Welcome to Pontacks Coffee Shop

Photo courtesy of FreePhotos.com

There’s nothing really new about social networking, only the way in which we do it. Today we use Facebook or Twitter and a range of online forums and communities to talk about the things of most interest to us, make new friends and find new opportunities. In the 18th century social networking could only happen face-to-face and for many it happened at the coffee-shop. History often seems to turn full-circle and meeting at the coffee-shop was reborn when Starbucks, Costa Coffee and other contemporary coffee-shops took over from the pubs as the places to meet, greet and network.

When I set up this blog I was about to turn my hand to a new career in writing – producing web content, magazine articles and other print and online copy. This little blog became the place where, as a newbie, I would write about the things that interested me in the worlds of enterprise and current affairs. I have not been coming here as often since that work has taken off and so I have made a mid-year resolution to post more often and cover more subjects as my work introduces me to new subjects and new people.

Oh yes and the name…. Pontacks was a coffee shop my family owned in Liverpool, many years ago – there’s a very short history in the ‘About’ section.

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Observations on a Record Breaking Trade Deficit

Even with the most cynical and negative side of my persona, I cannot honestly say that I foresaw just how stubbornly weak the UK economy would remain. The double-dip recession was pretty much a foregone conclusion and the latest turndown in GDP far from a surprise. But the trade deficit hitting a 15 year high did take me a little by surprise.

There has to be some sympathy with the government of the day, when things are this bad. What seems to be staring us in the face right now is the eschaton of the economic aspirations of a generation. Talk of five, ten or even fifteen years to turn around the economic fortunes of the country seem like unsurpassed optimism right now.

Continually pointing a scolding finger at the Eurozone or suggesting that one extra day’s bank holiday in June scuppered a whole quarter’s economic growth prospects simply holds no sway. There are two fundamental reasons for the continued weakness of the UK economy: over-indebtedness of the national population; and, failure to sufficiently develop export markets in growth economies.

There is little that can be done about the over-indebtedness of the UK’s inhabitants – it is a harsh reality and nothing short of wiping-out personal debt across the nation will make consumer spending rise significantly. When times are difficult, when earning capacity is impeded, and when the future seems uncertain, each individual behaves just as the coalition government is: they reduce spending and focus on reducing their existing debt. Joe Public will not be helping the economy back to health anytime soon and with a protracted austerity economy being currently the only conceivable future, dependency on export markets becomes Hobson’s choice.

With that in mind, the biggest alarm bell rung by today’s trade deficit figures is that of the 9.6% fall in exports to non-EU countries. If an export led recovery is to take place, it has to be driven through non-EU exports. The bulk of Europe is made up from Eurozone nations, many of which are going to be on life-support systems for many years to come. The economic fragility of the Eurozone means that trade with them is bound to recede and focussing export attention there is, in all honesty, futile.

Whilst not suggesting that there is anything typical about my business, a geographic breakdown of my new customers over the last two months shows that 50% are based in the USA; 20% are UK companies; and, the remaining 30% are other non-EU countries. Add to this the fact that, with one exception, all my home-grown work has required me to actively pursue sales: in contrast, the remaining 70% of overseas customers have come to me purely as a result of my web-presence.

For the UK’s economic fortunes to turn around, the non-EU trade gap between imports and exports has to be turned around. Our export focus has to switch to the BRIC countries, the more stable Middle Eastern economies, and dare I say it (the graveyard of many a British business) the USA.

The British Chamber of Commerce’s chief economist, David Kern, is quoted by the BBC as saying: “There is no question that British exporters are facing major challenges as a result of problems in the Eurozone, but the rebalancing of the UK economy towards exports is taking too long.” It will be far longer still if British exporters do not look past the Eurozone to where the real business is.

