Unit 3 Micro: The Third Industrial Revolution
This is well worth watching! It is an 8 minute discussion from the Economist which examines what is being called “The Third Industrial Revolution” - based around the digitisation of manufacturing processes. Concepts such as 3d printing and advanced robotics are discussed, as are concepts such as competitiveness, productivity and product personalisation. One possible consequence of these changes might be that high quality manufacturing may begin to move back from lower-wage economies such as China and back to economies like the USA.
read more...»UK leads the world in commercial use of the internet
How important is the’ internet economy’ as a contributor to UK GDP? According to a study by the Boston Consulting Group, it contributes 8.3% of our GDP, which is a larger proportion than in any other of the G20 economies. The report’s author told the Today programme this morning that this was down to the UKs “great broadband infrastructure” and that British business has taken to the internet and is exporting around the world, “leading the world in e-commerce”. You can hear the interview with him here.
read more...»The Economics of Climate Change - Stern 5 Years On
Lord Nick Stern tonight gave the first of three lectures on the ethics and economics of climate change as the annual lecture series in honour of Lionel Robbins started at the LSE.
It is over five years since the publication of the Stern Report and much has happened in the intervening period. Stern however was at pains to emphasise that his core message remained undimmed, namely that the costs of inaction are enormous but the costs of early action to cut emissions are manageable. We have seen in recent years rapid technological change much of which is hugely encouraging in taking us closer to de-coupling the relationship between production and consumption and carbon emissions. But more is needed, Stern is arguing in these three lectures for a new industrial revolution, a deep set of changes to production processes and technologies that happens across every sector. The economics and politics of how progress might be made in moving towards a new revolution will be the focus of the second and third lectures.
LECTURE 1 - Tuesday 21 February 2012
What we risk and how we should cast the economics and ethics
LECTURE 2 - Wednesday 22 February 2012
How we can respond and prosper
LECTURE 3 - Thursday 23 February 2012
How we can get there: building national and international action
Unit 3 Micro: Inside the iPhone and Intellectual Property
This is a remarkable video featuring Geoff McCormick, director of UK design firm The Alloy that looks inside an iPhone at the component parts. Each and every iPhone contains thousands of patented components, ideas, designs and processes. Fantastic when teaching about the economics of intellectual property and the patent wars dominating the courts.
read more...»Unit 4 Macro: Focus on India - World’s Cheapest Computer
A few weeks ago came the announcement that an Indian business is finally set to launch the World’s cheapest tablet computer. This laptop device will sell for around 18 times less than the price of an iPad in London! How can a laptop be manufactured for less than $US 40?
read more...»Unit 1 Micro: Can the UK Computer Games Industry Grow
Britain is one of the world’s biggest exporters of creative products - from live TV shows and music to books, arts, architecture and films the economy has built up an enviable global reputation for excellence and a growing trade surplus to aid our balance of payments.
Computer games falls squarely into this category but, according to TIGA - the trade association representing the UK’s games industry - unless there is renewed government support, the future of this sector is at risk. TIGA claims that the British games industry is suffering a significant ‘brain drain’ as talented programmers and artists leave the country to work abroad.
read more...»Unit 3 Micro: 3D Printing and a Manufacturing Revolution
Additive manufacturing or 3D printing is an emerging technology that takes product design data which provides a geometric representation of a product such as a pen and that data is then sent over to a machine that allows products to be manufactured ‘on the spot’ typically using additive materials in liquid or powder format.
This TED talk from Lisa Harouni (co-founder of Digital Forming) looks at examples of intricately designed products made using this new and increasingly affordable manufacturing technology. 3D machines can build structures, build replacement parts and parts within parts - the detailed resolution possible is incredible.
read more...»Unit 1 Micro: Nano Technology and Energy Efficiency
Today’s research in the labs can be the harbinger of terrific innovations that change the landscape of consumer product markets in the years ahead. The iPod Nano is a brand but the research behind nano-technology itself might bring about eye-watering improvements in the energy efficiency of devices that are part and parcel of our daily lives.
This brief news report from Al Jazeerah looks at innovation in nano technologies and what might be around the corner. Researchers at IBM have created the world’s smallest magnetic digital-storage device, using just 12 atoms to hold a single data bit of information.
read more...»Unit 3 Micro: World’s Largest Solar Plant Opens
This autumn the world’s biggest solar plant power station opened in Spain. Comprising 600,000 parabolic mirrors, the Andasol 3 CSP plant is the size of 70 soccer fields and has 88km of piping. The economies of scale are huge and if solar power is going to work and be viable anywhere it is probably here or in North Africa.
read more...»Unit 4 Macro: Competitive Advantage in Trade (Some Videos)
Here is a selection of short video clips that I use when teaching competitive advantage in markets and when introducing the factors that determine the competitiveness of UK producers in global markets. The focus here is on the UK economy but I will add some more videos to the blog as I work my way through this teaching topic.
read more...»Unit 3 Micro: Is Facebook’s Social Network Dominance Eroding?
