The future of Transportation

In her Comm 101 Blog, Ingrid Bakke discussed driverless transit that is due to roll out in Switzerland by 2016. This project, carried out by BestMile, will revolutionize the transit industry. Miss Bakke analyzed some of the pros and cons of driverless transit such as the cost saving measures and potential accidents. I believe the biggest issue will be gaining public trust.

Opinions are mostly spilt when it comes to trusting driverless vehicles. This is the largest hurdle auto manufactures face as they attempt to sway public opinion into putting their lives in the hands of a machine. It will take a serious marketing campaign to get the public completely on board with autonomous cars. It appears the marketers job will be made a bit easier though as the data is on their side. Google’s driverless car has only reported 11 accidents after driving more than 1.7 million miles.

(Figure 1) Google’s self-driving car

 

(Figure 2) BestMile’s Self-driving bus

Unfortunately, consumers are not always rational and are more willing to take risks such as driving when they perceive having more control over the situation. BestMile has positioned itself nicely however, as consumers will be forced to try their product while taking public transportation. This government contract will prove to be a vital component in expansion for BestMile, as consumers will begin to see their product works safely and efficiently.

 

 

 

Media References

Figure 1: http://techfactsa2z.blogspot.ca/2013/04/driverless-car.html

Figure 2:  http://www.digitaltrends.com/cars/first-autonomous-buses-debut-in-spring-2016/

Company Culture

In a blog post by Michael Timms, he shares his experience at the Fenestration Association of BC 2015 Western Conference. Timms discussed the greatest problem in his industry with fellow managers and clients. That problem is finding quality employees and retaining them. Timms asked the following two questions to these managers.

  1. What do you want from your employees?
  2. What do you think your employees want from you?

The answers were generally sarcastic and poorly thought out. Timms believes most employee dissatisfaction stems from a lack of strong leadership from managers. Employees were likely to not care about their job and less likely to remain at their current company. He further argues that well managed employees are more motivated and productive. I however, disagree with Timms’ view of the problem.

In my opinion, the root of the issue is company culture. Creating an environment that employees look forward to coming to every day is vital for company success. When workers genuinely want to be working for a company they are far more likely to perform their job diligently and with great care. This will benefit the company overall and build a positive atmosphere in which to work.

(Figure 1) Twitter was ranked the #1 company in the United States for company culture by Forbes in 2014

Creating a positive culture starts with Human Resources so I believe that is where Timms should be looking to fix his industry’s problem. Through careful hiring practices and employee training, Timms will find his answer. Though these practices generally cost more initially, in the long run it will be every advantageous for the both the company’s image and income statement.

Media Resource

Figure 1: http://www.forbes.com/pictures/fjle45hlmi/no-1-twitter/

 

 

One for One Business Model

I disagree with the ‘one for one’ business model. Although the intentions are pure, it severely hinders progress in developing nations in the long run. Business should not focus on handing out goods and services in underdeveloped areas. When Western businesses do so, it undermines local businesses that are attempting to create and sustain value. This is not to say that successful companies in North America and Europe should not do anything to help developing areas; they should just rethink the way they help.

A far more beneficial technique would be to help early stage companies develop themselves. In this way, long term sources of revenue will be created through employment and the sale of goods. This is far more sustainable than giving goods such as shoes and glasses away because it ensures these products will be created and purchased in the developing areas. The critical part will be aiding in the establishment of the businesses in these communities. Although this process will be difficult, it is absolutely an essential component to help developing areas progress.

Aid can be provided more effectively through low interest, or even no interest financing, depending on how charitable the Western company chooses to be. In this way, businesses in developing areas will receive the chance to create value in their own community by providing employment opportunities and essential goods. Another beneficial aspect would be to assist in teaching and training locals in these developing regions. This way, many people would have access education to help create their business.

(Figure 1) Training leads to development

It is also important to realize that some donations will still be necessary. Health products that are otherwise unavailable in these developing areas will still be required donations for now. It will be substantially easier for a nation to develop with a healthy population that is able to work.

Media Source

Figure 1: http://www.slideshare.net/Monishaangel/training-development-32823092

Human Obsolescence

In Maria Starko’s Comm 101 blog, she discusses a restaurant in San Francisco that offers customers a dining experience without human interaction. In this way, the business owners cut down on wages by replacing workers with machines.

It seems like we are at a crossroads of employment. Machines are becoming inexpensive, sophisticated and readily available which makes for a convincing case to switch from humans to robots. It seems that the future could have a huge number of machines in positions once held by people. This could be positive or negative for the economy and it is difficult to judge what outcome it will have at this stage. On one hand, many basic jobs such as driving a delivery truck or working a cash register could be eliminated. Paradoxically, this will create an untold number of new jobs designing, building, servicing and upgrading these machines. There is no question that if machines took over most jobs, it would be disastrous for the economy. These machines will only be able to keep their job if the population has money to spend so maintaining a high employment rate is critical.

