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Brexit caused a large negative effect on UK trade pre-pandemic - new Aston University research
Professor Jun Du and Dr Oleksandr Shepotylo analysed the causal effect of Brexit on the UK’s services trade between 2016 and 2019 They found the UK experienced an average shortfall of £18.5 billion worth of services exports for each of those years Transport, Travel, Insurance and Telecom sectors experienced significant decline post-2016 No significant decline was found in other services including intellectual property, construction and financial. New research from economics experts at Aston University has found Brexit has caused a largely negative effect on UK services trade since the EU referendum. Professor Jun Du and Dr Oleksandr Shepotylo, from Aston Business School, analysed the causal effect of the Brexit referendum on UK’s services trade over the period between 2016 and 2019, in comparison to other major services exporters. They found the uncertainty associated with the UK-EU trade negotiations following the referendum caused harms to the UK services economy as a whole, reducing firms’ exports of services. This damages the competitiveness of services sectors which make up a lion’s share of the UK economy in terms of gross output, value-added and jobs. Professor Du and Dr Shepotylo used a Synthetic Difference in Differences (SDID) estimator to construct a counterfactual of the UK, had it not voted leave in 2016, to compare its services exports performance. This was done by comparing the actual performance of the UK with the modelled performance of a country that looks much like the UK, but did not vote to leave the European Union. They found Brexit resulted in the UK experiencing an average shortfall of £18.5 billion worth of services exports every year between 2016 and 2019 relative to what it would have been, had the UK remained in the EU. The impact varied considerably between different types of services. The UK’s exports in the category of transport, travel, insurance and telecom services saw a statistically significant decline following the referendum. No significant decline was found in business, intellectual property, construction, financial or personal, cultural and recreational services. In addition, Professor Du and Dr Shepotylo did not find evidence to suggest that UK businesses have redirected exports in services from the EU markets to those outside the EU, which is in contrast to exports in goods. The research suggested that Ireland has benefited significantly during this period, with growth in post-Brexit services exports up by £24 billion annually over 2016 to 2019 in the country compared to the counterfactual scenario if Brexit did not occur. This translates to 14.75% of Ireland’s 2019 total services exports, with growth clustered largely in the telecoms, business, intellectual property, and insurance sectors. Jun Du, professor of economics at Aston Business School, said: “Brexit marked a rupture in the highly integrated UK-EU services markets that had been developed during the UK’s membership of the single market. However, the UK’s strength in services was not reflected in the government’s ambitions for the sector in the EU-UK trade negotiations that followed the referendum. “There are other winners besides Ireland in some post-Brexit services areas. The Netherlands have increased considerably in ‘Business’ and ‘Intellectual Property’ exports. “Spain has seen growth in ‘Travel and transport’ services exports. Germany has gained in ‘Transport’, ‘Insurance’, ‘Telecom’ and ‘Intellectual Property’ services exports. While Ireland seems to have done exceptionally well in relation to the export of ‘Telecom’ services, a sharp contrast emerges to the lost exports not just from the UK, but also from the Netherlands, Switzerland and France.” Dr Oleksandr Shepotylo, a senior lecturer in economics, finance and entrepreneurship at Aston University, co-wrote the working paper and said: “UK services exports are 5.7% lower than they would be without Brexit. It reflects an overall decline of the UK as a place for doing business. “What economists tend to agree on is that the UK’s exit from the EU’s custom union and single market may have more significant impacts on services than goods, and more severe impact on post-Brexit regulated services than unregulated services. “It will take some time for the full impact of Brexit on UK services to emerge. Freedom of movement and data flow in some areas between the UK and EU could remain restricted. Stability, transparency and regulatory consistency in financial markets could be challenged. But new opportunities might surface. “Continued trade negotiations and dialogues regarding trade liberalisation are essential with the EU and large, fast-growing markets beyond Europe. Crucial to understanding these impacts will be reliable data and rigorous analysis. Our modelling of marked losers and winners in post-Brexit services trade provides new evidence for an open discussion of the post-Brexit trade in services.” You can read the full working paper HERE
