Innovative start-ups, government funding and collaboration
How the UK’s sustainable jet fuel economy is taking shape
Although aviation in its totality makes up only about 2 to 3 per cent of transportation’s enormous greenhouse gas emissions, its pollution figure – 285g of CO2 per passenger per kilometre – is the highest among all modes of transport. Considering how common air travel has become, and most probably will remain despite the current difficulties it’s facing, slashing its carbon footprint is key to meeting Net Zero targets globally.
Thankfully, we already have tried and tested strains of sustainable aviation fuel, or SAF, produced with both biological and non-biological resources including cooking and plant oil, agricultural and forestry residues, CO2 and municipal waste. The good thing about SAF is that, being almost identical to jet fuel, it’s compatible with existing aircraft and fuelling infrastructure and therefore can be added to it as “drop in” fuel. Currently, the maximum allowed blending ratio is 50 per cent and there are at least seven different certified pathways to manufacturing SAF, with new ones emerging daily.
One criteria for a new method to certify is that it must be indeed sustainable: its manufacturing must not require any deforestation, land use change, competition with other crops or large amounts of freshwater.
And this needs to hold true for the whole production lifecycle too, from feedstock growth and transport to processing to refining. The EU, for example, has recently banned the use of palm oil by-products for feedstock for SAF for sustainability reasons.
Can the UK become a leading SAF supplier?
The method relying on hydro-processed esters and fatty acids (HEFTA) is at present the most established and straightforward method of SAF manufacturing. Flights powered by aviation fuel deriving from Jathropa, a tropical plant rich in oil, already operated as early as 2013.
But in February 2021 the first airplane running partly on synthetic kerosene produced via a more complex manufacturing process than HEFTA made its landmark first flight.
Although the market is already dominated by big players such as NESTE and Phillips 66, both already supplying British airports with sustainable fuel, thanks to the gigantic volumes required by the sector to reach Net Zero in 2050, there is ample room for upcoming innovators to fledge and thrive.
Having identified this opportunity, the UK government’s Jet Zero Council launched its £15 million Green Fuels, Green Skies (GSGF) competition to support the early-stage development of UK SAF plants. Out of the eight shortlisted companies, four – ABSL, Nova Pangaea, Velocys and Green Fuels – are UK-based.
The feedstocks and technologies they use varies widely. What they have in common, though, is the propensity for innovation and the ownership of proprietary technologies that they both license and deploy in their own plants.
Green Fuels, although established on the market, set up an R&D facility more recently. It has been running joint projects across the globe, from India and Brazil to Oman. What makes Green Fuels stand out is the SAF feedstock – sewage sludge – it will use in its demonstrator plant being built in Berkeley, Gloucestershire.
The company is also exploring opportunities in dairy and brewery waste as SAF feedstock, and is engaged in developing sustainable marine fuel too.
Velocys was created by merging spinouts of Oxford University and the Pacific Northwest National Laboratory (PNNL) in the US.
Its Altato plant, to be built in collaboration with British Airways in Immingham, Lincolnshire, will produce kerosene synthetised from end-of-life plastics, household and office waste, leveraging carbon capture and storage (CCS) and proprietary technology.
Velocys received £2.4 million from the GFGS project and has raised equity capital from BA and Shell.
Teesside-based Nova Pangea, meanwhile, specialises in recycling carbon from wood waste and converting it into sugars, which, in turn, are fermented into bioethanol, using Nova Pangea’s proprietary REFNOVA technology.
The company is pursuing a joint project with BA and Chicago-based LanzaJet called Speedbird, where the technology of the American start-ups and PNNL’s industrial partner is used to convert bioethanol into synthetic kerosene. Once operational, the plant is set to power 2,000 British Airways flights from London to New York on the airline’s Airbus A350 aircraft.
The youngest start-up among the UK GSGF winners, ABSL (Advanced Biofuel Solutions Ltd), will work with a British refinery and a British engineering company on a design for a new facility in Cheshire. The plant will use the company’s proprietary RadGas technology, which combines low-carbon biofuel production from waste with carbon capture to produce crude oil, which then can be upgraded into SAF.