Author: Mike Paice

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Education: Back to Basics Again – Part II

Image: FreeDigitalPhotos.net

In the first part of this post, I took the stance that education systems are all too often unfit for purpose because they do not meet the needs of their customers – the students. I also suggested that simple changes to the way that core subjects are taught or examined could be all that is needed to make a huge difference to a generation. Grand visions of scrapping one kind of exam and introducing another are pretty myopic, unless the basic failings of the previous system are addressed first. New school ‘models’ produce interesting results, usually in isolated examples, but are logistically and economically challenging to roll-out across a nation.

It is always the little things in life that really matter – get enough of those right and great things happen. So here are three little changes that could help to make great things happen in teaching three core skills:

Foreign language teaching

For the majority of students, the spoken word is pretty much all that they will ever need to know when it comes down to foreign languages. Whether used on holiday or in business, our primary method of communication is the spoken word. It helps to be able to read basic words and statements but you can get by with just oral communication in most scenarios. For the majority of students, this is what their foreign language education should deliver – a decent level of fluency and understanding of the spoken word in a second language.

We learn our own language by simply hearing and repeating. Our vocabulary expands as we identify objects and repeat the sound that goes with them. It is a little while before we start to look at the printed word that belongs to each object or sound and even longer before we start to understand the construction of the written word. In fact, you don’t even need to know the alphabet to be able to communicate orally effectively.

Learning a foreign language at school should be compulsory, if only to the extent that students are all able to speak a second language reasonably fluently. From the ages of 5 to 11 schools should focus on oral communication in a foreign language. From age 11-up a greater focus can be given to the written word but the primary aim should be that by age 14 a decent standard of fluency is achieved across the majority of students. It is debateable but if the spoken word comes to you more naturally, the written word becomes less intimidating.

The mysterious science of mathematics

The argument here is similar to that for foreign languages. Remember the curve of forgetting mentioned in Part I? Perhaps in no other subject does this curve help to perpetuate the mystery of mathematics. And perhaps further, in no other subject does this curve help to destroy the futures of young students leaving school.

When did you last use quadratic equations? Has understanding binary code ever helped you in your career? Has your boss ever asked you to use the formula E=MC2 to drum up new business? And when was the last time you failed your sales targets because you couldn’t remember that Pi = 3.142?

That might sound a little flippant but there is a point here. Few of us will ever need to know, for our entire adult lives, most of what is taught in the maths classroom. Shop-workers, call-centre managers, office administrators and (dare I say it) most language and classics professors do not need this level of mathematical comprehension. Failure to grasp mathematics at this level will, however, lead you to fail that all important end of school maths examination and result in employers considering you inept at numeracy – sorry, no office junior job for you because you failed to get a GCSE A-C in mathematics.

You don’t need a Master’s Degree in mathematics to work out that most jobs need only a pretty rudimentary understanding of the subject. So why not split the examination into two distinct exams (like we do with English language and literature)? The first examination should be every-day mathematics and indicate competence in the elements that most employers are looking for in their employees. The second examination should be for higher mathematics, which will be of more use to those looking for further academic study or work in more technical environments. Is it really that simple? Of course it is – that’s why politicians use expressions like ‘back to basics’ and ‘prioritising the three Rs’.

And finally….

English – our mother tongue. A few straightforward points need to be made here: (1) no set books – it really does turn students off. Encourage reading books but let students choose and review what they want to read; (2) no enforced learning of poetry by rote – this also turns students off. A little time spent comparing the work of classic and contemporary poets (if it is done well) will do more for the medium than rote learning and anyway, school is not about promoting poetry; (3) as with mathematics, what standard of English do most employers need of their staff? They probably don’t need them to be able to recite Gray’s ‘Elegy Written in a Country Churchyard’ (as beautiful as it is) – but they probably do want them to know where to put the apostrophe, how to spell ‘churchyard’ and how to use ‘Title Case Format’ when preparing a press notice.

We should not go back to ‘O’ levels, they are not right for the 21st century. We need curricular that deliver what students need and exams that clearly equate to the needs of employers. Learning is changing but if we get it wrong, again, more generations will be needlessly held back by meaningless examination grades.