Prices are going up, shipments are being delayed and there are shortages of good and essential parts and pieces hindering almost every aspect of industry and manufacturing across America. The topic is getting attention from media outlets across the country as retailers and shoppers adapt to the problem. Hasbro Inc (HAS.O) said on Tuesday global supply chain disruptions cost it about $100 million in lost toy orders in the third quarter, and the company warned of a further hit to sales during the crucial holiday shopping season. While demand has surged over the last year, factory shutdowns, a lack of container ships and long port delays have fueled fears of a shortage of toys to put under Christmas trees during the holiday season. October 26 - Reuters Amazon on Monday reassured shoppers and industry watchers that it’s well-prepared to avoid supply-chain challenges during the holiday season. In a blog post, Amazon said a combination of planes, trucks, ships and delivery vans, along with staffed-up warehouses, has put it in a good position to “get customers what they want, when they want it, wherever they are this holiday season.” Retailers are entering what’s poised to be a particularly challenging holiday shopping period, due to existing supply-chain woes, inflationary pressures and labor shortages. Several factors are behind the issues, including skyrocketing shipping container costs and container shortages, Covid-19 outbreaks at shipping ports, as well as a shortage of workers needed to unload containers and handle goods at warehouses. October 25 - CNBC The United States is facing a supply chain crisis that it has never seen before. Some are blaming COVID, trade deals and shipping. The issue is causing serious trouble for America’s already fragile economy. If you’re a journalist covering this important topic let our experts help with your questions and stories. Georgia Southern University's Jerry Burke, Ph.D., is a professor in the Department of Logistics and Supply Chain Management. Burke researches manufacturing and service operations. He is available to speak with media regarding this important issue - simply click on his icon now to arrange an interview.
Friends or enemies? Is there any solving the ancient secret that is Chinese diplomacy?
When it comes to trade, investment and trillions of dollars of opportunity for American companies – it would appear that China and the United States should be close-knit allies. However when it comes to military escalation, an emerging global bull and national security – China is also a country that the U.S. government is very concerned about. NPR recently got in touch with UMW Professor of Political Science and International Affairs Elizabeth Larus to lend her expertise when it comes to the politics of China. Elizabeth Larus, who teaches Chinese studies at the University of Mary Washington in Virginia, says any economic "de-coupling" between the U.S. and China will be very difficult. "You can't just say you're going to pick up your factory and move all your resources and have a consistent, reliable energy source and the shipping port to get your stuff out at a decent price, and the logistics. China has nailed that down," said Larus, the author of Politics and Society in Contemporary China. China's President Xi Jinping uses this as leverage, she noted. "One of the goals of this Xi Jinping regime is to make the world really reliant on China for its supply chain, but not to have China reliant on the rest of the world," she added. "So that makes it difficult for the businesses." Is there a way out of this downward spiral? "I do not see a de-escalation anytime soon," she said. October 08 - NPR There will be no easy or immediate solution to the hot-and-cold relationship between the United States and China. But if you are covering this ongoing story – then let our experts help with your questions and coverage. Dr. Elizabeth Larus is an expert in the politics of China. She is available to speak to media, simply click on her icon to arrange an interview today.