As the examples above show, these innovative SAF production methods demonstrate characteristics of circularity. And by integrating waste – either organic or unrecyclable plastic – into the manufacturing process, as well as carbon capturing, several are carbon negative.
Most of the SAF plants funded by the government’s GFGS project are expected to start production in 2025, five years before the mooted regulation mandating airlines to blend a minimum of 10 per cent SAF into their jet fuel is due to kick in. It will rise further, to an ambitious 75 per cent, by 2050.
The strategic initiative to decrease aviation’s carbon footprint by combining legislation and funding is laudable and, if the demonstration plants prove successful, scalable and replicable, it may become a cornerstone of turning the UK into a market-leading SAF producer in the medium turn.
To read about British businesses excelling at Carbon Capture and Utilisation (CCS), click here
Zita Goldman
Market research is essential for entrepreneurs who want their businesses to succeed
According to the U.S. research and consulting firm CB Insights, most entrepreneurs fail because they lack sufficient financing. The second reason they fail is because the market for their product is too small.
Yet many entrepreneurs and coaching professionals continue to reject the market research phase in favour of a “fail fast, pivot quickly” approach. Launching companies this way — even if it means having to adapt to customer feedback later — is very trendy, especially in the world of startups.
However, as the bitter experience of Canadian entrepreneur Tom Zaragoza demonstrates, “learning by doing” is no guarantee that a business will gain traction in the marketplace. In 2017, after months of effort, Zaragoza launched his site Gymlisted to connect private gyms with users, only to find out that there was no demand for such a service.
Through my activities as a professor in entrepreneurial marketing, I unfortunately meet an increasing number of entrepreneurs who are convinced they have the idea of the century, but who do not take time to study the market in a structured way. Market research remains an essential step for entrepreneurs for the simple reason that if the owner is not a market expert, who is?
Two misconceptions about market research
Contrary to the story about the intuitive and visionary entrepreneur, and in a context where modern society applauds action over reflection, it turns out that market research is both essential and relevant — as long as two misconceptions that work against its adoption are removed.
First misconception: Market research is a linear and rational process that is not compatible with a company’s launch phase.
In reality, it is a set of methods and tools, the goal of which is to create a continuous learning loop by alternating phases of reflection with phases of experimentation. Whatever the size of the company, the approach is much more iterative (achieved through repetition), inductive and diversified than one might think.
As demonstrated by the “disciplined approach” proposed by Bill Aulet, a professor at MIT, it is actually possible to study a market in a way that is structured and agile. The 24-step process starts with the study of the market fundamentals, an essential first step to understand the market structure and, above all, the different customer segments. Once the target customer is identified, the process unfolds by moving back and forth frequently between research and field studies.
Second misconception: Market research is simply about having large samples answer questionnaires.
The truth is, surveys are not a substitute for market research. Contrary to what some business sites advise, a good survey involves using complex methods that require specialized knowledge. The use of free online solutions, such as Google Forms, by inexperienced entrepreneurs often produces biased results that may not be very useful.
In view of these two misconceptions, it would be more appropriate to use the term “market intelligence,” which better translates the two key steps of a pragmatic and agile process adapted to the context of creation.
The two key steps to develop good market intelligence
Step 1: Do secondary market research to know your market
Secondary market research involves exploiting all existing knowledge.
A quick and efficient way to do this is to contact organizations such as professional associations, sector committees or even chambers of commerce. These institutions have the mission of collecting, synthesizing and making accessible relevant and credible information on a given sector or market, often at a very reasonable cost.
This approach allows entrepreneurs to quickly acquire the knowledge they need to start structuring the first hypotheses of their business model: What are the different customer profiles? What are their expectations and buying habits? What are the competing offers already on the market?
Step 2: Conduct qualitative studies to validate and adjust your business model.
The next step involves testing and exploring the marketplace on the ground by using qualitative methods. This type of study takes the form of individual or group interviews, or even simple observations, and makes it possible to deepen the hypotheses put forward following the research phase by directly interviewing those in the field.