There is a wealth of interesting market share data available from the latest edition of Experian Hitwise, the regular analysis of changing activity across different social networks. The big winner in the latest figures appears to be You Tube - which according to Experian had its biggest ever month of traffic as 606 million UK Internet visits went to the website in December 2011. YouTube now accounts for 1 in every 4 visits to a social network in the UK and 1 in every 30 visits online.
Facebook’s share of visits to social networks has declined from 58% in December 2010 to 51% in December 2011. Does this tally with your own experience? Twitter’s share remains below 3% and Google + doesnt even make the top ten of social networks at the moment. More here from the Daily Telegraph. Facebook’s share of UK social networking declines
Unit 1 Micro: Malfunction in In-Race Betting Market
Bet Fair has built up an enviable reputation for running an efficient platform for in-race betting online. The platform gives punters the chance both to lay odds on a race and also to take a standard gamble on the result and the technology allows betting before and during the race. But events last week in Ireland have dealt a blow to the standing and reputation of the business as this Channel 4 news video amply demonstrates.
read more...»Unit 2 Macro: Mobile Phones and African Economic Growth
The increasing access to and usage of mobile phones is said by many development economists to be having a significant impact on growth and development in many African countries. A 2005 London Business School study reported recently in the Guardian found that for every additional 10 mobile phones per 100 people in a developing country, GDP rises by 0.5%.
The chart below tracks mobile phone ownership per 100 of the population for Sub Saharan Africa and also South Africa and Kenya
read more...»Unit 3 Micro: Patent Wars- A Touchy Subject for Apple
This excellent news piece from Ben Cohen at Channel 4 looks at the increasingly aggressive patent war being fought by the manufacturers of the world’s leading mobile phone and tablet devices - the most profitable products in the digital economy. “Where once the giants (Google and Apple) competed on features, they now compete on patents.”
The news feature looks in particular at the intellectual property surrounding the slide-screen technology used by millions to unlock a device. Apple claims the IP to this but a video tracked back to twenty years ago suggests that developers were already thinking of something remarkably similar long before the iPhone came into existence. Can the makers of Android defend legal claims from Apple that their IP has been infringed? And who will end up paying for the enormous legal fees and possible extra licencing costs?
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Unit 3 Micro: Hope Bikes - A Commitment to Excellence
Are you into your cycling? The huge expansion of interest in cycling in the UK from road racing through to BMX and mountain-biking has gone hand in hand with the fantastic success of British cyclists on the international stage. 2012 promises to be another strong year for the industry despite difficult economic conditions.
read more...»Unit 3 Micro: Brand Loyalty in Mobile Phones
Brand loyalty is hugely important in all kinds of industries and markets. The costs of acquiring a new customer vastly outweigh the expense of selling more to existing buyers and most of the mobile phone suppliers in this oligopolistic industry focus an enormous effort in building brand identity and brand loyalty to reduce the rate of customer churn (people who switch brands).
read more...»Unit 3 Micro: Patent Wars might Stifle Innovation
In this six minute piece, Rory Cellan-Jones from the BBC looks at the surge in legal actions concerning alleged patent infringements. Intellectual property lawyers are making huge sums from the trend but small and medium sized enterprises especially in technology spaces might have less scope, freedom and resources to innovate as a result.
Unit 4 Macro: Richard Florida on the Great Reset
What changes are produced by great economic upheavals? The financial and economic crisis prompts a rethinking of the assumptions about how businesses succeed and how economies operate. In a recent edition of the Global Business programme on BBC radio 4, Peter Day met Richard Florida, a renowned economic geographer who has written a new book The Great Reset. Here are some of the notes I jotted down from the programme:
read more...»Unit 3 Micro: Time of Use Pricing for Energy
When is electricity demand highest in the UK? The answer comes at the end of the blog!
The UK government is committed to the rolling out of smart energy meters between now and the end of 2020. Millions of homes will have smart meters installed which track how much electricity you use and when you use it - the installation cost is approximately £350 per unit although this may come down with the utilisation of economies of scale. Smart meters will give consumers and the utility businesses minute-by-minute information about energy consumption and this could fast-forward the launch of time of use pricing tariffs for us all in the years ahead. It will mark a move away from flat-rate tariffs towards fully-fledged peak and off-peak pricing.
