Tuesday, January 20, 2015

CEOs 'less optimistic' on economy; Solving housing crisis through 3-D printing; Winners and losers in China's slowdown

1 CEOs ‘less optimistic’ on economy (Emily Young on BBC) Chief executives are less optimistic about the economy this year than last, a survey unveiled at the World Economic Forum suggests. PwC's annual survey shows that just 37% think the economy will improve in 2015, down from 44% last year.

Perhaps unsurprisingly, Russia's bosses have gone from the most confident to the least, due to problems caused by sanctions and the falling oil price. In the UK, concern had risen sharply about the availability of talent.

The number of chief executives concerned about the skills gap rose from 64% last year to 84% this year. That is considerably higher than in Germany, France or Spain. This was partly put down to the high level of employment in the UK, which means that there is a smaller pool of workers to choose from, and partly due to concerns about the education system.

On a global level, the biggest worries that chief executives have are geo-political uncertainties, over-regulation and cyber security. Chief executives ranked the US as their most important market for growth over the next year, putting it ahead of China for the first time in the five years that the question has been asked.


2 Solving housing crisis through 3-D printing (Alastair Parvin in The Guardian) Since the Industrial Revolution the assumption has always been that the only people who can build homes at scale are large organisations – either state or market – building whole estates; rows of one-size-fits-all boxes for imaginary “average” humans. Form follows finance.

The hidden flaw is that in the “current trader” model, the houses built by property developers are not actually designed as places to live, but as financial assets; to be sold to the mortgage lending market. The term “housebuilder” is actually a little misleading. A better description might be “land developer” a company that buys land and seeks to resell it with a 20% margin for its shareholders.

In other words, traditional property developers cannot solve the housing crisis, because they are almost perfectly designed not to. So who can? Unlike property developers, custom builders (individuals or groups who buy land and procure a home for themselves as a place to live) can usually procure their homes at a fraction of the equivalent property market cost. They can also break the cycle of community resistance to new, topdown developments.

Our first step might be to develop open source tools and platforms that radically simplify the process of planning, designing and constructing customised, high performance, sustainable, low-cost homes, and to put those tools into the hands of citizens, communities and businesses. That is the aim of the WikiHouse project, an open source construction system that allows online self-build models to be shared, improved, 3D printed and self-assembled.

But we also need to reform the land market, to make it dramatically easier for those without much capital to buy a plot of land and commission their own homes – either individually or as a group. There can be a parallel land market that differentiates between a house built as a speculative asset, and a house built as a place to live. Let’s create space for both, and see which works. That is the real economic shift that citizens, with open tools and data will bring to housing.


3 Winners and losers in China’s slowdown (San Francisco Chronicle) China's economy, the world's second largest, grew 7.4 percent last year, its slowest expansion in nearly a quarter century. Forecasters expect growth to wane further in the next several years. The IMF predicts growth of 6.3 percent in 2016, a dramatic shift from double digit rates in previous years that is creating winners and losers.

The losers: Industries that profited from China's building boom are being battered by the ruling Communist Party's effort to reduce reliance on investment and nurture more sustainable growth based on domestic consumption. Developers are losing access to credit and building permissions. Suppliers of steel, copper, cement and other building materials have seen orders dry up. That has wiped out jobs in construction and real estate sales and sent shockwaves abroad, hitting countries as far away as Australia and Brazil that export iron ore and other commodities.

As explosive growth in auto sales cools, China's domestic brands are losing market share to global rivals and their state-owned manufacturing partners. Sales of cognac, Swiss watches, designer clothing and other luxury goods have been hurt by a ruling party campaign to rein in corruption and official extravagance. So has revenue at upscale restaurants and Macau casinos.

The winners: Big winners straddle the worlds of technology, private business and consumer brands — areas communist leaders want to promote as new sources of growth. E-commerce giant Alibaba Group's revenue rose 54 percent in the quarter that ended in September. Revenue for rival JD.com jumped 61 percent. Milk producer Modern Dairy Ltd.'s revenue rose 86 percent in the six months ending in June. Novice entrepreneurs in some areas are benefiting from rule changes meant to make it easier to set up barber shops, restaurants and other small businesses.

Energy-intensive industries including trucking benefit from the slump in global crude prices. E-commerce has produced unusual winners, including fledgling smartphone maker Xiaomi, which used Internet-based sales and marketing to slash costs and passed Samsung last year to become China's No. 1 brand by number of handsets sold. A stock market boom has brought a surge of revenue and profit to brokerages and finance firms.

The state industry: Government-owned companies in oil, steel, banking, telecoms and other industries still enjoy monopolies and other privileges, but the ruling party's plans, if carried out, will force them to compete. State-owned steel and aluminum mills are under pressure to make their operations cleaner and more efficient. Oil giant Sinopec Ltd. is looking at ways to use its thousands of filling stations to sell groceries and other goods.

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