Video: Social Entrepreneurs: Pioneering Social Change

What is social entrepreneurship? It is a kind of entrepreneurship, so the first idea in my mind before I read any reference about social entrepreneurship was a company which contributed to society, and solves social problems, e.g. poverty and healthiness.

An entrepreneur, in my mind, is someone who owns a company and makes money. However, social entrepreneurs are different. They use their own power to change the world.

Social entrepreneurs, instead of calling them just entrepreneurs, have deep a perception of the future. “Rather than leaving societal needs to the government or business sectors, social entrepreneurs find what is not working and solve the problem by changing the system, spreading the solution, and persuading entire societies to move in different directions.“ They are pioneers in their field, providing their power to change society to bring positive effects.

I heard  Muhammad Yunus, the father of micro-finance, before when learning about globalization in economics. Microfinance is a way providing loans to low-income groups who have no access to capital funds with a lower interest rate. It mainly targets groups who are in poor but have a good credit for this loan. People who are extremely poor are not in this consumer segment; they should be supported by the government. However this micro-finance helps many people, especially in South Africa, to get out of poverty as they have an opportunity to start their own small business. Regardless of its drawbacks, micro-finance, to some extent, addresses a world social issue — poverty.

Reference list:

Video: https://www.youtube.com/watch?v=jk5LI_WcosQ#t=497

“Rather than leaving societal needs to the government or business sectors, social entrepreneurs find what is not working and solve the problem by changing the system, spreading the solution, and persuading entire societies to move in different directions.“

https://www.ashoka.org/social_entrepreneur

News’ title: Canada, China sign currency deal aimed at boosting trade

http://www.cbc.ca/news/politics/canada-china-sign-currency-deal-aimed-at-boosting-trade-1.2828707

http://ecocidealert.com/?p=8154

I would like to post this news because I am an international student from China. I am concerned with the exchange rate between Canadian dollars and RMB. And this news is related to the currencies’ exchange rate.

It is reported that “Canada and China have signed a reciprocal currency deal that’s expected to dramatically boost exports”. The biggest beneficiaries are the Canadian and Chinese business communities. Because this proposal allows them to save the exchange cost, to trade directly with Canadian dollar and Chinese Yuan, usually these two currencies would change to the US dollar first, then change to the other.

This is a political and economic opportunity. With lower exchange costs, businesses would be more likely to do import or export between these two country, which is good for economic growth in both countries. 

According to the data provided by the Bank of China, the Canadian dollars’ exchange rate is 541.59 at 00:00:05, Nov. 09, 2014, Beijing time. Compared to the exchange rate in last summer, about 572, it has been reduced by 5.3%. As the Chines yuan appreciates, Chinese customers would more like to buy Canadian goods and services, and travel in Canada, which would stimulate the economy in Canada.

Reference list:

“Accounting to the data provided by Bank of China, the Canadian dollars’ exchange rate is 541.59 at 00:00:05, Nov. 09, 2014 at the Beijing Time.”

http://www.boc.cn/sourcedb/whpj/

“Canada and China have signed a reciprocal currency deal that’s expected to dramatically boost exports”.

http://www.cbc.ca/news/politics/canada-china-sign-currency-deal-aimed-at-boosting-trade-1.2828707

YouTube is considering building a paid service that would allow customers to skip the ads on videos. This service targets the group who wants to avoid the ads and are willing to pay for this service. The ad-free service is one PoD of YouTube than the general video website. This service could increase the level that consumers satisfaction, increasing the value proposition.

However, will Youtube be profitable with this service? With this service, I think the value of the advertisement before the video itself would be reduced. If the service came out, fewer people would be willing to wait until the ads end; people who buy the service would definitely skip them. As fewer people would see the ads, why firms would choose to put their ads on YouTube’s video. Hence, I think the profit from advertising would be lower.

But volume would win. Since YouTube has a large customer market, the profit from selling the service may cover the loss from reducing advertising investment, or even exceed. As the CBC News reported, the popular online video service has grown to more than one billion users a month with ads paying for the content and the service. This service may be profitable because of its huge market. 

On the other hand, I am not familiar with Canadian online video services, so I do not know whether other websites offer this kind of service. But in China, it is common in the Chinese online video market; almost every online video website provides this service. Therefore, compared to the Chinese market, it is not a point of difference for Chinese consumers. However YouTube does not serve the Chinese market.

Reference list:

the popular online video service has grown to more than one billion users a month with ads paying for the content and the service. This service may be profitable in its huge market.

http://www.cbc.ca/news/business/youtube-considering-ad-free-subscription-service-1.2815960

LONDON — The British used-car auctioneer and reseller BCA Marketplace said on Tuesday that it had called off its initial public offering in London, the latest European company to delay or withdraw its plans to go public amid uncertain markets. (International New York Times, by Chad Bray, accessed Oct.23)

As the capital market is unstable, BCA put its plan off to raise capital from the public. This reflects one important determinant of the company’s decision-making, risk assessment.

