Things are about to change

•September 16, 2014 • Leave a Comment

The USD is getting slowly stronger against the Euro that will ease the European economic situation. The boost will also come from the European Central Bank with low interest rates and buying of bonds etc. of member states and their banks. US exporters have to remember that weakening Euro will mean a tougher competition in the years to come in Europe – even though the Free Trade Agreement will come. Any investment to Europe must be made on long-term and not for a short-term gain. Smaller European nations are good testing grounds for products, services and solutions from abroad. Good luck to everybody!


Preparing for the boom economy

•May 2, 2011 • Leave a Comment

The national sales tax is the best single one thing for the USA at the moment. Hard hit consumers would gain a tremendous buying power, the government would get a broader and visible tax base increasing tax income, companies and consumers would pay in average the same sales tax as the VAT is in Europe and ROW.  The huge difference would be that there would be no income tax in the USA. This would be a reason enough to come and stay in the USA. But that will be not the whole story! The external value of greenback is steadily going down (due to active and massive printing of dollars) against all major currencies, what increases the competitiveness of the US companies operating globally. All income sent back to US would generate even higher profits at home. At the same time importing gets less interesting and finally the manufacturing would return to the USA! This is the vehicle for a brighter future.

I must say wow – the formula is clear!

Business Conditions Q1/2011

•January 29, 2011 • Leave a Comment

Now it is a good time to take a look at business conditions in the    world. Firstly I would like to comment the Tatum Index of Business  Conditions in the USA. It combines indicators of the past 30 days and  the next 60 days into one number. This indicator has shown an  upwards trend since September 2010 when it was at 2,1 points and in  January 2011 it reached 7,0 points. The Order Backlog and  Employment show a positive trend, but Capital Expenditure remains  flat and financing conditions turned negative due to higher interest  rates.

Secondly I’m looking at Max Weber (1864-1920): he stated that riches  come through hard work and a low level of spending (= high share of  income into savings).  In our  modern world this is still pretty much a valid statement. In the industry we talk about productivity and rational thinking. We can reach this by high education and utilization of technology. The increase in productivity is needed when developed economies are competing against less developed economies with low level of wages. This is especially important in manufacturing, then through implementation of technology the outsourcing spree into low wage countries can get stopped and turned around. The economic outlook is this year better than in 2009 and 2010, so now is the time to do necessary changes before the next downturn will hit us. Especially investing into technology must happen now. Personally I hope that US and European companies will re-evaluate their outsourcing activities and compare true landed costs and include all extra travel, support, quality, inspection, training, and hassle costs to the equation – remembering that the minimum wage in the USA is at 7,10 USD per hour.

Thirdly, I’m looking at US – China debate. The US House of Representatives is planning to pass legislation that would punish China for undervaluing its currency. I agree for more pressure but do not favor a direct confrontation. It would be interesting to compare tactics with the Chinese war tactics from Sun Tzu – they are not far off from the tactics from American Indians: you must hide yourself and wait for the right moment to hit your enemy! The Chinese have handled according to this principle since Zhou Enlai – they have not revealed their intentions and have learned all they can from their “enemy” – the west. The Chinese economy will keep on growing and the western world should work together in order to bring a counterweight for the future. The USA gains the most when deepening co-operation with Canada and Mexico, and Brazil (all together having a GDP of around $ 18 k billion). It also should be considered to re-establish deeper tights between the USA and the EU that has 500 million inhabitants and a GDP of almost $ 18 k billion. This year will be very interesting in this respect, because China has started to reveal its intentions that are not particularly friendly in all aspects from the Japanese, US and European point of view. As a parade sample we can use the incident of Japan capturing a Chinese captain but facing a threat of blocking exports of rare earths used by Japanese electronics industry by China.  The South China Sea will become a hot spot. China has warned off western companies to do (oil) business with Vietnam in waters that China also claims. China doest like to see US navy or American influence in that region. So, the business conditions might get tension from the political side, too – if not during 2011 but in the near term anyhow.

Executive Search Tactics revealed

•January 13, 2011 • Leave a Comment

The Academy of Management Perspectives has published in November 2010 in volume 24 number 4 an article on a study made by Monika Hamori about “Who Gets Headhunted – and Who Gets Ahead”.  She interviewed 2000 executives in over 800 multinational companies. The main outcome is that “THE EXECUTIVE SEARCH FIRM TARGETS LARGE, REPUTABLE, HIGH-PERFORMING COMPANIES TO RECRUIT FROM, AND IDENTIFIES INDIVIDUAL  TARGET EXECUTIVES ON THE BASIS OF THEIR JOB TITLE rather than their accomplishments.” She furthermore notes that 50% of  US managers stay six years with an employer, and about 2/3 of open positions are filled by outsiders.

This gives a lot to think about for executives planning their career, but also for hiring managers, and especially for the executive search firms.  There are talented people with accomplishments in SME to be hired, but they should consider to get into larger companies in order to make their career. So, actually executive search firms should  reconsider their tactics and hit two flies at once.

Chamber and Business Association activity

•November 27, 2010 • Leave a Comment

I have been nominated and elected to represent Rubber industry in Confederation of Finnish Industries EK, furthermore I got elected to be one of the delegates in Tampere Chamber of Commerce. This year I was also elected to the board of German Chamber of Commerce in Finland. I’m also a board member in China and Canada Business Associations. This is international business!

Think global and act local

•October 7, 2010 • Comments Off on Think global and act local

It’s time to accept that the world is a global village. However the village is pretty large. It makes sense to focus on strengths we have around us where we are and make us competitive through them. Certain businesses are like fortresses you cannot move away from a specific location: mining, fishing and water energy production (rivers, lakes, and seas), salt fields, forests related industries (unless you destroy the forests), farmland (most of the suitable land is in that use already), tourism and retirement as well as solar energy related services and industries  in most sunny regions, oil and gas industry, tourism related to cultural sites etc. It makes sense to list similar bases for your area and  businesses, and build on them.

Time is ripe for the upturn

•March 11, 2010 • Comments Off on Time is ripe for the upturn

Let’s work harder and celebrate small successes – a creek of  small successes leads to a larger river.