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Sobering Thoughts on Gun Crime

Statistical comparisons between the UK and the USA rarely have any real value. You have to adjust the figures to reflect the huge disparity in the size of our respective populations if there is to be any real perspective given. Every now and then, however, you read something that stands out as quite startling and recently an article by Andrew Cohen in Wednesday’s online version of The Atlantic did just that.

Andrew highlighted the huge difference in the US government’s spending on fighting terrorism versus national gun crime – about 1,000 to 1 in favour of the fight against terrorism. It is an interesting and poignant article but one figure jumped out from the page as simply horrendous. Each year some 31,000 Americans are killed by firearms. Although on this side of the pond we understand that gun crime is always going to be a bigger issue for American citizens, few of us still see the country as the gun-toting Wild West of 1950s Hollywood movies. But figures like this do tend to bring your view of America back towards that image. Not to mention that when you are there, you are faced with unsettling ‘no firearms’ signs on so many public buildings in the country’s cities – you can imagine the outcry if such signs became commonplace here.

So with the caveats of my opening paragraph in mind, I compared America’s gun crime figures with figures for a major cause of mortality concern in the UK – road deaths. I found that in the last decade 28,000 UK citizens died as a result of road traffic accidents. So during that same time nearly a third of a million American civilians died at the wrong end of a gun. Again, there are huge comparisons of scale if you want to talk about figures as a percentage of population. Even so, as a warning that we must keep on top of our own battle against the rise in gun crime, I think these simplistic comparisons bring the picture sharply into focus. Is our government prioritising funding to tackle gun crime any more appropriately than America’s? Probably not but let’s just make sure that we keep the pressure on them to treat our gun crime problem with the seriousness it deserves.

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Education: Back to Basics Again – Part I

In any line of business, success or failure will be determined by how closely a business’ offering meets its customers’ needs. If a business does not really understand who its customers are and what their needs are, it is already on shaky ground. This explains in part why national education policy has failed for decades to be fit for purpose – politicians and educationalists, as guardians of the national education system, appear to be uncertain about who their customers are and what it is that those customers need from the education system.

The customers

I will be accused of being over-simplistic but in terms of secondary education, the customers are the students – not the universities, not the employers, and certainly not the government education department’s statisticians. In the business of education you are blessed (or cursed) with the most diverse clientele on the planet. Your customers have mixed abilities, interests, learning styles, cultures, aspirations – the list goes on. Despite this, they all have one common need – an education that makes them feel confident and fit for employment. An education system that does not deliver this, simply fails to meet its customers’ needs.

Another complicating factor in the business of education is that many of its customers will not know what line of employment they wish to be made ready for. Some will come with a clear and enduring vision, some with an evolving vision, and some will pass through the system with no vision whatsoever about what they will want to do in the future. Tailoring the education offer to deliver on such a broad and seemingly uncertain mandate is challenging but not impossible.

Most learning is forgotten

I once took a training course for using a well know database programme. The original need for that training failed to materialise and when I next came across that particular database programme I realised that I remembered virtually nothing I learned on the training course. This is true of all education – if the knowledge it provides is not used, it is lost. Some academics have even demonstrated that there is a curve of forgetting, suggesting that within a month of learning something new (that we then don’t use) that learning is forgotten almost entirely.

Herein lays one of the fundamental problems of education. Subjects tend to be taught in chunks, over a number of years and then the student’s memory is tested by an examination. It is hardly surprising that many students will struggle with today’s expansive curricular. Most of what was taught is rarely covered again and review sessions at the end of term and cramming in the run-up to examinations have little real benefit – only regular use of the information learned will ensure the development of lasting skills in a given area. Ask yourself how much you remember of a subject you studied at school but that you have not used since. Even if you passed the exam at the time, could you still pass the same exam today?