Take the example of the UNIQ Hotel, an “ephemeral” accommodation launched in 2020.
Initially, studying the reports of the Tourism Intelligence Network of the Transat Chair of Tourism at the Université du Québec à Montreal and those of Camping Québec showed that this product might interest those who liked “glamping” and wanted both nature and comfort. Indeed, UNIQ offers yurts that can be set up and dismantled in different locations.
During the second phase, it makes sense to do individual or group interviews to understand the customer, their habits, their expectations and any possible obstacles.
This exploration phase makes it possible to understand which services are essential and which booking methods are commonly used.
This type of qualitative research would be an important step in completing the value proposition design, a tool that helps illustrate why the idea will meet the market’s expectations. The information also makes it possible to draw up a precise profile of the expected clientele using a “buyer persona,” a method for summarizing the main characteristics of future buyers.
Once this exploration phase is complete, one can wrap up with a test to ensure that there is demand for this type of accommodation. This can be done by applying concept testing. This simple and inexpensive process consists of submitting a printed or video description of the proposal to the target clientele to study their reactions and their level of intention to make a purchase.
These few good practices do not cover everything, and not all market research methods are applied to every creative context. But as many scientific studies have shown, knowing your market is a key factor of success for any company.
Philippe Massiera, Professeur agrégé en Marketing Management, Université du Québec à Montréal (UQAM)
This article is republished from The Conversation under a Creative Commons license. Read the original article.
Women are still less likely to aspire to leadership in business, despite decades of gender initiatives – we need to find out why
The gender gap in pay, positions and even pensions for working women is well-established, but research shows that a gender aspiration gap has also emerged in recent years. This is when women do not aspire to rise through the ranks in the same way as men do, and it could affect efforts to encourage more women to apply for leadership roles at work.
The global drive to increase social equality in recent years has been led by ongoing research about how women are underrepresented in leadership roles throughout the business world. For example, recent research shows that while the share of women in senior management roles is increasing incrementally, the “leaky pipeline” effect means that fewer women reach the highest positions in companies.
This situation has compelled policy makers and business leaders to create diversity initiatives in an attempt to tip the balance. Afterall, research shows evidence of better financial performance among organisations with more women occupying senior roles, as well as the wider economic benefits of ensuring women can achieve their full economic potential.
These initiatives tend to focus on eliminating bias and are aimed at various stages – from recruitment to promotion. Some companies also design flexible work options such as the ability to work remotely. Creating a culture of inclusion and support can also help, for example, by implementing mentorship and advocacy programmes.
The goal of increasing women’s participation in leadership is undeniably well-intentioned. But when implementing these diversity initiatives, business leaders need to think about whether women even want to be in these leadership roles.
At the moment, many women actually do not aspire to be leaders, according to research I completed with Leah Sheppard of Washington State University and Tatiana Balushkina from the University of Milan-Bicocca. Our meta-analysis of research comparing men’s and women’s aspirations for leadership and managerial roles shows men are significantly more likely to aspire to leadership roles than women. We looked at six decades of research with a final sample of more than 138,000 US participants. We also created a simulation based on these results, which revealed that, in a company with eight hierarchical levels, the gender difference in leadership aspirations translates into having 2.13 men for every woman at the highest organisational level.
The difference in aspirations emerges around college age, according to our research. This is a time when many people gain their first taste of working life, through an internship or summer job for example. We also found that industry matters. The gender aspiration gap can certainly be seen in female-dominated fields such as nursing and education, but it is much larger in more mixed and male-dominated fields, such as politics and business.
Even as the number of diversity initiatives has increased, especially in the last decade, our meta-analysis shows the gender difference in leadership aspirations has remained the same over the past 60 years. This could suggest that, either current diversity initiatives do not address women’s concerns around these roles, or that the initiatives are too general and need to be more tailored to women’s specific needs.
Making it work
Our research indicates that company diversity initiatives are not working. So, business leaders and managers must do a better job of factoring women’s actual aspirations into the development of these initiatives. A good start would be to try to understand the specific reasons behind female employees’ lower aspirations, especially in male-dominated environments.
