OCTOBER 1994 Edition
BRITAIN
For years the British Disease was synonymous with labour
unrest and low productivity. This is no longer the case. Britons are the
hardest workers in Europe. The average Greek takes three hours for lunch and
Italian civil servants have just six hour days. Even Germans manage an hour and
a half meal break. But market analysts report that Britons work long days with
short lunches. They also lag behind in annual holidays with an average of 20
days compared to 30 in Germany and 25 to 30 in France. Britain also has the
least public holidays a year--eight. Germany and Spain have the most with 14.
Observers say Japanese businessmen continue to hold British workers in high
regard, a contributory reason for the high Japanese investments in Britain over
the past few years.
SMALL BUSINESS
The Canadian Imperial Bank of Commerce is giving away
do-it-yourself workbooks that small business owners can use to develop business
and financial plans. The CIBC also sees its Guide to Business Planning as an
aid in obtaining financing. It's available free from any CIBC commercial
banking centre or by phoning 1-800-465-2422.
NEBS
The New Exporters to Border States (NEBS) program
is now 10 years old and has contributed to the training of over 8,000 Canadian
exporters, mostly small and medium-sized enterprises. NEBS is a one-to-two-day
crash course in export marketing. Participation fees are low and the excellent
programs are put together by various Canadian border posts across the United
States. It is estimated that 50 per cent of NEBS companies engage in exports
after their participation in the program. Participants learn all the basics of
exporting, including transportation
matters, customs brokers, export insurance, distribution networks, and
much more. Canadian Consulates in the U.S. running NEBS missions are Boston,
Buffalo, Detroit, Minneapolis and Seattle. Interested companies can contact the
nearest International Trade Centre, co-located in Industry Canada offices to
register for a NEBS mission.
SATISFACTION
The chairman of the American Research Group has advised
Canadian retailers to advertise that their products come with a satisfaction
guarantee in their fight to keep customers during the superstore onslaught from
the south. He also said that salespeople should learn to understand the needs
of customers and even send out hand written thank-you notes to build loyalty.
He claimed that about 40 per cent of Canadian stores will disappear unless they
learn how to do battle with the U.S. retail giants. A recent study indicates
more than 70 per cent of Canadians questioned said they would buy at a new
competitively priced store--whether shoes or mattresses--rather than stick with
their current store. Stores that do survive will do so mainly by boosting
customer loyalty--not necessarily by lowering prices. A survey of 500 Canadians
and 800 Americans indicated Canadians are generally more loyal to the stores
where they shop than are Americans.
OUTSOURCING
Outsourcing by big companies means big opportunities for
nimble entrepreneurial firms. Coopers & Lybrand, which has surveyed
companies in the U.S., reports that the most popular areas for outsourcing over
the past year were payroll, 68 per cent; tax compliance, 48 per cent; employee benefits and claims
administration, 46 per cent; maintenance and equipment, 35 per cent;
manufacturing, processing and assembly, 33 per cent; sales representatives or
brokers, 27 per cent; internal auditing, 21 per cent; and accounting services,
19 per cent.
RAILWAYS
Trains are arriving all over Europe. Germany, Spain and
Italy all have versions of the high-speed French TGVs. Soon it will take only
three hours from London to Paris, without airport hassles or traffic jams. In
the U.S. Amtrak is pondering which sort of high-speed train will be chosen to
run in the lucrative Boston, New York, Washington corridor. And Texas is trying
to raise funds for a high-speed triangle linking Houston, Dallas and Austin.
All over East Asia huge investment is pouring into railways. By 2000, China
alone will be spending almost $50 billion (US) on railways.
Trains have many natural advantages over other forms of
transport. They consume less energy than cars and trucks, cause less pollution
and take up less space than roads. Above all, in crowded industrialized regions
such as Western Europe, they are fast. In Europe, airlines are in poor shape to
reply. This year, they will lose about $3.5 billion despite a rising market.
Where fast trains and airlines have competed head to head, as they have for 10
years between Paris and Lyon, the trains have won taking in that case, 90 per
cent of passengers.
CULTURE?
One of the most controversial aspects of the final days
of the GATT Uruguay Round was the issue of the US television programming
industry. The US exports around $2.5 billion dollar's worth of TV programming.
And that does not include theatrical showing of movies, home videos, and the
booming business of international satellite networks aimed at other countries'
cable, microwave and home satellite receivers. All told, US exports of movies
and TV programming amounted to at least $5 billion in 1993. The reverse
trade--US purchases of foreign shows, TV networks, and movies--totalled less
than $300 million last year.
