globalEDGE Blog Archive November 2013

One thing companies are always concerned with is productivity. How can managers increase their productivity? How can they increase their employees productivity? Companies along with scientists have spent huge sums of money trying to figure out the key to not only productivity but success—both on an individual and company wide level.

It is no secret that happy employees are more productive and overall better employees. Employees that identify as low well-being are seven times more likely to be absent from work and seven times more likely to be looking for a new job. This leads to an overall lack of productivity from what is known as presenteeism. Presenteeism is when employees physically show up to work but lack productivity because they may be having any multitude of personal problems.

Now that 2013 is wrapping up people are interested in predictions for 2014. Two important predictions to look at are the global economy and global business. These two factors usually go hand in hand; if the global economy is looking brighter it may be due to the fact that global business is increasing. Since a large plummet in 2011, global business and the global economy have slowly been increasing and there is more confidence on what the future holds.

Within the next two decades, Brazil is expected to triple oil production and move from the 12th top oil producer to the 6th according to the 2013 World Energy Outlook Report generated by the International Energy Agency (IEA). The predicted success of Brazil’s energy industry can be attributed to the auctioning of the Libra oil field which holds 8 to 12 billion barrels of recoverable oil. With a supply of oil this substantial, the world’s crude oil demand could be fulfilled for up to 9 weeks alone by Libra.

Ukraine’s economic future is contingent on a key decision that will be made by government leaders in the next couple of weeks.  In short, the country’s leaders must decide whether or not to accept a free-trade and political-association agreement with the European Union.  If Ukraine passes on this agreement, it is likely that the country will become a part of the Russian-led Customs Union, which also includes Belarus and Kazakhstan.  This decision will undoubtedly shape Ukraine’s economic environment going forward, especially related to trade.

While most Americans view cities such as New York, Los Angeles, or Miami as truly global cities with a wide variety of different cultures, foreign businesses, and spoken languages, a recently released resource titled "Mapping the Nation" reveals that often over-looked cities and counties throughout the United States actually contain more global connections than one would expect. Presented by the Asia Society, Longview Foundation, and SAS Institution, this resources contains data from over 3,000 counties in all 50 states regarding how globally connected Americans are to the greater international system with regards to economic, demographic, and educational factors.

Recent financial figures have shown that several countries around the globe have experienced some of their lowest inflation rates in years. Normally this would be the goal of the nations' central banks, but in the economic states of these regions, this low inflation could be the source of several problems. Now the issue facing many of the world's richest nations is to avoid extremely low inflation and to try and raise prices. The proposed processes to achieve these goals have the potential to lead to some intense competition.

In terms of art, China is certainly in a buying mode. Meg Maggio, an American gallery owner with 20 years of experience in China, found that western firms are pouring into the Chinese art market nowadays. This year, China has officially surpassed the United States in becoming the world’s profitable art and auction market. The Chinese art market posted auction revenues of $8.9 billion in 2013. However, freedoms of foreign firms in the industry are strictly limited by Chinese authorities and competition has increased between local and foreign firms. This post will address the challenges that foreign auction houses are facing in the Chinese art and auction market.

It’s not too early to start planning for 2014! The 2014 year holds an extensive list of Food Export Association activities, programs, and services to help exporters of Michigan food and agricultural products begin or expand their international sales. They provide educational programs, export promotions, customized export assistance, market entry support, and a cost-share funding program. The 2014 Food Export Activity Calendar includes the dates, locations, and other details about buyers’ missions, seminars, focused trade missions, and more!

Major changes could be coming to China, after officials released plans to reform economic and social policies. China’s president, Xi Jinping, unveiled reform plans after a four-day conclave of Communist Party leaders in hopes that the economic changes will increase economic growth, which has slowed since the world-wide recession. Along with the economic reforms, plans were made to relax the one child policy and close labor camps, both infamous in the international community. The reforms, if implemented, could have wide-ranging impacts on society and business in China, improving human rights and opening new sectors of the economy to private companies.

While many members of the European Union struggle to recover from the global financial crisis of 2008 and the European debt crisis, the Baltic countries are making a strong comeback. The Baltic countries of Estonia, Latvia, and Lithuania have recently experienced real GDP growth well above the euro area average. While other countries like Greece, Italy, Spain, and Portugal continue to struggle in midst of European debt crisis, the Baltic countries are leading way to recovery. Lithuania and Latvia are predicted to remain the best performers in Europe, with GDP growth surging over 3 percent for both countries. Looking at the recovery path of the Baltic States, many business lessons can be learned from these countries.

