JUNE 1996 Edition
INNOVATION
At present, innovation is heavily concentrated in rich
economies which account for 96 per cent of total world R&D spending. This
reflects the fact that developed nations can afford to spend more on innovation
which, in turn, boosts future income and thus finances more research. Poorer
countries with a plentiful supply of less skilled labour have tended to focus
on basic manufacturing copying western techniques, but this is changing. Some
Asian economies are fast becoming innovators. South Korea and Taiwan already
spend as much on R&D, as a proportion of their GDP, as many European
economies and the results are beginning to show. Taiwan now registers more
patents in the U.S. (per head of population) than Britain does.
WEB SITE
Public and private-sector communities engaged in health,
international trade and export activities now have immediate access to a
service that could better their business. It's the new Web site of The
International Affairs Directorate (IAD) of Health Canada. Exporters of health
care products and services will be interested particularly in the services
provided by the Coordinator for Health Exports Promotion and Assistance. Also
on the site are links to other health-related sites, trade-related sites and a
listing of international conferences on health. The address of the site is:
http://hpb1.hwc.ca/datapcb/iad/iadtitle.htm.
CEREALS
Cereal makers are paying hefty prices for grain while
facing competitive pressures to lower retail prices. The result is a profit
squeeze in the more than $8 billion-a-year (US) cereal industry. Consumers may
benefit, but manufacturers, especially smaller ones, are likely to feel the
pinch. While cereal companies do not pay spot prices for grain which recently
hit record levels, long term contracts are rising. Though grain costs are a
small fraction of the overall cost of making a box of cereal-- advertising and
promotion account for the largest chunk--soaring grain prices hurt profits.
Because of intense
competition, U.S. cereal companies will not be able to pass on higher grain
costs by raising their prices as they have in the past, in fact prices may even
decline.
TRENDS
Change is sweeping the world of sports and hobbies and
few people or organizations are taking advantage of it. According to Statistics
Canada, people aged 55 or more average an hour a day on sports and hobbies,
while those under 55 spend half that time. From 1921 until the late 1970s,
people aged 15 to 35 accounted for more than half the time spent on sports and
hobbies, today their share is less than 40 per cent. In contrast, people aged
55 and older represented less than 30 percent of sports and hobby time. By
2021, this portion of society will account for over 50 per cent. This has
serious implications for municipal recreation departments as older joggers,
cyclists, tennis players, swimmers and volleyball players seek places to
exercise.
DECISIVENESS
Headline from the business section of a recent edition of
a Baltimore newspaper: "Stocks will rise or fall, or rise then fall,
or fall then rise or fall and fall."
E-MAIL
According to BugNet, an on-line service based in
Bellingham, Washington, ink-on-paper mail is a lot more reliable than E-mail.
This year, the number of E-mails sent will surpass the 85 billion paper letters
sent worldwide. In a head-to-head competition with the U.S. post office, BugNet
sent 500 messages to E-mail addresses it had determined were good and current
and 500 letters to current postal addresses through U.S. mail. It found that
E-mail's failure rate was about three times higher than first class mail.
Seventeen E-mail messages were returned as undeliverable as against six sent
through the mail.
MOVIES
A landmark labour agreement for the B.C. film industry
will generate up to $200 million for the B.C. economy in the next year. In the
past, producers considering B.C. have had to negotiate each film separately
with an unpredictable outcome. Most B.C. competitors such as North Carolina,
Toronto and Los Angeles either already have master agreements or costs are
predictable.
ACQUISITIONS
Foreign purchases of U.S. companies--led by Canadian and
Japanese buyers seeking to expand in the U.S. retail and consumer products
markets--almost doubled to $26.6 billion in the first quarter of 1996. Foreign
buyers paid an average of $114 million in 233 deals. Conversely, U.S. companies
spent $8.4 billion on acquiring foreign companies, an increase of about six per
cent over the same period last year. Canadian companies were the most active
buyers spending almost $10 billion in 65 deals. Japanese companies were second,
more than doubling their spending to $4.6 billion with Britain third at $4.3
billion.
BANKING
Canada's first aboriginal bank, which will tap into more
than $5 billion in assets which flow through First Nations, will open in the
summer. The bank is considered a breakthrough for the economic development of
First Nations as banking and the ability to obtain loans is considered critical
for self-government. Initially, the bank will deal only with businesses and
band councils. Its eventual goal is to operate branches in urban centres and
Indian communities across Canada.
SERVICES
In 1994, world exports of commercial services (transport,
travel, banking and insurance) rose by 8 per cent to $1.1 trillion, 26 per cent
of all world exports. Meanwhile, exports of merchandise goods grew by 13 per
cent, helping total world exports to increase by 12 per cent to $5.2 trillion.