Although we were not able to test an explanation for the aspiration gap, we believe that it may have to do with the process of “self-stereotyping”. This is when individuals internalise gender stereotypes, voluntarily conforming to gender norms. For women, this can mean internalising a more communal stereotype, which leads them to view themselves as less similar to a leader. Unsurprisingly, such women do not tend to aspire to leadership positions. Men, on the other hand, may internalise the masculine “agentic” stereotype, which makes them think they can have greater control over themselves and others – this also aligns with the stereotypical idea people often have of leaders.
Of course, other explanations are possible. This could include women having more negative experiences in the workplace such as bias and discrimination, which puts them off aspiring to leadership roles. It is also possible that women are concerned that accepting a leadership position and the responsibility that comes might negatively affect their family lives. For example, women often hold more power when it comes to decision making at home – so much so, that they have less interest in gaining workplace power.
Any attempt to bolster women should start with specific and targeted interventions such as developing mentorship schemes or highlighting role models. Organisations should also focus on women who exhibit leadership potential early in their careers and provide them with useful resources and support to progress upwards through the organisation. Our results suggest that interventions aimed at increasing women’s leadership aspirations should ideally occur before or during college. Women at this stage in their careers might especially benefit from having the opportunity to see and interact with women that already occupy leadership roles.
It is possible to create gender diversity initiatives that will do more to increase the number of women reaching the upper echelons of business. And making space for more women to move into leadership positions is not only fair, it could also have a positive impact on company performance.
Ekaterina Netchaeva, Assistant Professor, Bocconi University
This article is republished from The Conversation under a Creative Commons license. Read the original article.
Red Paddle Co is the leading stand up paddle board company
Since 2008 Red Paddle Co has been designing and building high-quality paddle boards, sold in more than 50 countries
Started by John Hibbard, Red Paddle Co set out with a clear mission to challenge the status quo in the emerging sport of stand up paddle boarding (SUP). Before then, the vast majority of boards were produced using glass fibre resins and foam. These “hard boards” were prone to damage, hard to transport and store and were hampering the adoption of the sport. There were a couple of inflatable boards on the market which, although they solved the transport and storage issue, had poor on-water performance. They flexed badly and were prone to leaks. John set out on a mission to change this.
The team at Red Paddle Co believed that riding an inflatable board shouldn’t mean you have to compromise on performance or quality, so they set about designing and building boards that performed as well as their hard board cousins. On many occasions progression was hampered by the availability of quality components so the team started a process of designing materials and parts from scratch to deliver on their mission.
Next came the importance of building a brand that could communicate its USPs and attract a global consumer. Within three years Red Paddle Co boards were being sold in 10 countries. This has grown to over 50 countries and more than 2000 independent retailers and activity providers across the world. A strategy of continued innovation has seen Red Paddle Co register a number of patents as well as developing industry-leading processes and materials. These have taken inflatable technology to the forefront of the industry, to the point that inflatable boards are now the dominant technology, almost completely replacing the hard board materials of 15 years ago.
By summer 2017 Red Paddle Co had a highly engaged base of customers that were asking for more products from the brand they loved and trusted. In the spring of 2018 Red Original was born. Red Original took the founding principles of Red Paddle Co to never compromise on performance, looks and quality, and launched a range of active lifestyle accessories to meet the demands of its passionate customer base. Standout products such as changing robes, waterproof bags and SUP safety equipment have propelled Red Original to become a leading provider of these products. Stocked by the likes of John Lewis and Ellis Brigham, the Red Original brand goes from strength to strength.
The business is headquartered in South Devon, UK, close to some of the country’s best beaches and rivers – a perfect testing ground for its products. The head office is home to a team of 40 people working across design, logistics, sales, marketing and customer service, with further staff based in Europe and Australia overseeing the brand’s activities in these regions. There is a clear ESG focus within the business. Earlier this year Red Paddle Co completed its B-Corp application. It is focused on a continuous “Taking Steps” strategy to improve its global impact, and is also working towards a Net Zero status. A design-for-disassembly approach to product development aims to keep Red Paddle Co products serviceable for years to come by allowing customers to replace component parts when necessary.