Education is critical to success in life. But most of what is taught is effectively useless to the majority of students – it isn’t used and is promptly forgotten. That is why many education systems constantly let down their customers. That is why employers are regularly disappointed by the standards of mathematics and English manifest in job seekers. And that is why new approaches to teaching and examinations are critical.

Part II of this post will consider some relatively simple changes that could make a big difference.

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Civil Service Cuts: Still flogging the old nag

The UK’s Civil Service is already smaller than it has been at any time since World War II (WWII). But the general consensus within parliament and within the economic and political communities is that this is only a start and that the service needs to be made smaller still. Whether that further contraction should be by a relatively modest 10% or by a huge 90% (as suggested recently by one government minister) remains open to debate.

It makes sense for every country to have the smallest civil service it needs to run the country efficiently. And when you think of all the extra post war administrative burdens placed on the UK – reams of employment law; health and safety law; European Union law and obligations; the welfare state etc. – have we really done so badly in keeping the size of our civil service at the levels we see now? From my time in Whitehall, one of the biggest problems faced by civil servants when being asked to cut numbers is that their political masters either cannot or will not decide what areas of work no longer need to be done. After all, everything the civil service does is born of some political or administrative need.

This political procrastination, however, always results in a little tinkering around the edges and the remaining civil servants being told to do more with less. Three decades of this approach has actually resulted in an institution that, whilst being far from lazy, is grossly inefficient. Recent OECD figures on annual average hours worked by individuals across its 34 members, places the UK quite poorly on just 1,647 hours per worker per annum. This figure is not one that I relate to, either from my time in Whitehall (where my co-workers and I easily exceeded that figure by more than 400 hours) or from knowledge of the even longer hours worked by my friends and colleagues in the private sector. Whilst there are lazy individuals in any large organisation, implying that dealing with a few lazy civil servants will turn Whitehall around is just living in a strange politicians’ fantasy world. There are institutional issues and gross inefficiencies but it would take a surprisingly enlightened and creative government to develop and install a more efficient model based on current expectations of what the service must deliver.

Now, because of pay curbs (and a pension that, whilst still very good, is nowhere near the gold plated carrot it used to be) the civil service is finding it difficult to attract and recruit the best new talent. These are the findings not of some hardened egotistical Whitehall mandarin but of Lord Browne – a man brought in from the private sector to improve the way Whitehall is run. This doesn’t auger well for the future of our civil service and the administration of our government. We need to attract the best and brightest into the civil service and they need to be given manageable portfolios, allowing them to give the best of themselves and the best to our government. The simple fact of the matter is, if the Government wants to drastically reduce the size of our civil service, hard decisions need to be taken about what we as a country stop doing. At the moment, our political generals are simply flogging a terminal old nag and expecting it to win the Grand National.

My advice to the Government is “stop tinkering and get radical”. If you want a civil service 50% smaller than it is today, you will need it to stop doing 50% of the things it currently does – new efficiency measures simply will not change this equation by more than a few percentage points.  The difficulty here is who assesses what can reasonably be delivered with such a reduction in resource? Politicians will expect far more than is reasonable from a drastically downsized civil service (most have no concept of what is reasonable because their political life is a 24/7 calling, rather than a job) and senior civil servants will generally offer more than their smaller teams could hope to deliver well (a mixture of ego and self-promotion usually clouds their judgement in such matters). And, actually, both parties are terribly change-averse.

If a fleet-of-foot, innovative, efficient, thoroughbred of a civil service is what is aspired to, Lord Browne and his business colleagues should be given free rein to develop such a model. Only business-people have the tools and experience to deliver this level of institutional change and they can only do it if they are allowed to.

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Business Growth = Economic Growth: And the curse of technophobia

It’s a simple equation really: business growth = economic growth. The phenomenon of governments trying to influence the first element of the equation is nothing new – neither is their inability to succeed in any meaningful way.