The U.S. is the world's biggest exporter of services, selling $178 billion
worth in 1994, almost 17 per cent of the world's total. Canada's export of
services was 1.7 per cent of the world's total.
MONOPOLIES
The Government of Canada seems to believe that the oil
companies are conspiring to defraud consumers through price fixing by a secret
gasoline cartel and the industry is now under investigation by the Bureau of
Competition Policy over complaints it is violating the Competition Act. The
message: Monopolies are bad.
Meanwhile, some Manitoba farmers have been charged by
Ottawa with illegally exporting western grain into the U.S, where the demand is
high and prices better than those offered by the Wheat Board. However, by law,
the Canadian Wheat Board is the only one which can ship grain out of the
country. Its monopoly on Western Canadian wheat, barley and oats for human
consumption or export leaves farmers with few options. The message: Monopolies
are good.
LABOUR
Canadian companies are winning extended periods of labour
peace as many unions agree to contracts that are longer than ever before.
Figures released show the average length of agreements reached 40.3 months in
the first quarter of 1996, the highest on record. That compares with an average
low of 17.2 months set in the midst of the 1981-82 recession. Some recent
management-labour deals are running to five and six years, particularly in the
resource-based industries.
TECHNOLOGY
New Mexico's Monastery of Christ in the Desert is
on-line, when its Benedictine monks can get their phones to work. There are no
electrical lines to the Monastery in the Santa Fe National Forest. The monks
use cellular phones powered by solar energy.
MANITOBA
Manitoba Telephone System plans to test a new electronic
set-top device that connects a television to the global Internet via an
ordinary telephone line. The appliance-like product, dubbed InBox, represents
the latest branch of consumer electronics. Proponents of on-line access via TV
believe consumers will flock to a device that eliminates the need to buy costly
(as much as $3000) and complex personal computers in order to connect to the
global World Wide Web. Sceptics question the utility of a $500 device that
can't do much more than provide access to the Internet. The InBox device
contains a computer processor, modem and Netscape browser software and is
operated by a cordless infrared remote device. However, users will need to buy
a keyboard if they wish to send E-mail messages.
MINING
Political uncertainty in B.C. and concern about the
environmental lobby, is causing many Canadian mining companies to use Santiago,
Chile as a regional headquarters for expanding into other Latin American
countries. Canadian companies in Chile led by major mining producers from
Vancouver and Toronto, have committed to spending a total of $4.5 billion in
the Andean nation since 1991. The relatively small, but lucrative Canadian
mining services industry, is expected to provide $100 million this year alone
in exports to Chile, or almost 15 per cent of the mining machinery market in
Chile, compared with 5 per cent in 1992.
COMPETITIVENESS
Annually, the Swiss-based International Institute for
Management Development measures and compares competitiveness of 46 countries in
terms of the mechanisms that help create wealth. They use 230 criteria covering
economic strength, technology, financial services, international trade,
government policies, management, infrastructure and educational skills. In the
latest study, the United States leads the world, followed by Singapore, Hong
Kong and Japan. Canada was ranked 12th, after New Zealand and before Chile.
Britain and France were 19th and 20th.
CHINA
While China still captivates Canadian businesses, the
Conference Board of Canada found that it has yet to prove profitable for many.
A recent survey showed that less than half of Canadian companies responding
that invested in China in the last five years have made money on their
investments. Of twenty businesses, just eight, or 40 per cent, said they made a
profit. Twelve said their investments were not profitable and three said their
investments were "highly unprofitable."
THE WEST
In March and April, for the first time in Canadian
history, there were more jobs in the provinces west of Ontario than there were
in the provinces to its east. In the past six years, 345,000, or 87 per cent of
the net gain of 443,000 new jobs created in Canada were created in the two
western provinces. This is remarkable considering that British Columbia and
Alberta are home to only 22 per cent of the Canadian population. Ontario and
Quebec, containing 62 per cent of Canadians, created only 14 per cent of new
jobs. The Maritime provinces had fewer jobs in April than they did six years ago.
PART-TIME WORK
Two thirds of part-time workers are working shorter hours
because that's what they want. They're going to school, have personal or family
reasons or they don't want to devote their entire lives to paid work. Part-time
work is 30 hours a week or less. Last year, more than 600,000 people worked
part- time because of school, 200,000 gave family or personal reasons and
600,000 gave other reasons for not wanting full-time work and 800,000 said they
could only find part time work. Part-time workers in Canada represented 16.4
per cent of the employed in 1995, down from 17.3 per cent in 1993.
PIGEONS
More than half the pigeons in London's Trafalgar Square
have been rustled by two men. Police suspect that the birds, which are plump
from eating seed and leftover junk food all day, are being sold to restaurants.
PSYCHOLOGY
A
U.S. paint company that changed the name of its "off-white" hue to
"antique-silk" more than doubled sales of the colour.
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