Red Paddle Co grew out of a passion for watersports and high-quality equipment and service. This passion runs through the business to this day, with all employees taking an active part in the culture and future of the business. Red Paddle Co is set to continue to innovate it’s products and service in the years to come, inspiring adventures the world over.
Inspiring adventures the world over: red-equipment.co.uk
By Robyn Dawson, Marketing, Communications & PR Manager, Red Paddle Co
INDUSTRY VIEW FROM RED PADDLE CO
The end of physical retail? Not if you make it personal
The demise of physical retail has dominated debate to the point that it’s almost become a self-fulfilling prophecy. The universally accepted mantra is that good old retail has had its day, usurped by online – the (relatively) new kid on the shopping block.
We’ve all become so caught up in this negativity – exacerbated by the past two years of global disruption – while digital retail has exploded, quicker and more powerfully than anyone predicted. Disruption is nothing new in retail, but this is different, with digital adoption strategies accelerating to deliver a transformation which, without the pandemic, may have taken a decade.
Change first, then you will survive – and prosper
Ask yourself, has this acceleration simply shifted your focus rather than shaped your company’s overall vision? Despite significant increase in investment in e-commerce, it hasn’t fundamentally changed retail. Convenience, choice, a more tailored experience and the safety of online shopping have meant far fewer people visiting physical stores – evidence of a diminishing sense of loyalty. Your customers have changed irrevocably, and so you too must change.
Data from Purple’s recent research project – covering 1,500 shoppers across groceries, fashion and apparel and big box retailers with mature online and physical shopping operations in the UK, US and Mexico – confirms that 75 per cent of us still have a foot firmly planted in each camp. Shoppers remain optimistic about the future of physical retail and want it to survive, with 60 per cent of our sample unable to envisage a future where fashion retail disappears. Among grocery retailers, 40 per cent of customers doubt this sector will transfer completely online.
Retail is not wasted on the young
Young shoppers make instant judgments about your brand – on your fit with their lifestyles, values and interests and the quality of the overall shopping experience. They expect an experience closely mirroring their online activity, aligned with sustainability – reflecting the burgeoning impact of climate change, social justice and inclusivity. Data confirms the importance of these “soft experiential discriminators”.
Understanding who your shoppers are, and curating bespoke marketing initiatives, including targeted programmes, promotions and personalised experiences based on real customer service rather than an algorithm, are key to driving loyalty. With 97 per cent of our survey respondents stating that retailers can improve their loyalty to the brand, and 83.5 per cent saying that some sort of personalisation or targeting would make them more loyal, the opportunity is clear.
Retail pessimism? That’s so pre-pandemic!
Let’s be positive about the future. Our data reveals more than 40 per cent of customers have shopped in a physical store more than 30 times in the past year. Online still has some way to go to challenge traditional brick store footfall.
Physical retail remains the go-to for regular shoppers. Globally retailers saw a 7 per cent increase in footfall and a 48 per cent increase in customer return rates, in a comparison from before the start of the pandemic to after. And only physical stores can turn the purchase journey into a purchase adventure.
The pandemic has prefaced a series of extraordinary events, from crippled supply chains to generational inflation and the impact of the Ukraine conflict. It’s difficult for retailers to completely change their direction under these conditions. However, evidence suggests that the fallout from these events is making it ever more important to seize your opportunity before it’s too late.
Make your stores as exciting, engaging and personalised as possible. The winners will be those who build the most rewarding customer experience.
It’s not physical. It’s not digital…
Stop viewing the current digital acceleration as a threat and start viewing it as a once-in-a-lifetime opportunity to transform your retail strategy. It’s a complex hybrid. Adopt a unified approach that aligns with forever changed customer expectations to create a new, profitable omnichannel future. Integrate physical retail with online data collection, providing a new seamless shopping experience where the combination of online and offline drives even higher levels of customer satisfaction and revenues.
