Size and productivity

I want to share with you this interesting graph about regulations in employment market and the disadvantages it carries when talking about productivity and economies of scale.
How can we be more productive while dealing with national regulations regarding to company's size?

Why are Greece, Portugal, Italy and Spain in trouble? Well, as you can see, there are some reasons appart from public debt. The atomisation of the market in these countries is literally killing them.
In the third graph we can see that the added value per employee is twice in big companies than in small ones.
This is not just due to economies of scale, but to the whole system.
As you can see, the regulation in France, as it happens in other countries, makes specially difficult to have companies with more than 50 employees. This fact, joined to the structural atomisation of PIGS's market, makes almost imposible to an average company to compete and paints in dark Europe's future.

Spain's Cultural problem

One of the biggest problems of Spanish economy is employees' mediocre mindset.

Against the thought of some experts, the problem isn't just the Crisis, in which I include all the 'small' crisis we have at the same time: real state crisis, the public debt crisis, the financial crisis or the labour market crisis, but people's behaviour under some extreme circumstances.

Since 35 years ago, Spain's been a modern and democratic country, where all the society moved to become equal in rights and duties. But for the past few years, Spain has lost the spirit to improve and learn. From school to the job market, through high school and university, Spanish people join the mass, feeling safe in the knowledge that behaving like the others, you become part of them and noone is better than other. We've been waving the flag of democracy and equity, but forgeting that being equal is not a result, but a starting point to grow and become better and why not, set differences between people.
Now is time to change our minds and support these young people with willingness to improve and learn, instead of laughing at them if they try to speak better english or get better marks in maths. 'Nerds' are not anymore 'Nerds'. They are well educated people with knowledge and capacity to be better day by day. 'Nerds' are the future and present of a society that has been for too much time leaving them out.

History of world's GDP

Interesting graph published by The Economist.

It shows the percentage of all the goods and services (what economists' call GDP) produced in history that was produced in each of the 21 centuries.

Interesting to note that 55% of history's GDP was produced in the XXth century. But perhaps more interestingly, 23% of the goods and services produced through history were produced during the LAST 10 YEARS!!!

Finally, it is also interesting that 28% of the person-years lived through history were lived in the XXth century (reflecting both the increase in population and the increase in life expectancy) and only 6% of years lived were lived in the last 10 years. Of course the implication is that the income earned by the average person has increased exponentially. Another example that our economic system is not as bad as many want us to believe!



Text directly quoted from: Xavier Sala i Martin, http://salaimartin.com/random-thoughts/item/205-history-of-worlds-gdp.html

Entrepreneurship as a need

The time is over: XX century managers have shown themselves they aren't up to date to the new century. The last few years are the prove they cannot adapt themselves and their organisations to the new business model and therefore, create jobs and be competitive with emerging economies.

We, as young and well-prepared professionals, have the need to become entrepreneurs and stop waiting for an employment position in a brand.

What are you going to do?

How is german fiscal health? Good question, indeed.

Just read Xavier Sala i Martin Tabú question: How is german fiscal heath? Good question, indeed.

Here you can read the whole article.

"La pregunta Tabú en Europa, la que nadie se hace por miedo a que le den una respuesta es: ¿cómo está la salud fiscal de Alemania? Todo el mundo da por hecho de que Alemania es el garante último de todas las deudas de Europa y que su AAA está garantizada para siempre. Los mercados siguen pensando que Alemania es el país más seguro y sacan su dinero de los países periféricos (Grecia, Italia, España, Portugal e Irlanda) para invertirlo en Bunds alemanes com un rendimiento minúsculo de menos del 2%. 

Pero la deuda alemana como fracción del PIB supera el 80% (en este sentido es MUY superior a la española, que no llega al 70%!) y todo indica que ese nivel de deuda va a empeorar, y mucho, en un futuro no muy lejano por la gran cantidad de compromisos explícitos e implícitos que Alemania ha hecho o se va a ver obligada a hacer.

