“Never use a long word when a diminutive one will do.” ~ George Orwell (slight mis-quote)
[Diminutive is a synonym for “small”.]
“Never use a long word when a diminutive one will do.” ~ George Orwell (slight mis-quote)
[Diminutive is a synonym for “small”.]
A consultant who enjoys a successful career progression within the consulting industry will be promoted up through the ranks and hold various different roles along the way. Job titles will vary by firm.
An entry level consultant may be called a business analyst or junior associate.
New recruits who hold an advanced degree (e.g. MBA, PhD, JD/LLB or MD) may start as an associate, senior associate or senior consultant. Many top consulting firms require analysts to pursue an MBA before being promoted to associate.
Consultants who perform well at associate level are likely to be promoted to manager, and will be responsible for managing projects and the day to day client relationship.
Managers who perform will be promoted to senior manager and then ultimately to partner level. Partners are responsible for building the business, forming new client relationships, and developing the firm’s brand and intellectual property.
[For more information on the management consulting industry, please download “The HUB’s Guide to Management Consulting“.]
If I were a betting man, at this stage my money would be on Trump to win the American presidential election.
This is not an endorsement, or a show of support of any kind. I think a Trump victory would be a horrible outcome.
So, why do I think Trump has more than a 50/50 chance? And what might the implications be if he wins?
The world is currently experiencing turbulent times economically and politically.
On the economic front, things look a little grim. Government debt as a percentage of GDP in America, Japan and at least nine other countries currently exceeds 100%, and other countries like the UK, Ireland, Spain, Canada and the EU are not far behind. Add to this the unprecedented levels of disruption to the workforce that will result when driverless technology automates millions of trucking jobs and technology like Kiva automates the work of millions of factory workers. High global debt levels combined with systemically higher unemployment levels are not two things that scream “economic stability and smooth sailing ahead”.
Politically, there appear to be more than a few explosives in the tinderbox. The UK held a referendum, the result of which will almost certainly see it leave the EU (and who knows which countries might follow). The recent attack in Nice on Bastille day led to 84 deaths when an Islamic militant drove a truck through a crowd gathered to watch some fireworks (and this is just one in a series of attacks in France and Belgium in recent months). And militants in Turkey are now trying to stage a coup.
May we live in interesting times.
Trump has already surprised the analytical and political community in America by gaining enough delegates to win the Republican nomination. He is yet to be officially nominated but tensions are mounting. Politico reports that “nearly half of GOP insiders in key battleground states … believe there’s a good chance violence will break out around next week’s Republican National Convention in Cleveland.”
In a short blog post that I published in June last year I mentioned that Donald Trump “… has announced his intention to run for the White House in 2016 … Trump is a master at manipulating media attention and getting people to talk about him …”
At that stage I thought of him merely as a reality TV star, someone who was entertaining, a famous self-promoter. The prospect of him running for President seemed like it would make for good television. Little did I consider or realise the hateful ideas he would put forth in order to whip his faithful followers into a frenzy.
As I said last June, Trump is a master of building the Trump brand. He has authored multiple books, and put his name on everything from high-rise buildings to golf courses and casinos. His years of effort in building a branding juggernaut appear to have created a seemingly unstoppable force. This view was acknowledged (and more comprehensively discussed) by Politico back in October last year.
The problem for Hillary (and the Republican candidates who Trump has already defeated) is that while she might be a strong candidate, Trump is a candidate backed by the power of a global brand that conjures an alluring tale of “unstoppable and never-ending success”. His followers are not merely supporting Trump’s candidacy, they are supporting his story. They are supporting the brand.
This might sound like a subtle distinction, but it’s not.
Let me give an example.
I recently attended a talk in Beijing entitled “Advising the Next U.S. President on China” given by Elizabeth Economy, Director for Asia Studies at the Council on Foreign Relations in New York. Ms Economy gave a wonderful speech and her view, along with the consensus in the room, was that a Trump victory would be truly unthinkable. However, despite her intellectual knowledge and conviction that Trump would be an absolute abomination, she couldn’t help smiling every time she mentioned Trump’s name.
This is extremely telling.
Trump is a man who is hurling hurtful and disgusting abuse at Mexicans, Muslims, judges, and anyone who would oppose him. And yet, when a well-meaning intellectual who opposes Trump’s candidacy mentioned his name in front of a packed audience, she smiled broadly every time.
This is not Ms Economy’s fault, but what it tells us is that the power of the Trump brand has infected even his staunchest opponents.
Intellectually she knows he is bad news, but even still she can’t resist.
And if thoughtful intellectual types are having trouble resisting Trump’s brand, what hope has everybody else?
If Trump does win, then what might the implications be for America?
Well, as I mentioned, we are living in turbulent times.
France has been in a state of emergency since the terrorist attacks in Paris last November, and plans to extend the state of emergency following the Bastille day attacks. What this means is that normal rules of law do not currently apply.