Data drives personalisation, drives loyalty
Data-driven personalisation builds loyalty. More than 60 per cent of people we spoke to confirmed improved loyalty to retailers who offered personalised experiences, sent them tailored promotions while shopping in store, and who demonstrated they understood their specific needs. Consumers want their shopping adventures to be supported and educated by online. They expect to be engaged, surprised and delighted by the immediate, the responsive and, most of all, the personal in their physical environments too.
Everything relies upon getting access to customer data while they shop, by finding a smarter and faster way to understand their behaviours. That means building your future business on an evolving selection of key physical fulfilment “showroom” environments, given relevance by a curated, highly personalised and immersive experience that delivers in-venue online connectivity.
Far-sighted retailers and customers get engaged
Purple helps retailers replicate, then exceed, the knowledge-gathering potential of online connection in their physical locations. Far-sighted retailers and consumers alike believe that building engagement by improving the overall in-store experience is one of the best opportunities to revolutionise the appeal of physical retail and increase revenue.
By transforming stores into intelligent spaces, there’s a huge untapped opportunity to encourage even more visitors to log into your free Wi-Fi and benefit from the data. Venues with embedded smart technology are better able to understand who their customers are, how they behave in store, and what can best turn passive browsers into active, engaged buyers. Intelligent spaces deliver opportunities for service excellence and more rewarding experiences for shoppers and visitors – and they can do all of this while generating additional ROI.
Analytics in the real world
Our technology integrates sophisticated free-at-point-of-use Wi-Fi into stores, making it possible to monitor and manage traffic flow, occupancy and dwell duration. All can be viewed in real time to deliver considerable ROI possibilities, and drive repeat visits from shoppers keen to join loyalty programmes promising tailored, personalised promotions and rewards.
You don’t ever have to lose contact with a customer just because they leave your store. And you can seamlessly re-engage with them when they visit you online too. It’s a relationship that’s crucial in creating an exciting future for you and your physical stores.
Start creating your own personalised retail future – read our new white paper.
Since 2012, Purple has been championing the creation of intelligent spaces with its innovative Wi-Fi solutions for retail and other high-footfall venues globally.
Wherever you are on your retail transformation journey, Purple can help you deliver the most engaging, most insight-filled retail experiences, and use data to drive significant ROI improvements across your retail estate.
INDUSTRY VIEW FROM PURPLE
Haiken’s new showroom to furnish the workplace of the future
Haiken is on a mission to change the way people think about office furniture – starting with its newly redesigned showroom
Haiken is a fresh face on the London office furniture scene, and its newly redesigned showroom now showcases its wide range of design-led, flexible office furniture products in an inspiring setting – including new furniture ranges.
The refreshed showroom now includes a new soft and outdoor seating range. Enabling workspaces that support a hybrid model is a priority for many businesses today. Haiken’s showroom exhibits new designs that reflect a more contemporary, collaborative place of work, such as the Wright co-work desk. The workplace of tomorrow has different needs, something Haiken positively reflects with each of its new furniture additions.
A new soft and outdoor seating range will make its way into the refreshed showroom, alongside Haiken’s latest approach to a height-adjustable desk. Haiken recognises the utmost importance of health and wellbeing in the workplace and aims to make a positive impact with its new furniture additions.
“We’re extremely excited to have taken this next step as a business,” says Haiken’s Managing Director Craig Gulley.
“Having our showroom refurbished was a vital part in showcasing how our office furniture has been able to adapt to the needs of the modern workforce and create stimulating work environments.”
Haiken has introduced modern solutions to age-old challenges, such as its ergonomics-focussed Flexure range of desks. Height-adjustable desks can help prevent back problems and improve circulation. This new introduction to the Haiken range includes a telescopic frame, making it future-proof for a changing workforce. Flexure appears alongside Haiken’s variety of task seating that is fully adjustable and offers incomparable user comfort.
