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Onwards and outwards, David Smith, Economics Editor, The Sunday Times


March 2017 |
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When voters chose to embark on Brexit last June, it seemed to be sensible to think of this as a three-stage process. Stage One would be absorbing the vote and positioning the government to embark on the formal exit process. Stage Two would be the two-year Article 50 period, by the end of which – assuming no extension to the timetable – Britain would be formally out. Stage Three is when Britain makes it way in the world and negotiates new trading and other arrangements.

As I write this, the phoney war is almost over and the first stage is drawing to a close. It has been action-packed, including what is effectively a new government, and certainly a new prime minister. There have been court challenges and defeats, and plenty of parliamentary skirmishes, though the government’s simple Article 50 bill finally passed through parliament without amendments. Apart from a much lower pound, and the coming rise in inflation I wrote about last month, the economy has had a good phoney war. Growth has continued at a decent pace and for most firms it has been business as usual.

Will the calm continue during the Article 50 exit process? When I talk to businesses about Brexit, a few things emerge. None think there is any prospect of the referendum result, and therefore Brexit, being reversed. Most regret the fact that Theresa May has ruled out continued membership of the single market and has suggested that Britain will not be part of the full customs union either. Some fear serious labour shortages if there is a big drop in EU migration to Britain. While few can match Pret a Manger’s experience, in which only one in 50 job applicants is British, a lot of businesses rely on EU workers.

There is, it should be said, no reason why Britain, and therefore British business, should not get a satisfactory Brexit deal. There is a common-sense outcome in which commercial reality, and mutual self-interest, trumps political posturing. The prime minister’s insistence on a truncated timetable, in which both exit and the negotiation of a new EU-UK trade deal can be achieved within two years, can also be managed if both sides agree on transitional arrangements. These, it seems to me, will be essential, though some hard-liners see them as an attempt to drag out EU membership for longer. We had years of transitional arrangements when we joined the European Economic Community more than four decades ago. If they were acceptable on the way in, they should be equally acceptable on the way out.

A common-sense approach would also include as much transparency as possible. Keeping business informed about the course of the negotiations, without giving all the detail away, will be essential. Keeping firms in the dark would risk a prolonged period in which decisions, including investment, are put on hold and the economy suffers.

Will common-sense prevail? Mrs May is a no-nonsense politician who has barely put a foot wrong since succeeding David Cameron last summer. She and Philip Hammond, the chancellor, appear to have missed the fact that increasing Class 4 National insurance contributions for the self-employed would break a 2015 manifesto promise, and this has led to her first significant reverse. How big a problem that will be remains to be seen, but every politician is entitled to a slip or two.


US Business Panel Research Report on the economic outlook


March 2017 |

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16% of the panel expect the economy to grow significantly over the next 12 months, with a further 57% expecting it to grow marginally.  These figures are well up on last year (3% and 44% respectively).  

The figures for 3 years’ time show even more optimism.  37% of the panel expect the economy to have grown significantly whilst a further 42% expect it to have grown marginally. 9% expect it to shrink a little and 3% expect it to shrink significantly.  

On the whole, the panel seems far more positive about their own organization than they do about their wider industry sector.  The highest proportion of the panel expects to see steady growth, clearly viewing their organization as superior to the 40% likely to ‘struggle’ within their industry sector.

Headcount - the highest proportion of the panel have increased headcount and may do so again, with a further 5% having increased it though not expecting to do so again.  On the flip side, 20% have decreased and may do so again, with a further 6% having already decreased it, though not expecting to do so again. 
The two areas that buck this trend are Sales and IT, with 44% and 49% respectively, of organizations looking to increase headcount in these areas, versus only 11% and 21% looking to reduce it.

59% of the panel feel their revenues will increase over the next 12 months with 61% feeling their profits will do likewise.   

31% expect to see their budget increase compared to 23% who expect it to see it go the other way.  The rest, 46%, don’t see it changing.