Primero, la recesión económica que vive la periferia de Europa ya ha llegado al norte. Hasta ahora, Alemania se ha salvado de la crisis pero la cosa está empezando a cambiar. A medida que Alemania se hunde en su propia recesión, sus cuentas públicas se van a deteriorar porque sus ingresos fiscales van a caer y sus gastos por desempleo van a aumentar. Esperemos que Merkel no cometa el error de intentar solucionar su crisis con políticas keynesianas de demanda ya que eso solo empeoraría la situación, cosa que pueden atestiguar hoy sus amigos españoles (si es que los tiene).

Segundo, la población alemana está envejeciendo rápidamente y los babyboomers ya están a punto de jubilarse. El impacto fiscal de ese tsunami demográfico es gigantesco no sólo por las pensiones que van a cobrar sino por el gasto sanitario que una población tan anciana va a representar. A pesar de que Alemania exige reformas de pensiones y recortes en la sanidad de los países periféricos, no hay indicios de que ellos estén introduciendo esas reformas o practicando esos recortes.

Tercero, Alemania ya ha comprometido varios cientos de miles de millones de euros al fondo de rescate de Grecia, Irlanda y Portugal (unos 400.000 millones de momento entre todos los países del Centro). 

Cuarto, a medida que la crisis se expande a países más grandes como Italia y España, las necesidades de dinero público alemán aumentan. Grecia necesita unos 200.000 millones. Italia y España necesitan 1,4 BILLONES de euros para financiarse SOLO EN LOS PROXIMOS TRES AÑOS!

Quinto, pero la crisis no se expande solamente a Italia y España. Es un secreto a voces que Francia está a punto de perder su status de AAA y lo mismo pasa con Bélgica. Las primas de riesgo de esos países empieza a dispararse. Eso quiere decir dos cosas. La primera es que esos países están dejando de ser países del Centro (con capacidad de garantizar y financiar la deuda de los de la perder). El Centro se queda cada vez más pequeño. La segunda es que al dejar de ser países del Centro pasan a ser de la periferia. Es decir, no sólo no aportan dinero y garantías a los fondos de rescate sino que pasan a necesitar dinero y garantías. A medida que el Centro pierde países miembros y la periferia los gana, nos acercamos a un mundo en el que sólo hay un país que paga: ¡Alemania! No hace falta decir que esa situación generará un agujero fiscal en Alemania de dimensiones cósmicas.

Y sexto, todo apunta que la solución que se está gestando durante estas últimas horas en Europa es la expansión del fondo de Rescate (EFSF) con dinero de verdad (no con apalancamiento, que es lo que burdamente intentaron los líderes europeos en su último conejo de la chistera). Ese dinero vendrá de Estados Unidos, del FMI, de Alemania, de los BRICS y, sobre todo, del Banco Central Europeo (BCE). Parece que se va a llegar a una cifra de 600.000 millones para España e Italia, lo que permitirá dar un respiro de un año y medio (no se llegará a los 1,4 billones que se necesitan para un programa estable de 3 años). El problema es que, como no hay garantía de que Italia y España vayan a hacer los deberes (de hecho, nadie sabe exactamente cuales son las propuestas de Rajoy o cual va a ser su equipo económico), existe la posibilidad de que ambos países no sean “solventes pero sin liquidez” sino que sean “insolventes”. Si son insolventes, el BCE se quedará con una cartera de bonos basura que puede acabar llevándole a su propia quiebra. Si el BCE quiebra, alguien va a tener que recapitalizarlo. ¿Quien? Lo han adivinado: ¡Alemania!

Resumiendo, los compromisos fiscales de Alemania para los próximos años son enormes. Tan enormes que parece mentira que nadie en Europa se haga la pregunta tabú."

http://www.twitlonger.com/show/fah7k1

Happy new year

During last month I ate, walked, travelled, enjoyed and slept hours and hours - truly holiday time with the family -. But after these weeks of inactivity. I come back with more opinions and articles, comments and interesting facts of daily life.

