Source:http://www.mckinseyquarterly.com/Data_centers_How_to_cut_carbon_emissions_and_costs_2255
Greenhouse gas emission can be attributed to emissions related to ICT - s/w laptops, PC's, data centers, networking, telecommunications & mobile phones. (ICT is overtaking aviation in terms of impact on environment.)
There are 2 sources of contribution to environmental impact:
1. Embedded s/w - energy & material used for production, transport & disposal of ICT
2. Energy used during the life-time of the ICT components - device & s/w
Examples -
1. PC's the major part of emission is in production as the PC's are idle during most of their lifetime.
2. For data centers, emissions is more a part of their working lifetime and less as compared to its manufacturing.
Geographically the growth in emissions from ICT is happening in emerging economies, India, China. Application wise, data centres will be growing the fastest followed by growth in workplaces as more and more of knowledge workers come into the workforce across the globe.
Within ICT the greatest opportunity to reduce emissions are:
1. Making ICT greener - i.e., making hardware more efficient, making larger more efficient data centres. Management initiatives - Productising infrastructure, virtualizing technology, industrializing the production of ICT.
2. Using ICT to make business processes more efficient, example - in energy production and energy distribution managing data better, having sensors to create relevant data and smart grids to ustilize the algorithmised data for efficient operations.The manner in which ICT can improve manufacturing or reduce energy usage is for example:
- In automotive production just knowing the carbon footprint across (global) supply chain.
- In private homes, making homes smarter to reduce carbon footprint of the private household.
- Optimizing of logistics & transportation to avoid congestion and waste of fuel, by looking at efficent less obstructed ways.
Net cost to companies for optimizing their energy usage and optimizing their processes using information technology (ICT) - The business process optimization case is more positive in terms of abatement as it looks at effcient usage of resources, better data capture and processes makes processes more efficient directly impacting organisations costs.
Provider and user end of technology receive these messages differently. The users (Banks, transportation, IT, aluminum production co's) are more open and excited to use ICT as a means of creating internal efficiencies as well as reducing carbon footprint while the providers (hardware and software providers) are more apprehensive / sceptical.
Dematerializing certain business processes (such as telecommuting, using more video-conferences) has limited impact, changing processes that can enable reduction on travel and other means, ICT would have major impact on the abatement potential.
Source: http://money.cnn.com/galleries/2009/smallbusiness/0901/gallery.smallbiz2009.smb/index.html
The year 2008 ended on a bleak note for all industry, specifically the small industries faced issues such as slow sales, frozen credit from banks, costs related to healthcare soaring and the credit card debts getting higher. What does 2009 hold :
- 2008 saw the cost of healthcare rising (by 5.7% per employee), and healthcare costs were the top issues for small and medium business enterprises. This year (2009) it is expected that healthcare reform takes center stage - President Obama is endorsing the forming of national health insurance fund that small businesses can have access to. These pools can negotiate better rates (as a collective) vs individuals. 2009 will see a beginning with more impact to be observed in 2010.
- As a fallout of the credit crisis, access to credit for even credit worthy businesses became an issue. Businesses responded cutting back on expansion plans , downsizing staff and focusing on other ways to increase the cash flow. The loan-guarantee program backed 30% fewer small business loans in 2008 than it did the year before. Banks profit not only from the interest on the loans they give, but by bundling these loans in the form of 'asset backed securities' which are traded to investors. With the value of many 'asset backed securities' dropping last year, the demand for this instrument declined, with no secondary 'Asset Backed Securities' market the banks stopped making even primary loans. This year (2009) it is expected that TALF (Term Asset Backed Security Loan Facility) which is instituted by the federal reserve, aims to make TALF (loan) available to 'Asset Backed Security' buyers, with the hope of spurring demand for 'Asset Backed Securities'.
- Tax cuts as a means of stimulating spending. Though the tax cuts were to expire this year (revert to pre bush era), president Obama will hold off on raising the taxes, instead would give tax break on income (the earners share only and not extended to employer share).