20% of organizations expect to move some part of their business outside the US over the next 2 years.  The most popular destinations are South / Central America and Western Europe.

The Richmond Business Confidence Index.

The graph shows that respondents are slightly more optimistic about the prospects of their own organization than they are for the US economy as a whole,  and much more optimistic than they are for the world economy.

In terms of their own organizations 16% are very optimistic, whilst a further 65% are quite optimistic.  This leaves 17% who are not very optimistic and 2% who are not at all optimistic about their organization’s prospects.



Digital Marketing forum - the topics that dominated the day, Sandra McDill, Managing Partner, Convertr


March 2017 |

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Convertr recently attended Richmond's Digital Marketing Forum and these are her views on the hot topics discussed at the forum. 

A few weeks ago, Convertr attended an exclusive marketing event that challenges the typical industry norms of conferences and networking. The Digital Marketing Forum by Richmond Events, held at the prestigious Grove Hotel in Hertfordshire, saw 140 senior clients and 60 agencies and tech companies meet to discuss their buying needs and learn from a full conference on the most pressing industry topics.

The format enabled clients and suppliers to submit their needs and services in advance and mutually agree to meet on the day. This ensured the jam-packed day was as productive as possible for every attendee.

So what does the future hold for digital? Or rather, what does digital have in-store for the future? Wired Editor in Chief David Rowan opened the day with a keynote to address this ambitious question, discussing the technology that will drive the evolution of digital marketing. From next-generation AI for customer service to self-fly helicopters, Rowan demonstrated the possibilities available for marketing when it fully embraces the power of technology.

Beyond the stage, however, the conversations we had with clients and agencies were led by the same central issues, and questions over the current state of the marketing industry dominated the day:

ROI

Every conversation we had, whether it was in the queue for the delicious lunch or in our range of 1-2-1 meetings, included ROI. It was apparent that the challenge of attributing revenue to spend crossed all channels and sectors, prevailing as a universal focus for everyone.

The overwhelming problem seemed to come from a highly fragmented ad tech space, where PPC, SEO, Social, Programmatic, Affiliates, Email and everything in between was managed via a different person or agency, using a different technology, different metrics and creating differing results. Without one single measure of performance, measuring ROI was seemingly impossible.

Whilst we were delighted that a problem we help to solve was so widespread, it certainly made us aware of how it is impacting clients and, more importantly, where the industry needs to adapt to keep up.

Transparency

With an audience of both clients and agencies a dialogue around transparency was inevitable. As one of the hottest topics in the industry press, more and more clients are expecting a full view of their budget as standard; especially when it comes to asking their agency for a full disclosure on media spend and performance.

It’s fair to say that agencies have had a bad press over the years for this topic, and as someone who used to work agency side, I know it’s not all valid. However, it was very clear that brands are demanding more transparency and want to feel involved in how their money is invested to deliver the earlier point of ROI.



Jim Lawless opened The Richmond L&D Forum talking about "Ten Rules for Taming Tigers""


March 2017 |

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Accomplishing “Mission Impossible” is now critical to the survival of a business or a career and depends upon our ability to adapt to and create disruptive changes, to seize opportunities at pace, to play to win rather than play “not to lose”, to engage and empower others and inspire action.

Our greatest asset in creating and adapting to change is also our greatest liability: The Human Mind.

When the leaders and people across an organisation begin to understand, own and enjoy the mind-set that creates purposeful change, “Mission Impossible” becomes a live possibility. That’s the reason Jim Lawless created the “Taming Tigers” framework.

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The top five conference sessions on the day were:

Learning that drives change: creating an agile workforce

The reality and the rhetoric of talent management in organisations! 



What are IT Directors buying? Richmond IT Directors' Forum - buying intentions


March 2017 |

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IT Directors at May’s IT Director’s Forum have already indicated the areas where they will be implementing or considering new technology over the next 12 – 18 months.

