Saturday, August 22, 2015

How slowdown could spread to Brics and beyond; PC sales slide hits HP; Five motivations for entreprenurship

1 How slowdown could spread to Brics and beyond (Larry Elliott & Phillip Inman in The Guardian) Financial markets ended last week in panic mode as fears emerged that the world was about to enter the next phase of the crisis that began eight years ago in August 2007. Back then, the problems began in the developed world – in American and European banks – and spread to the rest of the world. The bigger emerging markets – China and India most notably – recovered quickly and acted as the locomotive for global growth while the west was struggling.

There was talk of how the future would be dominated by the five Brics countries – Brazil, Russia, India, China and South Africa – and by 11 more emerging market economies, including Turkey, Indonesia, Mexico and Nigeria. That has happened. Emerging market countries are dominating the news – but for all the wrong reasons. And because, after years of rapid growth, they now account for a bigger slice of the global economy, a crisis would have more serious ramifications than in the past.

Emerging markets have a habit of causing trouble. For a quarter of a century after the Latin American debt crisis erupted in Mexico in 1982, the story was of a storm moving from the periphery of the global economy towards its core, the advanced nations that make up the G7. Mexico ran into fresh problems in 1994, there was an Asian debt crisis in 1997, and a Russian default in 1998 before the dotcom bubble burst in 2001. That proved to be a dress rehearsal for the near meltdown of the global financial system in 2007-08.

Now the focus is back squarely on emerging markets. The problem is a relatively simple one. In the post-Great Recession world, the tendency has been for all countries to try to export their way out of trouble. But this model works only if the exports can find a home, as they did when China was growing at double-digit rates.

But in the past 18 months, the Chinese economy has slowed, causing problems for two distinct groups of emerging market economies – the east Asian countries that sell components and finished goods to their big neighbour, and countries that supply China with the fuel and raw materials to keep its industrial machine going.

China’s slowdown and the devaluation of the yuan will also have an effect on two other groups of Asian countries. Low-cost manufacturers, such as Vietnam, will eventually find it harder to compete, and more advanced economies – including South Korea and Taiwan, which provide components to Chinese manufacturers – will see demand for their exports decline.

2 PC sales slide hits HP (BBC) Technology giant Hewlett-Packard has reported falling profits and revenues as sales of personal computers fall. For the three months to 31 July, HP said net income fell to $854m down from $985m a year earlier.

Total revenue fell 8.1% to $25.35bn, with revenues at HP's personal computer and printer business down 11.5%. Later this year, HP is due to split into two, separating its computer and printer business from its corporate hardware and services operations. The split is part of a radical restructuring plan, which has already resulted in tens of thousands of job cuts in recent years.

Revenues at HP's personal computer business were down 13%, with revenues from sales to consumers down 22%. HP also gave a full-year profit forecast that was largely below what analysts had expected.

3 Five motivations for entrepreneurship (Larry Alton in San Francisco Chronicle) Why would anybody want to go through with the ordeals of entrepreneurship? It’s because, despite the hardships of the experience, there are nuggets of joy and satisfaction that can be derived from it and, at the end of the tunnel, if you’re committed enough, is a substantial reward. There are five main motivations that drive most entrepreneurs:

A. Money. You can deny it all you want, but the vast majority of entrepreneurs get into the game at least partially because of the potential to make lots and lots of money. There’s nothing wrong with pursuing money, but if the allure of wealth is the only thing driving you, you risk becoming frustrated if you don’t turn a profit in the first few years.

B. Flexibility. Some entrepreneurs venture out on their own because they’re tired of the demands of traditional work. Just be aware that entrepreneurship is extremely demanding, especially in the early stages of growth, so working your own hours doesn’t always mean working fewer hours or working under less stress. In fact, many people find that they work harder, longer, and under tighter constraints as entrepreneurs than they did as workers -- but it’s still rewarding.

C. Control. The desire for control drives many entrepreneurs who aspire to attain a leadership position. When you’re the boss of your own organization, you’ll get to call all the shots, from who gets hired and at what salary to what new strategic directions your business heads down.

D. Teamwork. Some people love working with others. They like the atmosphere of team-based creative problem solving, the interactions between mutually respectful, intelligent people, and the thrill of succeeding together. As an independent entrepreneur, you’ll choose your strategic partners, your mentors, your core team and even your first round of subsequent employee hires. That means you’ll get to pick the skill sets, talents and personalities you want to work with, and you’ll never have to worry about working on a team that you don’t like or can’t be productive with.

E. Legacy. Some entrepreneurs aren’t in it for the money or the experience as much as they’re in it for a lasting legacy. They might want to become the face of a brand and earn a taste of fame along the way. They might want to leave behind something that appreciates them.

Hopefully, you’re motivated by more than one of them—the more driven you are, the less intimidated you’re going to be when the inevitable challenges pop up along your journey. Before you dive into the world of entrepreneurship, think carefully about what it is, exactly, that you want out of the experience. Understand your own motivations before you get involved; you’ll find yourself more satisfied in the long run.

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