- Layoffs & hiring. Last year small businesses were the last to layoff. Last year large firm announced massive layoffs and these are expected to continue this year as well. While small businesses did not initially lay off until October when the recession became worse. From a small business point of view, layoffs mean, letting go of family members, relatives and longer working hours for the people that are left in the job.
- Credit card. Last year as the credit crisis worsened, card companies began to reduce exposure limits and increase interest rates to very high levels. The federal agency stepped in with new regulations safeguarding the credit user against certain credit card company practices of increasing rates on existing balances and charging late fee without notice.
- Commodities and Oil. Oil was on a roller-coaster last year seeing highs and lows in extremes. Iron & steel saw a surge in price by up to 30% while food grains also saw increasing prices. During the year a sharp decline in prices of corn, coffee and non-precious metals was also seen. this year these fluctuations are expected to continue while oil is expected to stabilize to more sustainable levels (for oil co's). Dollar is expected to fall against the yen and euro this year, due to low interest rates and the extensive U.S. government borrowing that will be necessary to cover the costs of the 2008 bailout packages. For companies that do business overseas, a falling dollar leads to increase in costs, and thus the price of raw materials in the U.S. tends to move opposite the direction of the dollar, which means more price hikes may be looming for commodities.
- The share of the dollar. Reduced credit availability (both consumer and institutional) and rising unemployment concerns, led to curtailed spending. So it may seem that Americans are for the first time saving & not taking more debt. Consequently holiday retail sales took a major hit as spending reduced. This year the story would continue and consequently we would see a large number of businesses (retail) shutting down, the ripple effect will impact store suppliers and also impact small businesses adversely.
Source: http://www.iata.org/NR/rdonlyres/250BD608-E428-4A49-B833-20C0E5B99344/0/industry_times_january2009.pdf
- International airlines saw a fall of 13.5% in cargo traffic in November and a drop of 4.6% in passengers as business shrank across the industry, the carriers' grouping IATA said on Tuesday.
- This has been the sharpest decline since 9 /11.
- The airline industry sees revenues tumbling & hundred of thousands of jobs being at risk.
- With the drop in passengers (in actual terms) the airlines are operating at 73%.
And this scenario is expected to intensify. - Further in America - which includes the United States, Canada and Mexico - carriers saw a decline of 14.4% in cargo and 4.8% in passengers.
- Europe recorded an 11% slump in cargo and 3.4% in passengers as the major markets for its airlines - intra-continental, the North Atlantic and Asia - all sunk deeper into economic woes.
- Despite the fall in oil prices and a low demand scenario for oil that will keep the price of oil soft, the industry is estimated to generate losses to the tune of US$ 2.5 billion in next year.
With an objective to look into the future with intent and focusing on the possible upside of this downturn, the following seems to come to mind quite naturally. The present global economic downturn has its share of positives, some more apparent than others, and these would surface in different forms and stages, in the journey out of this downturn.
