My Notebook

My notebook is where I keep random notes, experiments and bits of research. Some of these become full posts in time, others stay here for prosperity.

1

OECD forecasting 15% drop in global GDP

OECD forecasting 15% drop in global GDP

The OECD’s economic forecasts are a bit shocking to say the least. The TL;DR version is France, Italy and the UK see 11%+ falls in GDP if there’s a single lockdown. Add another 4% if a second lockdown happens. Although parts of the press has jumped on the UK’s table leading 11.5% fall, there’s not much in it.

To be honest, whether the result is an 11.5% or 15% drop in GDP is of little comfort. Since the start of June over 17,000 job losses have been announced in the UK – a mix of restructuring and business failures. More will come as the furlough scheme ends, lockdown eases and we venture outside (or – more likely – not).

Then there’s investment. Lower revenues and profits means less to invest in much-needed productivity gains, new technology and so on. This will drag on the recovery. My models suggest 4-5 years before we’re back to where we are now.

My concern is we’ll see “where we are now” as the goal. There’s some interesting lessons we’ve gained from lockdown about work/life balance, environmental impacts and how society functions. It would be a shame to lose them. 

Maybe rather than “where we are now”, we should aim for “somewhere better”.

2

Japan eager to lure manufacturing home

Eager to boost the home economy, Japanese Prime Minister ABE Shinzo has set aside some ¥200 billion to help companies onshore manufacturing. The move should help shore up the finances post-pandemic, as well as play to a narrative of reducing dependence on China.

There’s been little interest, which isn’t surprising. Manufacturing is a complex beast, with “making stuff” sat in a web of supply chains, logistics, contracts and more. Moving a production line can take months and years to plan and implement. Money is tight, and even with promises of support, the funds to make it happen aren’t there. It also means moving away from a market eager to buy. 

Longer term more manufacturing could move back to Japan. The call of the homeland can be a strong one, and with a growing network of trade agreements, an attractive one too. This desire will have to be offset against a shrinking workforce, higher corporate taxes and difficulty achieving sustainability goals. Then there’s the draw of Vietnam, Thailand and Indonesia, all eager to lure former Chinese production lines with promises of tax breaks, investment and support.

The months ahead will be interesting ones to watch.

3

Modelling the UK battery electric vehicle market

Modelling the UK battery electric vehicle market

My 2020 paper on Nissan’s woes included an analysis of the “Battery Electric Vehicles” available in the UK. The analysis appeared as a single image showing how different vehicles were positioned relative to one another. As this is something I’m asked to do from time to time, I’m sharing a quick overview of how I went about it.

First I went through the website of every major car company with a UK presence, identifying their EV options and quickly reading through what was available. My focus was on vehicles that could be ordered or pre-ordered, not future concepts or proposed models that had yet to have pricing information. This caught over 30 different models, from electrified versions of mainstream cars (such as the MINI and Up!) to purpose built vehicles such as Tesla and the ubiquitous Nissan LEAF. At this stage my aim was to get a sense of what was on offer rather than pull out specific data.

Next came research into what consumers wanted from their battery electric vehicles. This gave me an idea as to what mattered more or less in purchasing decisions. Price, range, recharge times and driver aids came out as recurring themes. I decided to model this as a Price vs Utility. Price was the mean between base and top-specification model prices, utility was a weighting between range, recharge and standard options such as cruise control, speed limiter and vehicle autonomy. There was a heavier weighting towards range.

Having created a Microsoft Form to capture data, I returned to the manufacturer sites and started collating information. This was the legwork of the research and took place over two days.

Once completed, the data was fed into a spreadsheet model that created the X and Y co-ordinates for the final chart. This was created using Affinity Designer.

Naming each vehicle made the chart messy. I decided to high-light specific models that had a stronger profile or reputation. Given my aim was to present a comparison of Nissan LEAF against its competitors, it was given “star billing” with a more distinctive icon. I also decided against an idea to cast each marker a different size to denote range or charging times. Again, this made the chart confusing.

The most bizarre part of this research was the position of Nissan LEAF: it ended up almost dead centre in the chart. This wasn’t intentional, and I rechecked data before accepting it was just what happened.

More BEVs are due to come to market later in 2020 and early 2021. I may repeat the exercise and add it to my ongoing monitoring of who owns what British car manufacturer.

4

EU / Viet Nam trade deal ratified

EU / Viet Nam trade deal ratified

An FTA between Vietnam and the EU comes into force in July after it passed its last ratification hurdle. 80%+ of imports will come into the bloc tariff free, with more to come over the next few years. 

Vietnam has been sucking up investment. As well as benefiting from the US-Sino trade war, it’s been creating a business-friendly environment that’s encouraging firms to locate there. Latest appears to be Mitsubishi, which is considering at which port it should locate its next factory rather than which country.

5

Osaka launches preemptive track-and-trace for venues

Venues in Osaka, Japan, are being encouraged to post a QR code at the entrance. Patrons scan the code on the way in to show they’ve been there.