SAVINGS
The way Canadians are saving their money is undergoing
change. In the 1960s, houses, land, cars, furniture and appliances constituted
about 44 per cent of individual Canadians' assets. About 49 per cent of their
assets took the form of cash, stocks, bonds, life insurance and pensions. In the
1970s when the first wave of baby boomers reached their mid-twenties, their
investment in housing--coupled with the rising costs of these houses--shuffled
a bigger share of Canadians' personal wealth into living space and the things
that fill it. By mid-decade half of the average Canadians' assets was tied up
in housing and only about 45 per cent was tucked into financial investments.
This trend reversed in the 1980s and 90s as more and more boomers began shifting their savings into paper wealth, the
kind of investment they hope will generate a healthy retirement income. In
1993, 52 per cent of Canadians' assets took the form of cash and other
financial instruments. Homes, land and durables fell to a 46 per cent share.
This latest shift has taken place during a period when the personal wealth of
Canadians more than doubled to $2.2 trillion (from $850 billion in 1980). This
represents almost $77,000 for each Canadian, up from $34,700 in 1980.
ABSENTEEISM
When 860 Canadian companies, with between 100 and 500
employees, were surveyed about absenteeism levels, 39 per cent were unable to
answer the questions. The others said that staff members were off work an
average of 5.5 days a year, costing companies 2.3 per cent of payroll. That
figure does not include the cost of lost productivity or hiring temporary
replacements. Nor does it include longer absences covered by formal short-term
or long-term disability programs for which premiums cost an equivalent of 1.85
and 0.99 per cent of payroll respectively.
THE FUTURE
The Business Council on National Issues has unveiled a
10-point "growth and employment strategy for Canada" which calls for
no new taxes and a zero federal deficit before the next economic downturn. The
plan also calls for local government to deliver more services and duplication
between levels of government to be eliminated---without opening up the
constitution. Other recommendations include: Canada should draft a
"coherent 21st century vision," such as aiming to be the top economic
performer in the G7 by the year 2000; Revamp social programs to make them
cheaper while targeting only those in need; "Non-inflationary growth"
should be a central tenet of economic policy; The federal government must
honour its pledge to cut the deficit to 3 per cent of GDP by 1996\97; Harmonize
provincial taxes in a new Value Added Tax only if it means no new taxes and,
improve education and training, including a longer school year.
INFORMATION TECHNOLOGY
Canadian trade posts in the U.S. produce a newsletter on the
IT industry (including telecommunications), providing Canadian exporters with
relevant and timely market information and intelligence in this field. Articles
cover companies, events, decisions, and technology that may have an impact on
the market for Canadian IT products and services. Contributors also deal with
joint ventures, strategic partnerships and investment relations. Currently, the
newsletter is mailed out in hardcopy every other month to almost 1,500 Canadian
companies at $2.35 a copy. The Canadian Consulate General Trade Office in San
Jose, California distributes the newsletter which is now available by E-mail on
Internet. Just send an E-mail message to the San Jose office
(canadian@shell.portal.com) to give them your Internet address.
BUSINESS INVESTMENT
Massive investment by Canadian companies in everything
from fax machines to computer-aided machine tools has radically altered the
profile of business investment over the past decade. The total value of all
fixed assets--everything from telephones to office buildings--is expected to
reach $1.6 trillion this year, up 38 per cent from 1984, and the technology
side is taking over from bricks and mortar. During the decade, the value of
assets tied up in machinery and equipment grew at more than twice the rate of
buildings and engineering assets--5.3 per cent compared with 2.2 a year.
Soft assets like computers, telephones and plant
equipment now account for 33 per cent of all fixed assets, up from 27 per cent
in 1984. Increasingly, companies are choosing to invest in machines instead of
people because that is where they perceive they get more value. Companies can
deduct from their taxes the money they spend on machinery and equipment while
payroll taxes and lower productivity act as a disincentive to hiring new
workers. The trend has been most evident in the service industries like
retailing, finance, insurance and hotels.
TECHNOLOGY
Twenty years ago, the Calgary Stockyards sold hundreds of
thousands of cattle a year through live auctions in a complex of corrals,
loading pens and barns along the railroad tracks. Those days are over. Today,
its nerve centre is a plain room in an office building where a computer is connected
by phone lines and modems to buyers and sellers in ranches and offices. Now,
the stockyards conducts most of its business in cyberspace.
USER DOESN'T PAY!
A local government in Britain has suspended a program
which sent young delinquents on vacations as a "character building"
exercise after one young offender was arrested for drunk-driving shortly after
returning from an 80-day African safari with his social worker at a cost of
more than $10,000 to the taxpayer. Other young convicts have been sent skiing.
TRIVIA
* In 1989, according to
the Worldwatch Institute, the world marine fish catch sold for $70 billion
(US), however, catching these fish cost $124 billion.
* One-third of the
Canadian population is involved in the educational system, either as students,
teachers or administrators.
* Around the world,
golfers spend almost $6.5 billion a year on equipment, as much as the GNP of
Latvia.
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