For some time I’m working on the KM integration of Strategy& (former Booz & Company) with PwC and I can say there is more than finance about this acquisition. They are good. PwC has probably acquired the best in strategy consulting.
You can make your own mind by having a look at their magazine – strategy+business (s+b). Forbes nominated it among the top 25 websites for CEOs and its readership now spans more than 1,000,000 business leaders around the world. The magazine publishes ideas from chief executives, prominent business thinkers, academics from leading universities, and subject matter specialists from across the PwC network.
In s+b‘s latest reader survey, 90% of respondents reported taking action after reading an s+b article. You may also find it to be an insightful resource.
During the last few years I’ve seen charts showing sharp growing rates of the middle class in Latin America. The charts look good but what they do not show is that, at least for the poorest economies, all this growth is based on wider access to loans. Basically, it’s not an increase in sustainable revenue but rather an increase in debt. The raise in debt is, of course, coordinated with a sharp raise of real estate prices.
As a side effect, the middle class growth is raising demands on governments and businesses for better public services which require more funds raised by either increasing taxes or getting public loans which leads to more debt.
The scenario tends to look familiar. In my opinion this is not going to last for long and we’ll see some real economical and social issues in Latin America over the next five to seven years.
Around 15 specialized companies are currently doing lobby activities in Romania, on a market amounting between EUR 5 – 10 million, according to Liviu Mihaileanu, lobby specialist, but its future growth potential is impressive.
Mihaileanu, co-author of the book “Regulating lobby activities. On the influence hallway”, and co-author of “Lobby in Romania” study estimates the lobby market can soar to EUR 70 million.
“Unfortunately, the lobby activity in Romania was carried out for many years in the “shadows”, and companies doing this have not been transparent,” says Mihaileanu. “Most companies and NGOs prefer to “try” lobby activities through their own means without seeking professional help,” he adds.
Romanian Tax, Law & Lobby, an event organized by Business Review on March 29, will try to gauge the potential of the lobby market in Romania, in the same time seeing if this activity needs tighter regulation.
Roberto Musneci, senior partner at consultancy Serban & Musneci, and Aurelian Horja, communication consultant, co-author of “Lobby in Romania” study will be among the guest speakers that will shed some light in this field.
The event will also address the latest legal and fiscal changes that impact the business community.
Finding finance for your business in uncertain times poses a challenge so Business Review organizes in the same day a special workshop on Access to Finance, focusing on Public Private Partnerships, EU funds and State Aid.
Government leadership in building infrastructure is critical for competitiveness. A majority of CEOs identified the priority for the governments of all countries outside of Western Europe and Japan, where infrastructure is well developed, and of China – where the government allocated almost US$600 billion of stimulus spending for infrastructure projects over the past two years, according to PwC’s 14 Annual CEO Survey.
The role of private capital in financing infrastructure is unavoidable: an estimated US$3 trillion per year needs to be spent on infrastructure across the globe in the coming decades, according to a recent report from the World Economic Forum.
However, businesses can provide more than cash: they have expertise, and the abilities to execute and manage risks. This is part of what makes PPPs attractive. As Berthold Leetfink, Deputy Secretary General of the Ministry of Economics, Agriculture and Innovation in the Netherlands told PwC, “At least for the Netherlands, and I think for many other countries, planning and building infrastructure is very much in the hands of government. But it’s obvious that the private sector has a lot of knowledge in terms of building cheaply, efficiently or in a more environmentally friendly way.” As an example, a PPP project in 2009 to connect a 12-mile regional rapid transit line in Vancouver (Canada Line) was completed several months ahead of schedule.
Needless to say, businesses also have a key expectation for their governments: to tackle fiscal deficits to restore stability to the markets in a way that is mindful of the fragile environment for global growth. Public revenues are of course expected to be part of the equation: a majority of CEOs expect taxes will rise, led by 65% of CEOs in Asia and 70% in Latin America.
The old economic order is shifting. As the global economy recovers some emerging markets are likely to grow faster than traditional economic powers. At the industry level, these shifts are even more apparent with accelerating capital flows, fundamental demographic changes, and the rise of state capitalism reshaping the world map for many sectors.
PwC’s Macro Consulting team has developed a tool to map future clusters across the world. As a result, they have highlighted the geographical locations that will host the largest clusters in five industries:
• The large increase in the share of world GDP represented by Asia over the next 30 years, helped by the expected rapid growth of economies such as China and India, should aid the development of dominant clusters in the region. This is likely to be especially apparent in industries that can benefit from large economies of scale. The top locations within Asia of some of these clusters have not yet come to light.
• In the pharmaceutical industry the cluster In Shanghai will grow to become one of the world’s most significant. However, the current leading clusters in New York and London to remain the largest. The increased affluence and aging populations in emerging markets will benefit centres such as Shanghai through boosting demand for healthcare.
• Growing automotive assembly clusters around Tianjin, Nanjing and Sao Paulo may rise to be amongst the world’s largest by 2040. The growth of the middle classes in China, India and South America will add hundreds of millions of potential car owners to the world market between now and 2040. This will require an enormous increase In production capacity in these regions.
• In asset management the existing large clusters in New York, London and Boston will be joined by Singapore, which May become the leading cluster in the Asian region. Tighter regulation and higher taxes are currently working against clusters in the United States and Europe but the key factor will be the increase in public and private capital available in Asia – which will fuel growth in asset management in the region.
• In the filmed entertainment sector Hollywood will retain its position up to 2040. However, it will face growing competition from rising film production clusters around Mumbai and Shanghai which are increasingly moving into mainstream productions.
• New York, London and Boston will remain the principal tertiary education clusters over the next 30 years due to the depth of quality universities they currently host, as well as offering environments in which these clusters can flourish. Many emerging and developing nations are investing heavily in tertiary education clusters, which are likely to improve significantly over the next 30 years. However, they will not surpass the existing top tertiary clusters in this timeframe.
• Can you identify your key talent today?
• Are you prepared to put a retention payment system in place to ensure that key talent does not leave your organisation?
• What will be the effect of such a programme on employees who are not covered by it? Are you ready to manage the consequences?
• Is this the time to review remuneration structures and to consider increasing the variable and/or deferred element?
• Have salary sacrifice cost reduction opportunities been fully explored?
• Can you use this opportunity to maximise the financial efficiency of current and future incentive arrangements?
• Should you review flexible working policies to drive down cost and extend the concept for specific areas of the business?
• Would it be appropriate to open up part-time working opportunities to employees who might not qualify under the existing policy arrangements?
• Is this the time to introduce policies for unpaid leave, career breaks and sabbaticals?
• Do you need to review effectiveness of your HR function, its restructuring capabilities and future role?
• Do your HR business partners have a clear understanding of the commercial realities facing your business?
Transform is the bi-annual magazine of PwC in Central and Eastern Europe (CEE). It covers the latest business trends in 25 markets across the region, from the Czech Republic to Kazakhstan. Each issue of the magazine goes out to 10,000 business leaders, financiers, politicians and opinion formers in CEE.
Within the last issue, PwC brings the regional CEOs of three leading companies – Siemens, Orange and the ROLF Group – together to debate this issue and asks Romanian business veteran Dinu Patriciu for his insight. Staying in Romania, PwC features an exclusive interview with Bogdan Dragoi, Secretary of State at Romania’s Ministry of Public Finance, on how the government is trying to get the economy there back on track.
Also, in the wake of the World Eonomic Forum’s annual leaders summit in Davos, Switzerland, in the New Year, PwC turned to four commentators with expertise in the region for their thoughts on what CEE’s business and political leaders should be tackling this year.