Japan House: Fifty Years Ago Today
Joshua W. Walker, Ph.D., President and CEO, Japan Society This September we're celebrating the 50th anniversary of Japan House, Japan Society's landmarked headquarters building. Let's jump in our time machine and go back to 1971, when Japan Society was only 64 years old. At that time, U.S.-Japan relations were deeply embroiled in trade frictions while the ending of the U.S. embargo of China had just begun to impact East Asia. 1971 snapshots In the United States: Richard M. Nixon is President; Apollo 14 lands on the moon; massive protests are held throughout America against the Vietnam War; Walt Disney World opens in Orlando, Florida; Joe Frazier defeats Muhammad Ali in 15 rounds at Madison Square Garden; the first Starbucks opens in Pike Place Market, Seattle. In Japan: Eisaku Sato is Prime Minister; the U.S. and Japan sign an accord to return Okinawa to Japan; NHK TV implements colorization of all programs; Kamen Rider TV series begins broadcasting; the 48th reigning Sumo champion Yokozuna Taihō announces his retirement; McDonald's opens its first store in Ginza, Tokyo; Nissin creates the first "cup noodle." Japan House Meanwhile in New York City, Japan Society had occupied eight different locations since its founding in 1907, and by the mid-1960s, a dedicated building had become necessary to house the Society's rapidly expanding initiatives. Japan Society President John D. Rockefeller 3rd made a very generous pledge by donating the land for the building site and Japanese modernist architect Junzo Yoshimura was confirmed to design the building. On September 16, 1969, John D. Rockefeller 3rd and Japanese Foreign Minister Kiichi Aichi broke ground at a formal ceremony. Construction proceeded on schedule and staff moved in during the spring of 1971, with Executive Director Douglas Overton noting, "Each day we have found some new and delightful feature which has come off the drawing board as an unexpectedly brilliant success. Japan House will be a national important building worthy of its high purposes." Opening Week—five star-studded days of celebratory events—began on September 13, 1971 with Their Imperial Highnesses Prince and Princess Hitachi at the ceremonies. The Prince brought Japan's best wishes to the Society "for a new chapter, both rich in content and wide in scope." The Gallery opened its first exhibition, Rimpa: Masterworks of the Japanese Decorative School and the Tokyo String Quartet performed in the new auditorium. Junzo Yoshimura wrote about Japan House, "People the world over used to build their houses with local and traditional materials. Today, however, contemporary buildings all over the world use the same basic materials—concrete, steel and glass—yet different characters and nationalities can still be perceived among them. In designing Japan House I have tried to express in contemporary architecture the spirit of Japan." With the formal opening of the Society's headquarters a new era had begun. Their Imperial Highnesses Prince and Princess Hitachi and Japan Society chairman John D. Rockefeller 3rd view the first Japan Society Gallery exhibition Rimpa: Masterworks of the Japanese Decorative School. Photo © Thomas Haar. The next 50 years Fifty years later, we are at another inflection point. The novel coronavirus pandemic has taught us just how interconnected we are as a global community while placing new importance on our homes and transforming the nature of work. This unprecedented global crisis has also illuminated the strengths and weaknesses of our organization, providing new opportunities for envisioning the future. Just as the opening of Japan House shaped the Society's last 50 years, today we are reimagining how we use our space, from the physical to the digital, forging broader connections or kizuna for U.S.-Japan and for the world. We embrace our mission for the years to come, reaching out far beyond our building, to our city, country, and world as we seek to connect American and Japanese people, cultures, and societies through a global lens. Like a hike up Mt. Fuji, Japan Society’s nearly 115-year-long journey itself defines us far more than our current destination. Beginning in 1907, the first iteration of Japan Society focused on business relations between the U.S. and Japan. For its 1952 post-Occupation reconstitution under the leadership of John D. Rockefeller 3rd, the Society dedicated itself to arts, culture, and education, with an emphasis on supporting Japanese students in New York as well as spreading the word about Japan through significant cultural milestones such as partnerships with The Metropolitan Museum of Art and Lincoln Center, with traveling exhibitions and outreach on both sides of the Pacific. With the opening of Japan House in 1971, politics was reintroduced into the mix, the business and policy communities energized, and Japanese popular culture landed large—nearly 50,000 people came to the Grand Sumo Tournament at Madison Square Garden co-sponsored by Japan Society and the Asia Society in 1985! Today at Japan House we present Japan and U.S.-Japan as a way to engage with history and tradition, on the one hand, and innovation and the future on the other. As in 1971, the time to act is now and our opportunities are as great as the challenges of 2021. It's up to us to work together on new, critical connections to take us through the next 50 years. I'll be there with you. Joshua Walker (@drjwalk) is president and CEO of Japan Society. Follow Japan Society on Twitter, Instagram, Facebook, and LinkedIn. The views expressed in this article are the writer's own.