- Spurt in entrepreneurship
- Re-surfacing of the systemic view and future - option portfolio approach
- Protecting of Growth Initiatives - Elevate, consolidate & redirect innovation funding
- Refocusing on value and what it means to, / the customer
- Demand & supply balance
- Opportunity for creating changes - long term impact
- Focus and emphasis on renovation and repair
- Re-skilling of oneself
- Rationalization - Balance of credit to cash from a consumers perspective
- Opportunity for people to collaborate remotely (work and social)
- Reduction in office space - focus on increase in productivity
- A closer scrutiny of the functioning of the corporate & board governance
- Re-modelling of business to take long term strategic positions
- Improve Cost Discipline
- Enhanced fiscal discipline awareness & emphasis on drivers of growth, cash flow & value
- Organizational restructuring (not rationalization) for efficient focus on Cash, Core People (not Processes), Delivery and Growth
From an individual & firm perspective these are the positives that the downturn has to offer
- Spurt in entrepreneurship
- Re-surfacing of the systemic view and future - option portfolio approach
- Protect Growth Initiatives - Elevate, consolidate, and protect innovation funding
- Refocusing on value and what it means to, / the customer
- Demand & supply balance
- Time for structural changes - long term impact
- balance of credit to cash from a consumers perspective
- renovation and repair
- Re-skilling oneself
- rationalization
- people to collaborate remotely
- reduce office space - increase productivity
- corporate & board governance - under scrutiny
- re-modelling of business and take long term strategic positions
- Improve Cost Discipline
- Reduce Cost of Goods Sold & Use, not General & Administrative Spending
- Incorporate capital costs into SKU cost reduction
Source:http://retail-tech.blogspot.com/2008/09/organized-retail-in-india-to-form-14-18.htmlUnorganised Retail & Organized Retail
The advent of organized retail has impacted the unorganized retail. But the unorganized retail is showing remarkable resilience and is all set to challenge the organized retail with innovative business models, hybrid formats, in-store operations focus etc.
The organized retail is where most of the focus has been and a lot of metrics have been floated that talk of very high growth rates. Information on unorganized retail is sketchy thus the possible ways of their resilience & responsiveness are not known.
But a closer study of metrics tells that focusing on revenue per square foot & area under retail, as levers of growth and value might not be the whole story and may not be entirely accurate.
And for the unorganized retail the relevance of these metrics might be very different (or in a different manner) than what it would be for organized retail.
If we look at organized and unorganized retail as the two extremes of formats, operations, consolidation etc. there is an opportunity to explore multiple, innovative forms of retail that can exist / co-exist profitably within these 2 extremes.
A scan of recent activities in the retail market shows some initial indicators for the same (even if it is at one end of the extreme...):
- Retailers, realty cos’ form partnerships to beat slowdown - Revenue sharing rental based model with minimum upfront payment emerging – without minimum upfront guarantee.
- Vishal Retail is in early stage discussions with some top developers to enter into a revenue sharing-based rental model,Megamart has signed a few large stores on revenue sharing-based rental model ,Brandhouse Retails.
- Big retailers not keen to anchor new malls (future group plans to open stores along with other retailers so that it doesn't have to go through a long gestation period to reach optimum sales).
Source: http://money.cnn.com/2008/12/30/news/international/china_migration.reut/index.htm
1. Chinese workers leaving cities in droves:
The social impact of the global growth slowdown is now becoming evident. The migration of over 130 million (rural) Chinese (prime drivers of China's long extended growth) to cities and industrial centres (as workers) is one of the largest migrations recorded. These 130 million workers / migrants - are known as China's "floating population". This floating population of workers rarely settle where they work (due to prohibitive residency rules) and they return in droves to their hometowns for the Chinese lunar new year & then go back to work, later in the year.
But today there appears to be a reverse migration. As demand for consumption in the world dips - the production centres of the world face a challenge of closing shutters.
It will be critical to see how many of these workers (floating population) do really return to work.
Source: http://biz.yahoo.com/hftn/081229/122908_miller_downwardmobility_fortune.html?.v=3
2. The Upside of downward mobility:
Fact: As much as 100 million Americans today live in families that are earning less in real terms than their parents did at the same age.
The rise of economies of China & India means the earnings picture for US is expected to get worse - One in three American jobs may be exposed before long to competition from workers overseas, resulting in putting an effective wage cap on large swaths of employment even if jobs don't actually move offshore.
More research dispels a myth that upward social mobility is higher in US as compared to Europe.
Post depression and world war, there was only America that was left standing with no competition (economic, business) in sight the growth in the subsequent years was astounding. The emergence of the classless society, distribution of prosperity was enabled by the Labor unions, a robust minimum wage, progressive taxes, and a sense of restraint on corporate boards regarding the salaries of chief executives - but those were the early days...