 

The vehicle manufacturing industry has already been largely automated (Figure 1)

I agree that the service industry will always have a place for humans to work. Part of the experience of being served is being treated well by another person which is not something one gets from a machine. Machines cannot adapt to changing customer needs and desires the way people can. A machine does not sympathise with a customer, it can only perform the task for which it was programed. People can understand the value of treating customers with respect and this is appreciated by consumers. For this reason humans will always serve a vital role in the service industry.

Media Reference

Figure 1: http://www.economicdevelopmenthq.com/blog/manufacturing-industry-spurring-development-in-southern-nevada/

Canada’s Aging Population

The Baby Boomers in Canada are beginning to enter their golden years and we must be prepared for the economic changes that will follow in the next few decades. An aging population affects not only the Baby Boomers, but Canada as a whole. The Canadian government and taxpayers must be ready for the influx in healthcare spending that accompanies a rise in the number of seniors. There will also be openings in careers with older demographics that need to be filled such as pilots, doctors and barbers.

Canadian Population Pyramid (Figure 1)

Seniors in Canada require the highest amount of healthcare spending. In 2001, seniors made up 12.6 percent of the population and required 43 percent of total healthcare expenditure. With the number of retirees set to climb in the coming decades, this number is expected to rise as well. An aging population also affects the economy in ways one might not think. The funeral industry will grow as the Baby Boomers get older and new jobs will be created as more seniors required someone to look after them. Canada also must prepare for an increase in the number of people receiving social security and living off pensions as more workers retire.

The job landscape in Canada will change as Baby Boomers retire as well. Thousands of red sealed tradesmen will be needed to replace current carpenters, plumbers and electricians. This will be more important than ever as many youth have chosen to go to university rather than pursuing an apprenticeship. Canada must encourage young people to consider choosing these fields as they will become very lucrative. Skilled tradesmen will be in high demand as the quantity diminishes.

It will be critical for Canada to be aware of the challenges it will face in the coming decades. Preparation must start now to avoid complications for seniors, and the workers they depend on in the future.

Media References

Figure 1: http://www.indexmundi.com/canada/age_structure.html

 

Tipping Point: The Beginning of the End for Tipping in North America

The Modern, one of Daniel Meyer’s thirteen restaurants in New York (Figure 1)

Daniel Meyer, the Chief Executive Officer of Union Square Hospitality Group, has come out with a long overdue plan. His thirteen restaurants in New York have introduced a “no-tipping” policy and will see a slight price increase in menu items to compensate for the change. The rational for this idea is that a guest’s restaurant experience is a team effort, but under the current system only the front-of-house staff is compensated for their effort. With this new method of billing, workers are compensated far more evenly for their work, rather than the lion’s share of money going to servers.

The new system is beneficial for all parties involved. Owners are able to find experienced line cooks and head chefs that are attracted by the higher wages offered to back-of-house staff. The dining experience is increased through higher quality food and most importantly eliminates the awkward exchange that many dread; calculating an appropriate tip to leave when the cheque comes at the end of the meal. Servers also no longer need to fear a cheap guest in their section because the server will be making a living wage no matter what.

Unfortunately for British Columbia, we are not ready for this change. David Jones tried to implement this policy at his Vancouver Island restaurant in 2014 but was forced to reintroduce tipping after three months due to customer backlash. As someone who has worked in the service industry I can attest, it is time we do away with tipping.

Media Reference

Figure 1: http://www.newyork-guide.net/the-modern-restaurant-new-york.html

 

 

Beer Brands Merger

If InBev and SABMiller merged, the five above brands would be among the many iconic beers all owned by the same company. (Images via Shutterstock)

Five brands that will be a part of the Anheuser Busch InBev and SABMiller merger

 

In a recent merger, SABMiller was bought by Anheuser Busch InBev for 106 billion U.S. dollars. This merger creates the largest beer manufacturer in the world and will comprise 31 per cent of the global beer market. The closest competitor to that number is Heineken, with a mere 9 per cent market share. This deal is expected to come with scrutiny from the public as it causes a dramatic decrease in competition.

In theory, this massive conglomerate will benefit from economies of scale as they will be producing beer at an unprecedented level. These savings could be passed on to the consumer in the form of lower prices but it is also a possibility this will result in a less competitive market. That would mean higher prices for beer drinkers as competition decreases and alternatives disappear. When a company has such a large share of the market, there arises a fairly large barrier to entry. Setting up a brewery is a difficult process that requires a large amount of capital, machinery and goods such as hops and barley. I think this could also cause consumers to turn to smaller, local breweries such as Granville Island Brewery in Vancouver. Some consumers will be more inclined to support small businesses, especially because some of these beers can market themselves as trendy and different. Beer is becoming less popular of a choice for Canadians as an alcoholic beverage already, as it has seen its share of the alcohol market deplete from nearly half in 2003, to 43 per cent in 2013.