The top 14 areas include:

Business continuity
Dashboards
Reporting
Itil
Disaster recovery
Business intelligence
Back up & archiving
Project management
Roaming & remote working
Mobile device management
Career management
Mobility solutions
Data archiving
Cloud – applications

Full details of all areas of interest are available from Charlotte Doniger.



Failure to launch syndrome (or "When are the kids ever going to leave home?"), Nicholas Turner


March 2017 |
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Let’s look at the statistics both in the USA and the UK.

In the USA in 1960 the average age for the groom was 23, and the bride 20, but by 2011 this had crept up to 29 and 26 respectively. In the UK in 1970, 80% of brides were under 25, however by 2012 this figure had shrunk to 14%. In the 1980s 60,000 UK brides were teenagers but by 2012 this was down to 3,000, with the average age of a bride up at 34 years old.

Back over in the States, Pew Research concluded that of young adults between the age of 18 and 34, they were more likely to be living at home than in any other living situation. This was broken down as 32.1% living with parents, 31.6% living with a spouse or partner in their own home, and 14% were living as a single parent or sharing with roommates or renters. The rest were with other relatives, or continuing education institutions.

In the UK 3.3 million 20-34 year olds are still living with parents, a leap of 618,000 since 1996, according to the Office for National Statistics. A fifth of 25 to 29 year olds still living with their parents, and half of those aged 20-24 and one in 10 aged 30-34 are also in the same boat.

This is a seismic shift in how we are structured as economies, countries, and communities. The analysis of why is easily repeated by every politician or economic expert, referring glibly to the property ladder being too expensive to reach that first rung, and combine that with most young  adults are remaining in education longer. These facts are unassailable but do they really explain the trend. How far do the surveys extend into probing which economic/social section of the” young adults” account for the rapid rise in the “failure to launch” syndrome.

The syndrome deserves further analysis.

Marriage, as an institution, surprisingly, is faring well. Young people broadly believe in it still, and there has been only a slight decline pro rata in marriages recorded in churches and civil offices over the last 30 years. The biggest decline in weddings has been the teenage bride marriages, and that has gone hand in hand with society being far more accepting of children born out of wedlock, and therefore shotgun weddings have become a thing of the past. Even culturally, there has been a rapid decline in arranged marriages, due to modern value changes in many of the more traditional religions.

Education is playing its part. Not only are more young adults remaining in continuing education longer but by virtue of them being better educated their approach to modern living is driven be monetary common sense and reason, rather than pure volatile teenage passion. The huge increase in University placements and the rash of new Universities across the UK tells us 2 things. First it confirms the upward rise in average age of young adults still receiving education as opposed to working, and secondly it confirms a correlative increase in those taking on substantial debt because of the requirement to repay tuition and other fees on conclusion of that education.

However, that does not explain the fact that there are still a large number of young adults that do not go into tertiary education, instead leaving school as teenagers and here you will find that the proportions of this group “not living at home” although slightly diminished, the figure remain surprisingly stable over the last 20 years. These young adults are moving away from home with as much speed as they used to, often into shared or rented accommodation with partners or other young adults. The incidences of childbirth amongst this sector still remains at a younger average age and with much the same birth rate as it has for the last 20 years.
It is therefore the, once referred to as middle classes, or white collar workers’ children that are responsible for the syndrome.

Responsible analysis tells us that these largely aspirational young people want their own homes, and they want to be free of debt and inevitably in the current economic climate of housing shortages, high cost mortgages and shortage of well paid professional jobs then inevitably our children have nowhere to go for some time, other than to remain at home.

But I blame our generation for this calamity!  And I am not fooled by the statistics and analysis applied by endless think tanks and national statistical surveys. By simple application of mathematics to these “statistics”, it is clear to me what is happening.  One statistic gives it all away.  The current average age of a bride is 34 years of age.  Her parents came from the generation when the average age of grooms was 27, and brides were 24. That happens to be my baby boom, affluent, 80s and 90s wealthy generation…..you know, the generation that has spoilt it for the rest of the population, allegedly. 


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