Haiken is introducing a complete outdoor furniture range to help today’s workforce reconnect with nature
Today’s work isn’t something that happens exclusively indoors. Haiken’s new outdoor furniture range gives employees the option to reconnect with nature at work, benefiting their wellbeing as well as their productivity. The health and psychological benefits of spending time outdoors have long been apparent. And from bringing a little piece of the natural world into the office in the form of a potted plant, to actually working outside, workplaces are seeing the positive impact this can have on their employees.
Haiken in collaboration with Synergy and Maxwood Commercial Washrooms
To support its ongoing mission to create inspiring workplaces built for the future, Haiken has teamed up with new partners, including lighting design firm Synergy, who will put the showroom in its best light, and Maxwood Commercial Washrooms, who bring their washrooms to the Haiken showroom. By partnering with inspiring companies such as these, Haiken offers a showroom covering all aspects of an inspiring workspaces and shape the way offices are seen.
“As well as offering a design-led backdrop for Haiken’s furniture, the new-look showroom features lounge areas for visitors to consider their own designs,” said the project’s lead interior designer, Simeon Thompson from JSJ Design. “We’ve created pockets of visual interest using light and incorporated nods to biophilic design with natural materials, planting and a living wall. The overall feel is a calm, creative space.”
Alongside these new partners, the showroom includes plenty of established favourites, such as award-winning furniture designer NOTI. NOTI creates furniture using products, services and technologies that reduce environmental impact, using less energy and fewer raw materials – values that reflect Haiken’s own.
Haiken also showcases products by Zilenzio, experts in creating healthy acoustic surroundings by employing an innovative and elegant approach to sound absorption. Zilenzio is committed to quality and sustainability: it uses products such as stone wool, which is made from natural stone and contains no plastic or dangerous substances, as well as FSC certified wood sourced from responsibly managed forests.
Collaborating with partners to stay at the forefront of sustainable design
Like its partners, Haiken itself is building a focus on sustainability into the materials its products use. Some of the new furniture range uses Fenix materials: anti-fingerprint surfaces that allow micro-scratches to be thermally repairable, giving the material a longer lifespan. Fenix is now carbon neutral, and with sustainability core to Haiken’s values, teaming up with businesses with a similar ethos helps us set high standards and stay at the forefront of sustainable design.
Alongside its office furniture, Haiken has introduced smart storage solutions with built-in technology from LoQit: the Brunel smart lockers The state-of-the-art smart locker system is easy to use and provides workers with their own smart locker to hold their personal belongings and charge their mobile phone, and is quick and easy for administrators to use.
Brunel’s smart locker storage solution makes anything from locker management software to cloud management and system integration possible. Smart technology such as this is perfect for workspaces that are changing to a more hybrid working model, as the smart lockers are flexible and provide an easy-to-use space to store items.
Haiken’s new showroom provides a platform to showcase office furniture in an inspiring setting. To find out more, visit www.haiken.com/showroom.
INDUSTRY VIEW FROM HAIKEN
Inflation: there’s a vital way to reduce it that everyone overlooks – raise productivity
Inflation has become one of the great issues of our times. The UK’s is the highest in the G7, weighing in at 9 per cent a year according to the most recent figures on consumer price inflation.
When you look at the other common measure for prices, retail price inflation, which adds mortgage rates into the equation and is also calculated a little differently, it is even higher at 11 per cent. This is important because RPI is used for raising prices across a range of items, from train tickets and mobile phone contracts to student loans.
The question of why inflation is so high is well rehearsed. The initial impetus came from greater demand, but it is being further fuelled by supply issues.
What caused high inflation
On the demand side, quantitative easing (QE) during the pandemic – in which central banks “created money” to help prop up the economy – has increased the amount of money in the system by over 20 per cent.
When lockdown ended, this helped to ensure that there was pent-up demand for goods and services: retail sales rose by over 20 per cent year on year in May 2021, for instance, and hit another peak of nearly 10 per cent in January 2022. At the same time, demand from firms helped to drive huge price increases in key industrial commodities such as copper and steel. Also, oil prices rose by approximately 67 per cent in 2021 and another 20 per cent in 2022 to date.