If someone tests positive emails are sent out to people who were there with advice on what steps to take next.

On the surface it looks like a neat way of solving the contact tracing problem without burning phone batteries. I’ve no doubt there are going to be privacy concerns, but as a starting point that’s pretty easy to use (photograph QR, job done) it looks like a good one.

6

Will we all be working from home? TL;DR: no!

Will we all be working from home? TL;DR: no!

If the Twitterverse is to be believed, we will all be working from home once the Coronavirus Pandemic settles down. It is true a lot of us have worked from home, and more companies are looking at it as an option.

Sadly, “we” depends on how you look at the data.

(Disclaimer: this is based on UK data from the Office for National Statistics).

My estimate is 20-25 percent of the UK workforce could work from home. That is, they’re in a role that has the potential to be home based assuming no other factors influence it. For example, people working in banking could work from home (hold that objection you’ve thought of).

Once you start making assumptions about the type of work that number starts to fall dramatically. Back to banks – a large part of the banking workforce are in branches where face-to-face contact with customers is needed.

In all, I think around 5-7% of the UK workforce are in jobs that could sustainably be home based.

What do I mean by sustainably? If you need to physically interact with other people regularly or use machinery then you might not be able to work from home.

This stacks up with my past experience where “work from home” initiatives have been disruptive in some companies. You might want to read my article on remote working for deeper insights.

7

The Kübler-Ross Model

The Kübler-Ross Model

When I studied organisational design and change management, I was introduced to the Kübler-Ross Grief Cycle. It describes “5 stages of grief” that are supposed to occur when someone experiences an intense shock such as death, restructuring or redundancy. The person will enter a stage of denial, become angry, reach a low point of depression and then begin to recover by bargaining before finally accepting their new normal. If the depression isn’t dealt with, they’ll enter a crisis and may never recover.

This model is fraught with difficulties. It lacks empirical evidence to support it and is, frankly, more pop-psychology than serious science. That said, for managers who are struggling to cope with the daily rigours of business and lack a formal training in psychology it is a useful shorthand. As one of my instructors pointed out: you’re a manager, not a therapist.

Like any model approach it with caution. It’s there to help guide and structure rather than follow religiously (looking at you, Myers-Briggs fans). 

8

Jeremy – a black and white movie star is born

Jeremy – a black and white movie star is born

Lockdown has been a bit weird. I’ve taken to arranging odd photoshoots with random toys and objects. Then there’s my insistence on taking at least one photo a day and sharing it on Twitter as if anyone notices.

Jeremy is different though. This teddy bear is mine and I’ve known him all my life. He’s been with me through thick and thin. So when I needed a bit of inspiration for a Sunday morning creative project, I turned to him.

The result was described by one of my kids as “like Vincent Price”. I’ll take that as a compliment.

9

Statutory Sick Pay vs the minimum wage

Statutory Sick Pay vs the minimum wage

The Coronavirus outbreak in the UK has prompted changes to the way sick pay works. Instead of waiting 3 days before it can be claimed, employees can claim it immediately.

However.

A person on minimum wage working a 40 hour week will see a loss of more than £230 each week. Those earning more will see even greater falls.

It will leave sick and infected people with a difficult decision to make: stay at home for the greater good, or put food on the table and pay rent.

I suspect the latter will win.

10

Rotoscoped yoga

Rotoscoped yoga

I’ve been experimenting with rotoscoping again. This is my latest effort, using a very old and near forgotten image from many years ago.

Rather than going for a pure form of rotoscoping, I’m trying to learn how to be more abstract. Let’s hope I get better over the coming months.

11

Kid on a mobile phone

Kid on a mobile phone

Been reading a book on mid-20th Century Graphic design lately. I like looking back in time, then letting it inspire me to create something new.

This was inspired by some work by Manfred Reiss.

12

The UK’s “Economically Inactive” 8.5 million people

The UK’s “Economically Inactive” 8.5 million people

As the UK launched its new immigration system, Home Secretary Priti Patel came under fire for implying the 8.5 million “economically inactive” Britons could be tapped into by British businesses. The implication was this cohort – approximately 20 percent of the UK’s working age population – could be used to fill the expected shortfall in low-skilled workers.

The Office for National Statistics confirms there were approximately 8.5 million “economically inactive” people in the UK between October and December 2019. However, the term has a specific definition that undermines the Home Secretary’s assertion these people would be ready and willing to fill vacancies caused by the new immigration system.

To be economically inactive, a person has to be:

Aged 16-64 and they have not been actively seeking work within the last four weeks and/or they are unable to start work within the next two weeks.

Headline categories in ONS data include those who are long-term sick, students, looking after a family and the retired. How many of these people would be ready and willing to accept low paid or low skilled work post 2020 is not recorded. Implying there is a potential 8 million strong workforce waiting to step in to jobs is disingenuous at best.

About Ross A Hall

A business researcher and writer, I help companies find new markets, form strategies and build successful businesses.

Find out more about my work.