Over the last 30 years, Russia has been the only gas supplier to the Baltic countries of Estonia, Latvia, and Lithuania. As the gas price and demand has dramatically increased in the Baltic States, the European Union (EU) is has made plans to subsidize a regional liquid natural gas (LNG) terminal in the Baltic States. These plans are designed to decrease the Baltic countries' energy dependence on Russia and to meet the continually increasing gas demand. However, two issues aroused along with the project: where to build the LNG terminal and how to ease the relationship with Russia.

The Baltic countries are known as some of the most ambitious and educated countries in the world, and they also consist of some of the most liberal policies for trade and investment. Their drive for success has been a critical factor in their success after the financial crisis plagued the European Union. The Baltic countries were a hot spot for investment before the crisis, with all of their intelligence and FDI flowing in. Possessing all of these incredible characteristics and policies would allow one to assume that they would be a good match against a global financial crisis, but that person would be wrong.

Venezuela experienced an extreme 12-month inflation rate of 54% last month and shortages of basic goods. Venezuelan President Nicolas Madura has responded to extreme inflation by forcing managers of local businesses to lower their prices with arrests and armed forces. The socialist leader stated that the seizure of these stores was just the tip of the iceberg and that he will take over more businesses. These events could have a major effect on Venezuela’s economy, including an outflow of foreign investment and firms.

Recently, the European Commission traveled throughout the Baltic Countries, which include Lithuania, Latvia, and Estonia, to promote the European Union’s plan for Rail Baltica. This project plans to connect the three capitals of the Baltic countries with a high speed train and cut the travel time to about four hours. Despite the promotion by the EU, there are still many headwinds that this project faces.

Today begins our blog series featuring the Baltic states. The Baltic states consist of Estonia, Latvia and Lithuania. With the Kunda culture of the region dating back to almost 8,000 BC, the region has a rich history and distinct culture. Beginning in the twelfth century the region was bounded together by Hanseatic League that included almost the entire Baltic region and northern Germany. The goal was for the cities to band together for mercantile purposes. This included a legal structure of its own that governed the cities as well as armies to protect the interests of the members.

The British bank HSBC recently came out with a study that looked at the best countries for expatriates, people residing in another country, to live in based on economic opportunities and quality of life. The study came out with some surprising results. Amongst the best countries for expats to live in include small rich countries, and amongst the worst are Western European countries. Although some of the countries have better qualities of life, many of these countries are not welcoming to foreigners.

When travelers make their way to the airports this holiday season, they may begin to notice a major change in the infrastructure of the airline industry. The continual addition of ancillary fees, or fees incurred outside of ticket costs, is becoming a larger component revenue for major airlines. Due to the highly concentrated industry, George Hobica, founder of airfarewatchdog.com stated that airlines “have to differentiate themselves to compete.”

A topic becoming more and more popular in the business realm today is the differences of Generation Y, otherwise referred to as Millennials, and the rest of the workforce. The needs, wants, and leadership styles of Generation Y are drastically different from earlier generations; this is causing a great shift in the way businesses operate around the world. Generation Y is the generation born between the 1980’s and early 2000’s. Millenials are currently working in the business world and will continue entering for years to come. It is vital for companies everywhere to learn and adapt in order to retain Generation Y employees.

Within the European Union (EU), Poland stands as the union's coal-producing giant. Although the country suffered declining production rates during the global financial crisis, Poland's coal-mining sector has shown signs of recovery. More than 88 percent of Poland's electrical needs come from coal, and the mines at Belchatow are more than eight-and-a-half miles long, two miles wide, and have been measured to be the largest carbon emitter in Europe. Poland's coal industry produces 77 million tons of coal per year, making it the world's 10th largest coal producer. Due to the importance of Poland's coal mining industry, the Polish government has been increasingly active in blocking aggressive regulations by the EU to limit climate change.

The number of tourists traveling to Beijing, China’s capital, in the first three quarters of this year has dropped by roughly 50%.  The main reason cited for this drastic decrease in tourism is poor air quality.  In 2010, it was reported that air pollution contributed to 1.2 million deaths in China.  Additionally, China spends a staggering 6% of its annual GDP on health care costs, material damages, and premature deaths caused by air pollution.  China must do something to combat this serious issue or risk losing more than just tourists.

Pensions have become an increasingly talked about topic of late. With bankruptcies of cities, and most notably of Detroit, it is unsure whether people who worked their entire lives with the promise of a retirement will actually receive such. The trick with pensions is how does a company or city adequately plan for retirement costs decades into the future?

Latin America has not had one of their best economic years. The International Monetary Fund has predicted a lower-than-average 2.7 percent growth in Latin America's total economies. This is not surprising, seeing as several factors such as poor trade, inflation, and slow economic growth are affecting many nations from this region in a rather devastating manner. Here is a closer look.