Heightened demand has collided with constraints on the global supply chain from social distancing, self-isolation rules and renewed lockdowns in China (even the Ever Given getting stuck). As a result, the cost of shipping goods is around 35 per cent higher than the pre-pandemic high (and over 700 per cent higher than its low). And all of this is before discussing the war in Ukraine.
The response by the Bank of England has been to increase the headline rate of interest from 0.1 per cent to 1 per cent, and to stop QE. Tightening monetary policy affects demand as the interest due on many debt repayments is rising and the cost of borrowing is going up. As a result, the GfK UK consumer confidence index is sitting at -40, a historically low level (when the number is positive, it means consumer confidence is high).
This combination of higher interest rates and higher prices has increased the likelihood of a recession. In part, this is because increasing interest rates discourages businesses from investing. But there’s also another problem with discouraging investment: it’s part of the long-term solution to our inflation problem.
Productivity and investment
This is linked to the UK’s long-term problem with productivity: in other words, how much each worker produces. The UK productivity rate is growing, which you would expect as technology brings improvements, but the growth is less than that of key international competitors like the US, Germany and France.
While the rate of growth has returned to pre-pandemic levels after plunging during the lockdowns, it is still slower than in the years before the global financial crisis of 2007-09. A PwC report from 2019 highlights that annual growth in UK productivity was 2 per cent for the ten years to 2008 and 0.6 per cent for the ten years after, with a productivity gap of approximately 10 per cent to Germany and over 30 per cent to the US.
Why does productivity matter for inflation? When a workforce is more productive it produces more goods and services, and at a lower cost per unit. This means there is a greater supply of these things, which puts downward pressure on prices and is therefore associated with lower inflation.
How do we raise productivity? One important way is to invest more, but this has been a weakness in the UK. Business investment plateaued in 2016 following the Brexit referendum, fell with COVID-19 and remains almost 10 per cent below the 2019 level. The nation’s investment spending as a proportion of GDP (16.7 per cent) compares poorly with the US (22.5 per cent), Japan (25 per cent) and the EU (24.3 per cent). This is despite evidence that UK companies are holding £140 billion in cash and have a backlog of accumulated projects.
What can be done
The question is how to encourage firms to release this investment potential. The government is planning to increase headline corporation tax from 19 per cent to 25 per cent in 2023, which is not going to help and should arguably be scrapped. To further incentivise investment, there’s also a need for more generous rules around tax relief, including extending the “super-deduction” that was brought in two years ago, which can reduce companies’ tax bills by 25 per cent.
As well as encouraging companies to invest and expand, the government needs to incentivise people to start new companies. For example, the UK has lost three-quarters of a million self-employed workers since February 2020.
To encourage more start-ups, the UK government, the devolved administrations and councils need to come together to develop strategic plans for different regions. This includes making better use of universities as local hubs for expertise and developing clusters of similar firms based on local specialisms that can help one another by sharing equipment and collaborating. Plans exist, but need to be actioned; levelling up must be more than a catchy slogan.
Public investment has to be part of the picture. This especially includes education, both at school, where upgraded facilities are required to ensure that young people are fully trained in the latest technology; and for over-18s, with a clearer balance between university and apprenticeship training.
Getting east to west is about to become substantially easier in London thanks to Crossrail, but remains tortuous elsewhere, whether from Leeds to Manchester or Edinburgh to Glasgow. Quicker transport links improve the mobility of goods and labour, while truly upgrading internet connections (full fibre and 5G) improves links when travel isn’t necessary. Both improve productivity.
Inevitably, these kinds of interventions involve further spending. But this has to be viewed as a long-term solution. After WWII, government debt was well over 200 per cent of GDP and took 50 years to be paid off. The same time scale can be considered now.
UK Chancellor Rishi Sunak has been talking a lot about the need to unlock investment and raise productivity, but there is still very little detail about what the government intends to do. There are lots of economic benefits to raising productivity, but bringing down inflation is the one that everyone seems to have missed.
David McMillan, Professor in Finance, University of Stirling
This article is republished from The Conversation under a Creative Commons license. Read the original article.