International trade expert on U.S.-China trade relationship
Timothy Meyer, professor of law, is available for commentary on U.S. Trade Representative Katherine Tai's assessment of China's unfair trade practices. Tim is an expert in public international law, with a specialty in international trade. His current research examines how international economic agreements relate and respond to concerns about economic opportunity and inequality. He can discuss: Economists' longstanding monitoring of the data, which clearly finds that China is not living up to its commitments. How Tai's comments point to the Biden administration taking a hard line on China - potentially even a harder line than the Trump administration was willing to take regarding enforcement.
Aston University to officially launch Cyber Security Innovation Centre at Birmingham Tech Week
It will take place at Conference Aston on 13 October, during Birmingham Tech Week 2021 Line up of speakers includes experts from Security Exports Department for International Trade, DCMS and the IoD The event will be of relevance to companies, alumni, academic staff interested in cybersecurity. The Cyber Security Innovation (CSI) Centre at Aston University will host its inaugural event during Birmingham Tech Week 2021. The CSI Centre, established in 2020, brings together stakeholders from industry, government and leading cyber security research institutions with the aim to deliver industry-aligned research outcomes. CSI members include globally-recognised academics undertaking research projects that address real-world cyber security challenges through innovative solutions. Cyber (In)Security, Requires a Robust Approach Through Continuous Innovation, will see a broad range of contributors taking part across the face-to-face event on 13 October. They include speakers from the UK Defence and Security Exports Department for International Trade, the Institute of the Directors (IoD), Cyber Senior Policy Lead, DCMS, Opel/Vauxhall and Professor Vladlena Benson, Director of CSI Centre. Professor Vladlena Benson, director of the CSI at Aston Business School, said: “I am delighted to officially launch the CSI Centre at Conference Aston during Birmingham Tech Week 2021 and am looking forward to welcoming everyone to our first face-to-face event. “This is a wonderful opportunity to meet face-to-face with industry-leading experts, academics and start-ups. With most of the UK confined to working from home for over a year, there is no better opportunity to meet and build relationships with the people who can help business owners grow, innovate and make their companies more resilient. “Statistics shows that UK small businesses are successfully hacked every 19 seconds2 and new certification standards coming into play for consumer IoT devices and cyber-physical access control systems. It is time to find a robust approach maximising the effectiveness of cybersecurity investment now. “The bad guys are winning the cyber security war - the good guys need to do better. Although organisations are investing more and more in cyber security, the average number of days to detect a breach is increasing year on year, not reducing. So, we need to do something different.” To attend the event on 13 October 2021, you can sign up HERE.