As a small sum up, that is what happened in the world:

USA |  Mitt Romney has beaten his Republican rivals and looks to be the new candidate to be President of United States. He's charming and a political animal with more than 25 years of experience in management consultancy companies, making them more efficient and making a lot of money.

Europe | 2011 Germany data: 3% of growth and around 6% of unemployment. For sure the best place to find a job in Europe. We'll post about this topic in the following days!

Innovation | Next Thursday 19th January will take place in Göttingen (Lower Saxony, Germany) the Innovation Day. Highly recommendable!

La Doce Vita è finita!

Meine Damen und Herren, Masdames et Messieurs, Ladies and Gentlement!

Comment ça va?  Do you feel good?

Ich bin euer conferencier. Je suis votre compere, I am your host. (And you're my guests)
Und sagen

Willkommen, bienvenue, welcome. Im cabaret, au cabaret, to cabaret...

 

Leave your troubles outside. So life is disappointing, forget it!
In here life is beautiful.
The girls are beautiful.
Even the orchestra is beautiful.

 

 

Silvio has been playing the Master of Ceremonies & Entertainer role in the European cabaret during the past decade but now the party is over. Time's over! No more girls, no more partys, no more cabaret. The show can't go on anymore!

 

The lack of confidence in the Italian economy is making the stock market going crazy, with ups and downs everyday, making the solution of the crisis more and more expensive day by day. The announcement of new refforms is not working anymore. Although the economic situation of Italy is still being the same as the previous 20 years, something has happened. Is it just an attack promoted by te americans or chinese to the Euro? Or is it a real and unsolvable debt crisis?

 

For years and years, the Italian debt has been on the 120 % of GDP with an average grow of  1%. So, what's different now? Why are we facing this situation that seems it has no solution? And much more important, how can we get advantage?

 

I leave it as an open question. Despite the crisis, everyone of you has to find his own answer. To help you thinking and taking a move, I'll post this encouraging message from Rocky Balboa.

Let me tell you something you already know. The worlds aren’t all sunshine and rainbows. It's a very mean and nasty place and I don't care how tough you are it will beat you to your knees and keep you there permanently if you let it...

You've gotta hit as hard as life. It isn’t about how hard you hit, it's about how hard you can get hit and keep moving forward. How much can you take and keep moving forward? That's how winning is done.

Greece: Financial disaster or hidden opportunity?

In japanese, the word crisis (危機=kiki) is made of two different letters: 危=”danger” & 機=”opportunity”.
I know that most of you have heard about this before but with the tale I'm going to tell you now you probably will see the crisis with other eyes.

In a normal afternoon, between caffee and cupcakes, a smart physicist (The Father-in-law) shared with his son-in-law his view of the states-debt-crisis, focus on the case of Greece.

He appointed that the European Central Bank should print money to repaid the debts of Greece.
I've heard this point of view millions of times but he went much more precisely than the people (most of them are renamed economists) talking about that on TV.

He made the figures about the amount of debt that Greece and other countries like Spain and discovered that the total amount of debt in Europe is just like the 20-30% of the total assets. So he suggested to print a certain amount of money per person. Imagine that each person is given 10,000 € so we're printing 3,000,000,000,000 € for all the European population. Spain will receive about 470,000 million € which must use to pay the 600,000 million € debt it has.

In the case of Spain, we almost pay the debts. For other countries the amount received is enough to pay the debts and also to keep money and invest it on building bridges, roads, railways or any other kind of investment that could help to create employment.

Where's the trick? An increase in the quantity of money is linked to an increase in the inflation rate and into a depreciation of the Euro against other currencies like the US Dollar. 

So, in the one hand, we'll have to pay more for our goods and even much more for those goods which are imported but on the other hand, this situation makes the european products cheaper to compit in the world so it's easy for us to sell our products abroad.

The big problem is that if we print money to pay our debts we lose our international credibility.

Who will certify to the markets that we're not going to do it again in a future? Who is going to save money instead of spend it if we save them each time they do the things wrong? Who is going to teach us that we cannot play with international economics and get free of all the stuff?

Now think about it: Credibility... I think we lost it long time ago.