Although the IPO could have helped the firm to raise investment capital earlier if BCA had not delayed its plan. Uncertainty in the equity market would influence the value of BCA’s shares. If the volatile market was just in recession when BCA came in, the demand for its shares would be low, so the total value would be lower than that it could be when the market is growing.

LONDON reported that “About a half-dozen I.P.O.s in Europe were withdrawn or postponed this month as new listings performed poorly in volatile markets.” Many companies continued to trade lower than the initial offering prices. This fact also has delayed BCA’s IPO plan.

Reference list:

1.  The British used-car auctioneer and reseller BCA Marketplace said on Tuesday that it had called off its initial public offering in London, the latest European company to delay or withdraw its plans to go public amid uncertain markets.

http://dealbook.nytimes.com/2014/10/21/used-car-auctioneer-bca-marketplace-calls-off-london-i-p-o/?ref=international

2. About a half-dozen I.P.O.s in Europe were withdrawn or postponed this month as new listings performed poorly in volatile markets.

http://dealbook.nytimes.com/2014/10/21/used-car-auctioneer-bca-marketplace-calls-off-london-i-p-o/?ref=international

3. picture

crop from http://www.british-car-auctions.co.uk/buy/Useful-information/BCA-Assured/

http://www.cbc.ca/news/business/tim-hortons-burger-king-reaction-u-s-cracks-down-on-tax-inversions-1.2774913

On 23 Sep, 2014, the merger of Tim Hortons and Burger King was doubted for tax inversion.

This news also introduces the definition of Tax Inversion. It cites that:“ A tax inversion works when a U.S. business merges with or is acquired by a foreign company in a country with a lower tax rate. The new company then pays most of its global taxes in the jurisdiction with the lower rate, thereby shielding profits from taxation they used to have to pay.( cbcnews  Sep 23, 2014)”(4)

According to the figures in the KPMG website, Canada’s corporation tax rates is 26.5% in 2014 while that is 40% in the United States.(1) And the Burger King’s revenue in the end of 2013 reached to $1,146.3 million USD while its net income reached to $233.7 million USD, which is searched from the financial statement in businessweek. (2)If the Burger King relocates it company to Canada, it can release a bulk of tax burden( roughly at $31.55 million USD).

This might be a strategy for the Burger King to cut its total costs and become more profitable.

However Obama urged for “economic patriotism”(3) from the U.S. companies, corporation inversion is still a common phenomenon in America.

Reference list:

(1)”Canada’s corporation tax rates is 26.5% in 2014 while that is 40% in the United States.” http://www.kpmg.com/global/en/services/tax/tax-tools-and-resources/pages/corporate-tax-rates-table.aspx

(2) “$1,146.3 million” & “$233.7 million”

http://investing.businessweek.com/research/stocks/financials/financials.asp?ticker=BKW

(3) “economic patriotism”

http://www.cbc.ca/news/business/tim-hortons-burger-king-reaction-u-s-cracks-down-on-tax-inversions-1.2774913

(4)”A tax inversion works when a U.S. business merges with or is acquired by a foreign company in a country with a lower tax rate. The new company then pays most of its global taxes in the jurisdiction with the lower rate, thereby shielding profits from taxation they used to have to pay. ”

http://www.cbc.ca/news/business/tim-hortons-burger-king-reaction-u-s-cracks-down-on-tax-inversions-1.2774913

http://www.thestar.com/opinion/commentary/2014/09/07/is_parttime_work_the_new_normal_goar.html

Canadian labor market shows a sign of part-time employment. Since last autumn, Canada has created 50,000 part-time jobs but lost 20,000 full-time positions.

Doing a part-time job may has some negative impacts for labors. For example, they may not be offered the health insurance by the employers. So there is less work security. And part- time workers are always regarded as unemployed. They do not claim to government that they get jobs, however they are part-time. So government grants the unemployment welfare to them, and they do not need to pay taxation. Hence, there is a large withdraw in government budget balance.

On the other hand, the part- time jobs usually need low skill levels, so the work may be low productivity. With an 50,000 increase in part-time jobs but 20,000 decline in the full-time, the national total productivity might be pulled down.

However, it does have some positive aspects. As mentioned above, part-time jobs require low skills, and it is capable for most of workers. So it can release the unemployment pressure to some extent, while full-time jobs need high level of skills and knowledge. And in statistic, it does work, the unemployment rate does decline which shown on the picture.

according to the Statistics Canada:
And what if retirees do the most of increased part-time jobs? They might be more productive and have more experience than freshmen. So the national productivity would increase and the market allocates resources more efficiently.

reference list:

news from:http://www.thestar.com/opinion/commentary/2014/09/07/is_parttime_work_the_new_normal_goar.html

chart: http://www.statcan.gc.ca/daily-quotidien/140905/dq140905a-eng.htm?HPA