Baylor Expert: 9/11 Reshaped Every Aspect of American Life – Not Necessarily for the Better
English professor, culture expert says terror attacks damaged America, but it’s not too late to recover sense of purpose and generosity The Sept. 11, 2001, terrorist attacks on the World Trade Center and the Pentagon continue – 20 years later – to have profound effects on everything from America’s political, religious and cultural polarization to American entertainment choices, said Baylor University faith and culture expert Greg Garrett, Ph.D., professor of English. “It shouldn’t surprise anyone that an event that shook our sense of security and our identity would be reflected in every aspect of American life,” Garrett said. “But what does surprise and alarm me is the degree to which 9/11 continues to shape our attitudes about race, religion, immigration and the Other, whether that Other is in Afghanistan or just across town. The United States initiated a perpetual war against terror in response to the 9/11 attacks, and the fear that took root in the American psyche has proven difficult to shake.” Garrett, author of more than two dozen books, is internationally recognized as an expert on faith, culture, race and story, and he argues that the reaction to 9/11 can be measured just as much through literature and culture as through accounts of executive orders and covert military operations. Country music, procedurals and reality TV after 9/11 “Initially, Americans supported the War on Terror across political, religious and cultural lines,” Garrett said. “Country musicians like Toby Keith leaned into militant songs about American greatness and righteous revenge. The top-selling act the Chicks (then the Dixie Chicks) was drummed out of country music for their public stand against going to war. The TV show 24 reflected the growing darkness of America’s extra-legal approach to that war—the willingness to use torture, rendition and the opening of a dark site in Guantanamo Bay to house suspected terrorists—and it actually shaped opinion and policy as it grew in popularity and influence.” Two other types of television shows became extremely popular as a result of 9/11, Garrett said. Procedurals (shows such as CSI, Law and Order and House, M.D.) gained a new popularity because they offered viewers something the ongoing War on Terror never could or will: closure. “A serious problem was introduced in every episode, grappled with and solved by the end of an hour,” he said. Another type of show that leapt in popularity in the months and years following the attacks – reality shows – offered “train-wreck escapism,” Garrett said. “The contestants on Survivor and The Bachelor, and the wayward souls on Jersey Shore and Keeping Up with the Kardashians, presented exaggerated versions of our present moment that allowed viewers to forget about the dark actuality of the times,” he said. Springsteen, Harry Potter and critiquing ‘moral failures of the War on Terror’ Not all popular culture offered reinforcement or escapism, Garrett said, adding that some of the most powerful pop culture from 2001 onward critiqued the “moral failures of the War on Terror and critiqued the American people for so readily accepting them.” “Punk rock, always a prime medium for protest, was one of the earliest forms of dissent,” Garrett said. Green Day’s 2004 album American Idiot reached the top of the charts in the United States and 18 other countries, ultimately selling 16 million albums. But mainstream acts like Bruce Springsteen also asked complicating questions about the attacks and their aftermath. “After primarily offering empathy and comfort in The Rising (2002), Springsteen realized that America had betrayed many of its most important ideals, as revealed by songs like ‘Your Own Worst Enemy’ on the No. 1 2007 album Magic,” Garrett said. “Later novels in J. K. Rowling’s Harry Potter series, the most popular fictional narrative of all time, introduce questions of torture and terror, and powerful TV dramas like Battlestar Galactica and the British import Doctor Who also criticize the choices made by the American government and its allies.” Zombies and the Apocalypse Perhaps the most significant byproduct of 9/11 in our culture is the resurgence in apocalyptic stories such as 28 Days Later, Sean of the Dead, The Walking Dead, Game of Thrones, World War Z and The Road, Garrett said. Stories about the Zombie Apocalypse – whether in games, books, comics, TV or movies – asked serious questions about what it means to be human, and about what moral compromises a person might be willing to take to stay alive, Garrett explained. They also reflected the new 24/7 sense of encroaching menace that “seeped into our culture and lit up our phones at all hours of the day and night.” “You could fight all day every day against this menace, these creatures who look like humans but seek your destruction. And then the next morning, you still have to rise and confront it again,” Garrett said. ‘Not too late’ “People 20 years ago said that 9/11 changed everything, and so it did.” Garrett