something else in the housekeeping. Top functions require high educational skills and full time managers. Since women are working more part time is it logical that the most top managers are a man.
Differences in wage are also astonishing. Even if they have the same function in a company, the difference in wage can reach up to 32%. Where a 40-year-old man in the business world is earning about 25 euro’s an hour, that amount lies much lower for women. Women make an average of 20 euro’s per hour. That is 20% less than what a man in the same position would earn. Where this difference comes from is to the present day still not yet known.
Also, the amount of unpaid work plays a role in the inequality between men and women. Because women are keeping the household running, they make about 2 times more unpaid hours a day than men. The proportion of work women are getting paid for is only 45%. Where men get paid for 73% of their pursuits.
Summarizing this text will make us think that there still is a lot of inequality in the job industry in the Netherlands. The difference in wage for the same work shocks me the most. I think it is a right that for the same work you should get the same amount of money, and not depending on your gender. Let me know in the comments what your thoughts are about this subject. I would like to read what you are thinking about it!
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An international career, to most starters of the new generation it sounds like the dream job. However, in practice there are many obstacles holding us back from truly making the big leap. Apart from quite some insecurity, also not everyone is made for the “explore the world in a formal way” life style. This article introduces you to someone who did manage to organize a job in New York.
Tim Pardoel is working for KPMG, an auditing, taxing and advisory company seated in Amstelveen, the Netherlands. KPMG is known as one of the big four, along with companies Deloitte, EY and PwC, serving a worldwide market. During a Career Event organized by the Asset study association at our university we were given the chance to Skype with Tim, live from New York. And of course, he didn’t mind talking about his amazing experiences in the Netherlands, the USA and Australia. A lot of questions were related to the differences in culture, and to what extent the different mindset of your colleges can affect the work delivered.
Tim graduated from Tilburg University with a Master in Accounting and directly started working at KPMG. Showing a lot of passion for the world across the borders, he quickly got the international clients and therefore contact with his foreign colleagues. Not very unexpectedly Tim started in an international project known as “rotation” in KPMG. This included working for 4 months in the Australian city Perth, to experience the international life in one of the 150 countries that KPMG serves. Of course, this system also works vice-versa, the headquarters in the Netherlands receive a lot of employees coming from the Americas, Australia and South-Africa.
Living in the second-most isolated city in the world Perth, with Auckland on number 1, Tim could work in the city’s specific specialization and live the Australian life. This region is known for it’s mine industries, and that was mostly what business in all disciplines was focused around. After the experience in Australia, he was relocated to New York and switched functions at the same time. The biggest barrier from moving to the USA normally would be getting a visa, but big companies will help you arrange one.
The important tips and tricks we learned from Tim? Work hard. Not in the quantity way, but deliver quality. Show a great deal of enthusiasm, involvement and perseverance. Of course you think going abroad will give you the extra touch to life, but your employer must feel the same way. A sponsor within the company is very important, think a mentor, coach or project manager. If the company has your back when you are abroad, your colleagues will be the most helpful integration workers.
Do you want to go abroad? Are you willing to bring up all the effort to prove it? Then start building your network now and make sure you have the connections you’ll want to rely on as soon as the time comes. And remember to answer the two most important questions: what’s in it for me and what’s in it for the organization?