I am by no means an expert on the American political and legal system, however it is possible to imagine a similar state of emergency being called by Trump (following another inevitable terrorist attack). Conveniently, Trump might decide never to re-institute the normal rules of law and subsequently appoint himself as Emperor.
One of my colleagues here in Beijing is a Texan, and he explained to me that such a wild idea could never happen in reality because Congress would never allow it.
But, if the Bush family and Republican Party are collectively unable to prevent Trump from becoming the Republican nominee, then I really don’t think that Congress will be able to stand in Trump’s way.
[Please let me know your thoughts on this issue. Do you agree with me? Or are you strongly opposed?]
China comes up for criticism in modern times for stealing software technology from the West.
Software is a language (or a set of languages) which can be used to make computer hardware do marvelous things, and because software is easy to copy (or reverse engineer), it’s easy to steal.
But if there is software stealing going on in China and elsewhere, should we really be concerned about it?
Software development is currently a fertile ground for creative minds to explore because the leverage provided by billions of computers and smartphones networked over the Internet means that a single piece of software can be used to solve problems and delight millions of people. And the additional cost of reaching one extra person is basically zero.
This presents a wonderful opportunity for creative minds to make a big impact.
And when it comes to stealing software, the reality is that creative types have been stealing from each other since the dawn of time.
In ancient times, travelling minstrels would borrow each others words, using the principle that “he writeth best who stealeth best all things both great and small, for the great mind that used them first from nature stole them all.”
In more modern times, Steve Jobs adopted the philosophy of a travelling minstrel, and is well known for stealing many of his best ideas including the idea for the computer mouse which he discovered at Xerox park.
Legal protections for intellectual property like patents and copyright remain important. But not for the reasons that most people will tell you.
The common line in the media is that patents and copyright are important because they protect the innovator’s profits, and therefore protect the innovator’s incentive to invent new technology and continue innovating.
This may be part of the story, and it is certainly true that many people are interested in profit. However, the biggest innovators in history have been the people who have pushed the boundaries because they were interested in the work. People like Galileo Galilei, Leonardo Da Vinci and Steve Jobs. They were not driven by profits but by a passion for the work.
And so, if the most creative people are driven by passion, and will do the work whether they get paid or not, then why are legal protections required?
Well, at the heart of the issue would appear to be the concept of “fairness”.
Discovering new technology is difficult, but copying a technology once it exists is often a task that any fool can accomplish. And once a new technology has been copied, the production process can often be scaled up quite quickly.
What this means is that, in the absence of legal protections, a fast follower might be able to scale up more quickly than the original innovator and thereby take most of the benefits from innovation.
This seems like a very unfair outcome.
And it is not the kind of outcome that is encouraged in countries that champion innovation such as Australia, America, or the UK.
By making legal protections available for new technology, a community can give the original innovator time to scale it up and the chance to make an impact. And this is the community’s way of saying thank you for the gift of a new creation.
An issue arises though when multiple countries are innovating concurrently, each playing by a different set of rules.
Should we be concerned if new technologies are being created in America, say, and then copied and scaled up overseas?
On the one hand, this seems quite unfair. The reason that firms in Silicon Valley are able to innovate and develop new technology is that they are located in a country that supports innovation and provides appropriate legal protections. Having secured these protections, though, many of these firms then turn to foreign companies to help them scale up production. Thereby transferring employment, productive capacity and tax revenues overseas.
It is easy to see how some people might view this as unfair.
On the other hand, most Economists would argue in favour of technology transfer and the offshoring of production to low cost jurisdictions. Average labour costs in China, for example, are low relative to developed countries, and so increased production in China allows the rest of the world to benefit from cheap imports (and Chinese workers to benefit from rising wages). Many young people in China aspire to study in Western countries and buy Western products, and successful Chinese firms are likely to invest overseas. And so, by helping China to become more prosperous, America and other developed countries are helping themselves in a kind of positive feedback loop.
One thing that seems clear is that the creative process involves two separate components. Firstly, it requires some kind of creative leap, which might involve discovering a new technology, or combining existing technology in a way that people really love. Secondly, it requires a viable business model that allows the organisation to provide the new offering at a price which exceeds the cost of production, which is likely to require economies of scale and production experience.
The role of Silicon Valley firms in making the creative leap and pushing the boundaries of innovation is crucial for the creative process. At the same time, however, it might be argued that the role played by low cost manufacturers in places like Shenzhen, China is equally crucial because it allows new offerings to be created at sufficiently low cost to allow for viable business models.
Successfully harnessing humanity’s creative energy clearly requires high levels of cooperation. Lots of people in many different organisations working in various countries across the globe.
Thinking as an Economist, I would argue without hesitation that the more globalisation, foreign direct investment and international trade we have the better it will be for everyone.
However, we need to bear in mind that organisations and their respective country governments will typically care more about their own self interest rather than obtaining the theoretical optimal solution for the world as a whole.