The first hurdle governments always seem to fall at is when they ask SMEs if they want to grow. The majority response is usually “yes” and the uplifted politician on the receiving end of this good news scurries off before hearing the inevitable “but”. Even if the politician stays around long enough to hear the “but”, the truth will rarely come out; only the usual negative influencers of growth may follow (finance, regulatory burden, employment law etc) and they are big enough challenges for any government. And whilst these are justified concerns that need tackling, they often hide other facts that are arguably more significant for your average SME.

I have attended business round tables where the stream of useful suggestions on how to encourage business growth masked the fact that half of those SME representatives at the table had no desire to grow their business in the first place. Of the remainder, two-thirds probably would grow their business somewhere down the line but left you with the distinct feeling that world peace would arrive sooner. This left the loudest voice to those who talked from either a purely academic perspective or who were already trying to reach-out and grow their business. Little wonder then, that whatever governments do to encourage business growth, disappointment is almost always on the cards.

As the current economic crisis has deepened, our politicians look increasingly desperate. They know that increasing the start-up rate is one thing – and right now, necessity entrepreneurship is pretty much doing that job for them – but increasing growth from the current business gene-pool is now even more difficult. Too many miniscule, stationary businesses will eventually drag down productivity and the national economy but even those SMEs that want to grow will be reluctant to invest too much of their reserves in such uncertain times – and who would blame them?

So what should be done? To start with, the Lisbon Council’s recent policy brief ‘Wired for Growth and Innovation: How Digital Technologies are Reshaping Small and Medium Sized Businesses’ should be added to the essential reading lists of the leaders of our key government economic ministries. The report argues that encouraging greater use of technology by SMEs has the potential for profound and positive changes at ‘minimal political cost’. It highlights the role of technology in reducing business costs and overheads and the business benefits of making extensive use of cloud technologies. And if in need of some evidence, sales by high and medium-use web businesses in the UK grew by 4.1% annually between 2007 and 2010, which was roughly seven times faster than for low and non-web-use businesses.

From the practicality of micro-manufacturing, to the affordability of three-dimensional printing; and from the dynamism of crowd financing to business models that exploit hypothesis-testing and experimentation in the marketplace, this policy brief highlights exactly how the new kids of business will succeed. And whilst the seven point ‘to-do list’ is Europe facing, the fact is that policy-makers and politicians have all the signposting they need in this document to develop a strong blueprint for economic growth through SME exploitation of 21st century ICT.

If anyone thinks that we can rest on our laurels because (at least in European terms) the UK may be doing rather well, I suggest not. There is so much more we can do to encourage established businesses to work smarter through the exploitation of modern, web-assisted ICT and if we don’t take action we run the risk of too many of our SMEs remaining stationary and bringing little or nothing to national economic growth.

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SME fear of the future drives double-dip

So we’re here – officially in the second dip of our double-dip recession. At the coffee shop we never saw a way of avoiding it – although, if I am honest, there was just the shortest of times when we thought that just maybe we would escape.

Let’s face it Flat-line George has to tackle the debt situation. There is no alternative to that because our current level of debt is unsustainable. And to be honest you cannot cut debt too quickly, only too slowly. But what can the Government do, realistically, to “stimulate growth and employment”?

Ask any SME owner if they want to grow their company and most will say “yes”.  Ask what the obstacles are to SME growth and most will rattle out the usual “lack of bank lending”, “excessive and restrictive regulation” etc., etc. This is all fact and unless these issues are tackled head-on SME growth will remain stunted. Current Government interventions to tackle some of these obstacles are positive and in the right environment might start to have some impact. But take a look at the environment businesses find themselves in and you might understand why nothing yet seems to work.

It really is time to take our heads out of the sand. The biggest obstacle to SME growth right now is fear of the future: economic instability in Europe; political upheaval and instability in the Middle East; a rapidly contracting public sector customer base; and, consumers around much of the world simply not buying as much as they used to. How many SMEs are prepared to risk their economic stability by investing in growth against that backdrop? Answer: virtually none.

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