At the moment around one in ten households are on Economy 7 tariffs which offers lower prices for electricity used during off-peaking times in the late evenings and early mornings. Economy 7 seems to have been around for as long as CEEFAX and if you understand that you are giving your age away!
read more...»Unit 3 Micro: Economies of Scale and the Kinect
Here is an example of economies of scale in production. Microsoft’s motion-sensing camera the Kinect was one of the fastest-selling consumer electronics device in history when it was launched in November 2010. In a report on the FT’s technology blog, Dennis Durkin, Xbox chief financial officer, is quoted as saying that economies of scale have been the major factor driving down the unit price of Kinect from $30,000-$40,000 when it was under development two years ago to $150 now.
read more...»Unit 1 Micro: Google Maps to Charge for Usage
Google has announced that heavy users of the Google maps application will now be charged - it will be interesting to see if this move from a zero price targeted at websites that make extensive use of the Google Maps coding will affect demand for the program.
read more...»Unit 3 Micro: Drop Box and Freemium
For many students and teachers DropBox is the cloud file synching application of choice, I share study files with colleagues and pupils as my courses develop and evolve during the year. The statis revealing the expansion of the business are impressive.
The You Tube video (below) is from Forbes as they interview founder Drew Houston and here is a link to the full Forbes article.
Drop Box growth statistics are impressive. DropBox is zooming in on 50-million-users, a forecast revenue of $240 million in 2011 even with 96% of users paying nothing - a classic example of the freemium model in action!
read more...»Unit 3 Micro: Amazon launches the Kindle Fire
In the increasingly competitive and contestable market for tablet devices, leading online retailer Amazon has launched the Kindle Fire.
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Unit 3 Micro: Science Cities and External Economies of Scale
This feature article from the BBC web site is essentially about the vital importance of high-knowledge industries in sustaining competitiveness and growth in a globalising world. Europe lags behind many emerging countries in terms of the resources devoted to science and technology, research and development and creative industries in particular.
But the article makes reference to the expansion of science cities - knowledge clusters that bring together higher education expertise and entrepreneurial zeal - their number continues to grow from California and Boston in the USA, Cambridge in the UK, Education City in Qatar, Science City in Zurich and Digital Media City in Seoul. All good examples to use of the commercial leverage from external economies of scale in high-tech industries.
Unit 3 Micro: You Sue, I Sue - Patent Wars Explode!
The scale of the legal battles between different businesses in the mobile industry might just be unprecedented. This nifty graphic from the iDownload blog provides an overview of the complex web of litigation - a lawyer’s dream! But if Samsung succeed in delaying the release of the iPhone5 then what might become of their reputation with millions of consumers worldwide? An Indian Summer hat tip to Graham Carter for flagging up this visual.
Slicing up the Apple - globalisation graphic
This lovely graphic from the Economist gives a visual picture of some of the forces of globalisation at play in the manufacture of the iPhone. I was particularly surprised by the contribution to components by Samsung, which is also one of Apple’s main competitors in the Smart Phone market. There are also some useful stats underneath the graphic which would be great in a lesson where concentration ratios and market structures are being introduced.
Slicing up the Apple - globalisation graphic
This lovely graphic from the Economist gives a visual picture of some of the forces of globalisation at play in the manufacture of the iPhone. I was particularly surprised by the contribution to components by Samsung, which is also one of Apple’s main competitors in the Smart Phone market. There are also some useful stats underneath the graphic which would be great in a lesson where concentration ratios and market structures are being introduced.
Unit 3 Micro: Motorsport Valley and External Economies of Scale
The occasion of the 2011 British Grand Prix at Silverstone in Northamptonshire is an opportunity to showcase the extraordinary growth and success of the motorsport industry in the UK. It is a classic example of the benefits that can flow from external economies of scale, and also of the way in which genuine competitive advantage in the global economy can be built and nurtured.
read more...»Unit 3 Micro: New Business Models in a Digital Age
Here is a link is to an article from the Wall Street Journal Blog - written by Don Tapscott, author of Wikinomics. He provides five examples of industries facing structural challenges in the digital age and how a revamped business model based around collaboaration might pay dividends - he is an interesting guy to follow for potential E&M and Economics students
The Future of Food Retailing? Tesco in South Korea
Here is a fascinating short video on the techniques and tactics adopted by Tesco as they sought to become South Korea’s number one offline and online food retail store.