said. “But 20 years later it is not too late to recognize that the fears those attacks brought to the surface don’t have to be the way we continue to live. In my faith tradition, Jesus constantly admonishes his followers not to be so afraid. We make bad and selfish decisions out of fear. We abridge hospitality, compassion and liberty when we believe we are endangered. That’s not the America I grew up in, and it’s not the America in which I hope to die. That America, the light of the world, the city on a hill, Lady Liberty lifting her torch to welcome all, is the America that our founders dreamed, and that we can dream once again.” ABOUT GREG GARRETT, PH.D Greg Garrett, Ph.D., is a professor of English at Baylor University and Theologian-in-Residence at the American Cathedral of the Holy Trinity in Paris. An award-winning professor, Garrett has written about 9/11 and its aftermath in a number of books, including One Fine Potion: The Literary Magic of Harry Potter (Baylor University Press), Living with the Living Dead: The Wisdom of the Zombie Apocalypse, and A Long, Long Way: Hollywood’s Unfinished Journey from Racism to Reconciliation (both Oxford University Press). ABOUT BAYLOR UNIVERSITY Baylor University is a private Christian University and a nationally ranked research institution. The University provides a vibrant campus community for more than 19,000 students by blending interdisciplinary research with an international reputation for educational excellence and a faculty commitment to teaching and scholarship. Chartered in 1845 by the Republic of Texas through the efforts of Baptist pioneers, Baylor is the oldest continually operating University in Texas. Located in Waco, Baylor welcomes students from all 50 states and more than 90 countries to study a broad range of degrees among its 12 nationally recognized academic divisions. ABOUT THE COLLEGE OF ARTS & SCIENCES AT BAYLOR UNIVERSITY The College of Arts & Sciences is Baylor University’s largest academic division, consisting of 25 academic departments and eight academic centers and institutes. The more than 5,000 courses taught in the College span topics from art and theatre to religion, philosophy, sociology and the natural sciences. Faculty conduct research around the world, and research on the undergraduate and graduate level is prevalent throughout all disciplines. Visit baylor.edu/artsandsciences.
A severe frost in Brazil has damaged coffee crops, prompting an increase in global coffee prices. According to Reuters, arabica coffee prices have surged to the highest level in almost seven years. "But coffee is grown all over the world, and smart coffee buyers will be able to adapt by finding new sources to replace the lost supply in Brazil," says Daniel Reichman, an associate professor anthropology at the University of Rochester. "Brazil’s losses will benefit coffee growers in places like Colombia and Central America." Reichman explains that the coffee market is segmented between large scale buyers that have sophisticated hedging strategies to deal with risk, and small scale roasters that might have a relationship with single farms. Reichman, who has researched the coffee-growing economies in both Central America and South America, wrote about "big coffee" in Brazil for The Journal of Latin American and Caribbean Anthropology. His upcoming book is titled Progress in the Balance: Mythologies of Development in Santos, Brazil. It's a study of political and economic transformations in the city of Santos, which has been the hub of the world coffee trade for more than a century.
Brexit: UK services are losing out to EU rivals – but Asia could be big winner
"Seven months after Britain’s exit from the EU, the chilly effects on UK trade are being felt. Total exports of UK goods and services were down by 13% (£36 billion) and imports down 22% (£66 billion) for January to May 2021 compared to the same period in 2019." Professor Jun Du, Aston Business School Singapore looks like one of the big winners from Brexit. joyfull In a separate new ONS report into UK services, exports and imports fell 12% and 24% in the first quarter of 2021 compared to the same period in 2019. To some extent this is due to the pandemic, but the decline with EU countries was more severe (exports down 15% and imports by 39%), which suggests Brexit was relevant too. The difference between services exports to EU and non-EU countries was particularly marked in sectors like construction (-43% vs +24%), maintenance and repair (-62% vs +11%), and manufacturing services (-40% vs -12%). It seems to confirm that the UK’s services offering has been made less competitive by the EU-UK Trade and Cooperation Agreement hardly covering such business. This has left EU members free to decide whether to allow different UK providers into their markets. But as we shall see, other services exporting countries outside the EU may also benefit as a result. In our recent paper, Ireland looked like the big winner. It has probably benefited from firms relocating and business being re-routed from the UK, not to mention low