globalEDGE Blog - Page 176

This past week in Luxembourg, the European Court of Justice struck down legal opposition by the British government in order to move forward in creating a new tax law in the European Union. Commonly known as the "Tobin Tax," named after American economist James Tobin who first proposed the idea in the 1980s, the law would tax the financial sector of the EU in order to cover some of the costs placed on taxpayers in the outcome of the recent financial and debt crises. The European Commission first announced the proposition of the new law in 2011, during which it stated that the financial tax law would require institutions in participating member states to pay a tax of at least a tenth of 1 percent of the value of transactions with other institutions. Since then, debate among EU member states regarding the effectiveness and possible consequences of implementing the tax has ensued.

Technology companies all over the world have engaged in lawsuits against each other over various controversies since the beginning of the industry. Major corporations that produce smartphones, such as Nokia, Microsoft, Samsung, and Apple, have often engaged in 'smartphone patent wars', which are lawsuits over patent and design disputes. Often, these companies have sued each other in several countries at a time in order to protect their creative patents and keep up their presence in the global market. A typical case of this happened only two years ago when, on January 2012, Motorola sued Apple in a German court over allegations of Apple infringing on Motorola's technology patents. The results of this particular case and some others, however, spell a different story for the future of smartphone patent wars.

Negotiations on the proposed Trans Pacific Partnership (TPP) heated up over the past week during President Obama’s visit to Asia, although no major breakthroughs in the talks were announced. The negotiations slowed down during the President’s visit to Japan, as talks between the United States and Japan focused on the auto industry; the two countries have long had a rivalry in the auto sector.  Japanese car companies entered and ended the Big Three’s dominance of the US market during the 1970s. This tension has continued today, influencing the trade discussions and preventing the countries from reaching a deal during last week’s negotiations.

A disgruntled employee can have catastrophic effects upon the work environment of a company. Although it may begin with one person being unmotivated to complete their daily work tasks, his or her negative energy can impact other coworkers. One employee's unproductive mannerisms can also cause management resources to be diverted away from employees who consistently work hard and accomplish all tasks. In the long-run, this behavior is helpful to neither the employee nor company, as the company accomplishes less and the employee feels unsatisfied with his or her work. However, new human resources programs are being created to combat this issue in an innovative way.

The most important way to ensure achievement of mergers and acquisitions is to make sure the integration process with the other company is successful. While this may not be the most exciting aspect involved in merging companies together, it is by far one of the most important phases. Companies need to focus tasks on the integration process and make sure not to over-look it in practice.

Thanks to positive growth measures, the economy of the euro zone for the past month grew at its fastest rate in three years. Specifically, the release of the monthly Purchasing Managers Index (PMI) was an ample measure to earn more confidence from investors in European economy.

As Africa has moved itself into the investment spotlight, its lack of infrastructure has held the continent back from reaching its full potential. The unstable physical infrastructure in Africa, such as its transportation, communication, power, and water supply, is halting the growth that the country should be obtaining during this time, with its increased economic activity and competitiveness. With the proper investment and planning, Africa should be able to overcome this challenge and improve the now inadequate infrastructure it has long possessed.

Over the past decade South Asia has experienced rapid economic growth, but its infrastructure growth has not kept pace. The World Bank recently came out with a report, “Reducing Poverty by Closing South Asia’s Infrastructure Gap,” which found that countries in South Asia need to invest up to $2.5 trillion in order to bridge the infrastructure gap in the next ten years. An infrastructure gap is the difference between a country’s development goals and its actual capability to obtain those goals.

As the world's population continues to grow, more and more countries are beginning to realize the importance of improving infrastructure. The 2012-2013 Global Competitiveness Report repeatedly cites infrastructure as the single biggest hindrance to doing business in India, well ahead of corruption and bureaucracy. To address the needs of urbanization and global business, governments around the world are spending large amounts of money on infrastructure projects.

A few months ago, Brazilian authorities officially announced that $2.3 billion will be spent on infrastructure projects alone for the 2016 Rio de Janeiro Olympic Games. These costs will rise as projects are added along the way, and efforts to solve Brazil’s infrastructure gap continue. The pressure on the country continues as Brazil will be the first South American country to host the Olympic Games. On top of the 2016 Olympics, Brazil is also hosting the 2014 FIFA World Cup this summer and has experienced delays in its infrastructure preparation. Therefore, the focus on infrastructure development has sharpened in Brazil. Now the question is: How will Brazil’s infrastructure growth impact its long-term prospects as an emerging country in the global economy?