Thinking as a strategist, I would provide some words of caution. When an organisation is thinking about outsourcing activities that provide value for the end customer, it is important to consider how strategically important those activities might be. Will outsourcing lead to the loss of crucial knowledge that will be difficult to re-learn? Is it possible that the supplier will become a future competitor? What are the firm’s competitive advantages and will these be strengthened or weakened as a result of outsourcing? Will the new supplier benefit from economies of scale and so be difficult to compete with later if necessary?
Thinking as a government policy maker, there are some other issues that might be relevant. For example, how many jobs and how much tax revenue might be lost as a result of local firms sending production overseas? Instead of providing welfare payments to unemployed people, would it make more sense to provide subsidies and tax incentives to encourage firms to incorporate and build production capacity locally rather than overseas? Is the outsourced knowledge important for national security? Are domestic firms outsourcing production to a country whose government is uncooperative or hostile to the values of the domestic country?
We live in a world where robots and the automation of work could lead to unprecedented levels of unemployment over the coming decades. And so, it has never been more important for individuals, firms, government and the world at large to think about how we can harness our collective creative energy.
Globalization will have a large role to play, but it will also be important for individuals, firms and our respective governments to act independently and work for the benefit for their respective stakeholders. Through cooperation, we can all be made better off.
On Thursday 23rd of June, the British people voted by a majority of 52% to 48% to leave the EU.
This is a monumental event, and it is worth trying to piece together what happened, and what some of the implications might be.
The voter turnout was strong with around 72% of voters casting a ballot. However, the results showed significant division within the UK, with different regions and demographics supporting different sides of the argument.
In England and Wales, a majority voted to leave the EU (53% and 52% respectively). However, within England itself, voters in London overwhelmingly opted to remain. Similarly, 62% and 56% of voters in Scotland and Northern Ireland voted to stay in the EU.
Perhaps even more interestingly, there were significant divides between key demographics. Regions that had a greater percentage of young people, residents with higher education, and higher median income levels were much more likely to vote to remain in the EU. Whereas, areas with older, poorer and less well educated residents overwhelmingly voted to exit the EU.
What does this tell us?
Well, some of the key arguments put forward by the “remain” campaign were about the economic benefits of staying in the EU. Leaving the EU, it was argued, would lead to increased unemployment, lower levels of investment, and lower levels of growth for the UK economy.
On a basic level, these arguments make sense. Economic theory suggests that free trade can increase the overall surplus available to producers and consumers. And investors are also much less likely to invest in a country when there is a lot of uncertainty. Reduced investment can reduce economic growth, and lead to a self-fulfilling prophecy of reduced investment, lower growth and yet still lower investment.
If these economic arguments are valid, and staying in the EU is better for the UK economy overall, then why would 52% of voters opt to leave the EU?
Well, putting the lies of the “leave” campaign to one side, I don’t believe it is particularly helpful to characterize all of the more than 17 million British people who voted to leave the EU as either stupid or racist.
If staying in the EU is good for the UK economy overall and would increase the size of the economic pie, then it may be that many of the people who voted to leave the EU don’t believe they will receive a fair slice of the pie (or any pie at all).
The referendum result highlights a growing tension in the UK and worldwide between the neo-liberal model which favours free trade and deregulation of markets, and a more social-democratic model (practiced in the Nordic countries) which aims to reduce poverty and support universally accessible public services like child care, education, old-age care, and health services.
Even large investment houses are starting to appreciate the risk posed by inequality.
Joachim Fels, a global economic adviser at Pimco, an international investment firm, wrote in a research note: “As I see it, the vote in the UK is part of a wider, more global backlash against the establishment, rising inequality and globalisation.” And Pimco has advised its clients that “… investors must start to anticipate new populist policy responses.”
Immigration was a big issue during the Brexit referendum, however I don’t believe, unlike some of my esteemed friends, that pretty much everyone who voted to leave the EU in order to limit immigration is a racist.
Lack of jobs, rising levels of economic inequality and uncertainty about the future can easily explain why many people might have wanted to limit new immigration to the UK.
That being said, economic stress can lead to high emotions and the desire to find a scapegoat for ones problems. Following the Brexit result being announced, the UK appears to have experienced an increase in racial abuse. For example, London’s metropolitan police say that they have seen a 57% increase in reporting to the “Stop Hate Crime” website.
Racism is a serious problem, but I believe it is a symptom rather than a cause of the division that we are currently witnessing in the UK.
People in the UK with the money and power to do so need to look for ways to reduce inequality and provide opportunities for the most marginalized members of their respective communities. And in doing so, they might benefit by taking a closer look at the social-democratic model adopted in the Nordic countries.
Increasing the size of the economic pie is an admirable goal, but if the system is set up in such a way that a growing number of people get no pie at all, then we shouldn’t be surprised if hungry people manage to find a way to spoil the party.