corporation tax and a young well-educated workforce. Between 2016 and 2019, Ireland’s services exports rose 24% (that’s €144 billion or £123 billion), driven by financial services, IT and transport. Speculation still abounds about which other EU cities will benefit in the medium term. Amsterdam surpassed London as Europe’s largest share-trading centre in January by absorbing much trade in euro-denominated assets, though London has been back on top recently. Other potential winners include Frankfurt (banking), Luxembourg (banking and asset management) and Paris (financial, professional and business services). Even a less serious contender like Berlin can attract tech talents thanks to its culture clusters and affordability. On the other hand, most financial traders have so far remained in London. The city is still strong in hosting stock market flotations and other forms of capital raising. And the flow of financial jobs out of London has been a fraction of what remainers predicted. A four-year regulatory transition period for areas like data protection and electronic trade will undoubtedly be helping. London vs EU rivals is only half the story. James Padolsey/Unsplash, CC BY-SA Yet all this misses a bigger picture, namely that Europe’s ability to provide services may have been weakened overall. Imagine a group of US investors wants to invest £1 billion in European shares and other financial assets. In the past it might have set up a fund in London, making use of the city’s network of lawyers, accountants, bankers and other finance professionals, while filtering some of the work to specialists in, say, Paris and Frankfurt for issues related to France and Germany. But now Brexit means the fund can’t invest in certain EU securities from London. The investors would have to set up a second fund in, say, Dublin to get exposure to all the EU assets they want. The additional expense and time involved makes them decide it will be more lucrative to set up an Asia-focused fund in Singapore instead. When you multiply this effect across every sector, it is potentially huge. Certainly some investors will decide to either switch attention from the UK to EU countries, or to live with the extra cost of doing business across both the UK and EU. But others are deciding that an opportunity somewhere else in the world now looks more attractive. The danger is that this adds up to a global shift in economic weight over time. In fact, we could be seeing signs of this already. Winners and losers In follow-on research that we have yet to publish, we have been analysing the services exports of the major service providers in Europe and globally, using trade data jointly collected by the World Trade Organization (WTO) and the Organisation for Economic Cooperation and Development (OECD). The data shows the UK was and is the biggest services exporter in Europe and second only to the US worldwide, but appears to have been losing ground since Brexit. Ireland and the Netherlands are the major growth stories in Europe, while China, India and Singapore are leading the way elsewhere. Services exports by country, 2019 vs 2015 Trends in services exports. Left: 2015 data in solid coloured bars; 2019 change in yellow markers. Right: Green bars represent accelerating service growth; red bars represent decelerating growth. BaTIS The UK’s services growth trend fell 11% in the 2016-2019 period compared to 2010-15. This backs up our recent published research finding that the UK’s global share of exported services fell from 8.9% in 2005 to 7% in 2019. Meanwhile, France, Spain, Italy and Belgium’s growth has also been declining, while Germany, the Netherlands, Switzerland, Luxembourg, Austria and also the US were static. Ireland was the fastest growing services exporter among all, but Singapore and India gained momentum too. Strikingly, we see increasing growth in Asia between 2016 and 2019 in sectors like travel, financial, IT and creative services. This includes extraordinary growth in Singapore in finance, business, insurance and pension provision, and also in China in numerous segments. It looks like nothing short of a boom. Shanghai has been on the up and up. Krzystsztof Kotkowicz, CC BY-SA This may partly reflect the industrial transformation taking place in the Asian developing world from manufacturing to services. It may also capture a long-term shift of services centres from the west to the east – a reshuffle on a truly global scale. But at the same time, it’s evidence that Brexit has weakened the UK as the European centre for services. Yes, business shifted to Ireland (and Luxembourg) to some extent, but that could be hiding a wider collective setback. The question for the years ahead, for the UK and its European services peers, is whether they can come up with arrangements that help maintain their collective strengths – and to what extent they can exploit opportunities elsewhere, particularly on developing countries, where US services providers have traditionally been far ahead. This article was co-written by Professor Jun Du and Dr Oleksandr Shepotylo.