It is possible that governments will not approve the sale as it will give such a large share of the beer market to Anheuser Busch InBev. The U.S. Justice department is reportedly investigating the merger to determine if it would limit competition too much for approval.

Media Reference

http://www.theblaze.com/stories/2014/09/15/one-company-could-soon-own-almost-every-beer-you-know-and-love/

 

North American Free Trade At Risk?

File:NAFTA logo.png

Figure 1

 

With primary election campaigns underway in the United States, candidates are already starting to make bold promises. It may be easy to watch from north of the 49th parallel thinking none of it really matters for Canadians; this however, is not correct. Businessman turned politician, Donald Trump is gaining traction among voters. One statement of note for Canadians is his position on the North American Free Trade Agreement, or NAFTA for short, which he may cancel if elected or at least renegotiate. This could be disastrous for both Canadian and Mexican manufacturers that rely on exporting their goods to the United States.

If high tariffs are added to goods manufactured in Canada and Mexico, it may become impossible for businesses to stay profitable. Canadian markets just don’t have the size needed for many manufacturers, and closing off the massive U.S. market would be very detrimental to many companies. NAFTA has been responsible for greatly boosting trade between Canada, the United States and Mexico with $337 billion dollars of trade between the 3 countries in 1993, before NAFTA was ratified, up to $1.182 trillion in 2011. Moving towards protectionism in the United States would in theory, keep jobs in the country. This would come at the expense of Canadian and Mexican businesses, forced to close because it was no longer profitable to export to other North American nations. The United States has to think carefully of the consequences for business owners and workers across North America before making a rash isolationist decision.

NAFTA has caused a rise of employment in North America by nearly 23%, and the benefits of this agreement are not limited to Canada and Mexico. U.S. based companies such as Caterpillar Inc., and Mary Kay Inc. have seen sales skyrocket thanks to the North American Free Trade Agreement. Politicians may critique this international agreement in order to gain political points, but it has truly helped countless people across North America.  

Media References

Figure 1:

https://commons.wikimedia.org/wiki/File:NAFTA_logo.png

Work Week Efficiency

In a recent article by Ananya Bhattacharya, the concept of a 6 hour work day in Sweden is brought up. I found this is a fascinating idea from both an employee prospective, and a managerial one as well. For managers, this can be thought of as a negative because it means getting less production out of their workers. It may in fact have the opposite effect, as employees will feel less fatigued at work and thus improving their productivity.

Figure 1

Knowing that their work day isn’t as long and daunting can boost the morale of individual employees and have a great effect on a company’s performance overall. For fulltime employees, reducing the work from 40 hours to 30 would be desirable because it means they get to go home to their personal lives sooner and have more time to take care of themselves. In theory this means an employee can be productive in their time at the office. It extends beyond more personal time however, as a study published in the American Journal of Epidemiology found longer work weeks were linked to an increased risk of coronary heart disease.

 It seems like changing to a shorter work week would have great benefits for a while, but in my opinion these benefits would not last long. Once an employee became accustom to a 6 hour work day it loses its novelty. Then it becomes just like any other day and an employee is likely to lose that efficiency gained from a shorter work day. It might be worth trying 3 to 4 days of the week as a typical 8 hour day, with the rest being shortened and see how productivity changes over time.

Media Resources:

Figure 1

http://www.elainebaileyinternational.com/wordpress/2013/08/why-are-you-working-long-hours-and-feeling-exhausted/

 

 

 

Dieselgate

It has recently come to public attention that Volkswagen, a car manufacturer known worldwide, has been cheating the system. They outfitted many of their diesel cars with devices designed to pass government emissions standards, while knowing their cars should not be passing these tests. It also appears that this was no mistake and Volkswagen was explicitly cheating. These allegations are serious and if upheld, should be extremely detrimental to the company.

Figure 1

 

Simply from a financial prospective, they could face up to 18 billion dollars in fines but that may not even be the most detrimental loss. Brand reputation is going to be hurt badly and for a consumer’s prospective, they may start to question if Volkswagen products can be trusted. Shares have already taken a downturn, falling 18% in the wake of the scandal.

It seems Volkswagen expended too much effort in to developing technology that could detect when it was being emissions tested and skew results, rather than finding a way to just reduce the emissions. The effects of this scandal aren’t only going to be felt at Volkswagen however, as independent auto dealers and car owners will have trouble selling these cars. It is a shame that a once reputable auto manufacturer chose such a lazy approach to their emissions problem, as there are countless people affected by this; from shareholder, to retailor and consumer, and the general public as well.

References

http://www.theglobeandmail.com/report-on-business/international-business/european-business/how-a-minor-emissions-experiment-put-volkswagen-in-hot-water/article26506954/

http://www.bbc.com/news/business-34311819

http://www.usatoday.com/videos/news/nation/2015/09/26/72878852/

Media Sources

Figure 1:

http://www.nytimes.com/interactive/2015/09/22/business/international/vw-volkswagen-emissions-explainer.html

and

https://johnib.wordpress.com/tag/type-ea-189-engines/