Gas boiler ban: how to make sure everyone can afford low-carbon heating
Most of us only think about central heating when it stops working or when the fuel bills arrive. So reports of an impending ban on gas boilers in the UK – and news that green alternatives such as heat pumps can cost over £10,000 – might have been a nasty shock for many. Most UK households rely on gas boilers, which are more efficient than ever, but still burn fossil fuels. As a result, domestic heating accounts for over a third of greenhouse gas emissions and almost half of energy consumption nationwide. Tackling climate change means changing how we heat our homes. But this is possible without turning warmth and comfort into unaffordable luxuries. Our research has looked at how business models can break this trade-off between people and the planet. One involves reimagining heating as a service. When buying a boiler, a customer typically pays someone to buy and install it. They then sign a contract with an energy company to provide the fuel and find another service provider to fix the boiler when it breaks down. Wouldn’t it be simpler to sign one contract with one company that could guarantee a steady supply of heat? A manufacturer would be responsible for installing the heating system and for ensuring it works. Since the manufacturer would be paid for delivering heat, you wouldn’t be billed for repairs or have to pay steep upfront installation costs – you’d simply have to keep up with flat monthly payments. By aligning the objectives of all parties, “heat as a service” allows the risks and rewards of investing in new technologies like heat pumps to be shared. Fuelling poverty Low-carbon technologies such as heat pumps can go a long way to achieving net zero targets. Unlike a boiler, heat pumps move heat from warm to cold spaces rather than generate it, operating in a similar way to air conditioning. Heat pumps run on electricity and can reduce greenhouse gas emissions if their power comes from low-carbon sources. Waste heat from sewage plants and other facilities can even be redirected to supply home central heating systems with the right infrastructure, such as district heat networks. But most UK homes have gas on tap, and new heating technologies are expensive to install and manage. Much of the required infrastructure needs to be funded. Heat pumps decarbonise home heating by replacing fossil fuel burning boilers. I AM NIKOM/Shutterstock Over two million households in England suffer from fuel poverty. This means that paying fuel bills would leave them with nothing left over for food and other necessities. More efficient, low-carbon heating can bring those bills down, but when faced with the decision to heat or eat, is it fair to expect people to invest in expensive technology? If these technologies are unaffordable, can we hope for the needed revolution in domestic heating? The slow adoption of rooftop solar panels and electric cars demonstrates what a hard sell these technologies can be for cash-strapped consumers. Technology is not enough. Instead, we need to change the business logic for bringing technology into our homes. Heat as a service Digital technology has made it easier for almost everything we use, from music to cars and clothing, to be delivered as a service. Record stores selling albums now compete with online streaming services which offer a vast library of music ready to be played with a monthly subscription. Taxi drivers and car dealers have had to adjust to ride-sharing services and even fast-fashion companies are now threatened by online rental services, which help old clothes find new purpose. Businesses offer software as a service and even manufacturing as a service, which take away the need for upfront investment and unexpected bills and allow customers to access and pay for what they need with a single fee or subscription. Heat as a service does something similar by cutting out the complexity of installing, maintaining and fuelling a boiler or heat pump. In the winter of 2017, over 100 UK homes were offered a heat plan, which guaranteed an indoor temperature for an arranged monthly fee. Customers often struggle to keep track of how much they spend on heating, so the plan offered some peace of mind. The trial involved collaboration between local authorities, an energy company and a boiler manufacturer, plus digital tool providers that helped monitor and control the temperature. Most participants found they were more comfortable and were more likely to consider low-carbon heating on its own, and particularly as part of an arrangement like heat as a service. Paying for heating technologies that are kinder to the planet is likely to be too expensive for lots of people. Relying on households to make these preparations on their own would also be disastrous for decarbonisation. A recent report by the International Energy Agency forecasted that less than 5% of the total emissions reductions needed to reach net zero by 2050 can be expected to come from such behaviour changes among the general public. Rather than expecting households to buy heat pumps, states and energy utilities should offer them low-carbon heating as a service. This article was co-written by Ahmad Beltagui, Andreas Schroeder, and Omid Omidvar, of Aston University
