Archive for September, 2008


German gender wage gap

Tuesday 30 September, 2008

I caught this article by Sarah Plass in the Chicago Tribune Wage gaps frustrate German women which illustrates the plight of female workers in Germany.  In some ways, it’s little different from other countries, but for such a highly developed economy, it is still a bit of a surprise.  Women earn 24 % less than men who do the same work, a gap exceeded only in Cyprus, Estonia, & Slovakia, company Germans are not used to keeping.  The European average is 15.9%.  US & European statistics are not comparable because the Americans count only full-time workers while the Europeans include part-time workers.

When I lived/worked in Germany @ Deutsche Bank & Siemens, I could see that women were not treated as equals in the workplace & apparently that has not changed.  I kept in touch with a colleague from the bank & she left shortly after I did.  A colleague of mine from Siemens fairly consistently bemoaned the opportunities for women there.  I believe she had a child & left the company.  I’m surprised that the German government hasn’t done more to assure equality.  In many ways German society tends more towards the middle, so it’s inconsistent that the government doesn’t do more to that end.  Given the low birth rates in Germany, it’s even more startling that they don’t do more to encourage bigger families.  It still surprises me that in some ways, both professional & personal relationships are still quite old world in the old country, despite all of the advances in technology, business culture, etc.

Their neighbors to the north seem to be doing a much better job in this area.  I was involved with a woman in Denmark & it was easy to see women were equals to men when they held some jobs we typically associate with men, simply because of the worker shortage, they have to.  1 of the things I liked when I spent about 6 months in Sweden was that women were on par with men @ work.  Again, market circumstances dictate there.


Romanian Energy presentations

Saturday 27 September, 2008

I attended this event hosted by the Romanian trade commissioner’s office which focused on opportunities with energy companies from Romania. Challenges facing Romania, like many other countries, are CO2 emissions, finite fossil fuels, & increasing demand which increases import dependency.  Known reserves will be depleted in 20 years.  Solutions are renewables, nuclear, clean coal, & diversifying supplies.  Limiting consumption while increasing storage capacity & energy efficiency will help.

A minister from Romania’s energy ministry made a presentation included here: romanianministry Electricity was liberalized in July, 2007 so that there are now no restrictions in participating in Romania’s electricity market.  Future investments will be made to privatize small hydroelectric plants & finish in-process & build new nuclear power plants.

Special provisions are being made for renewable energy, such as wind power.  The presentation highlighting those can be found here: anre_-renewable_2008_prez Green certificates generated a number of questions.  There are mandatory quotas to buy green certificates, which creates a competitive international market for them.   Their economic benefits can be passed on to supply-chain partners.

Here’s the last presentation that was made that morning: romaniapresentationseptember-2008 Transgaz, Europe’s #1 natural gas transit/transmission company, was established in April, 2000, but still state-owned.  Rehab & modernization are in-process.  Romania is in compliance with EU 2001 directives.  Long-term (10-15 year) sales agreements are possible, but not mandatory.  Investors must find buyers for that term.  If the quota is exceeded, the surplus can be sold with a certificate of origin.  Co-financing is available to companies as an incentive from the government to invest.  There are opportunities for US exporters to send over technical equipment to improve these infrastructure projects.


how are GDP numbers calculated?

Wednesday 24 September, 2008

As a recovering economist, I read with interest this article by Ellen Simon in the Chicago Tribune Economists not buying revised GDP. The main premise is that the means to acquire this data is underfunded, which leads to inaccuracies & wild swings in the data as revisions come out.

How national economies are valued has changed over time, from when Gross National Product (GNP) was revised to become Gross Domestic Product (GDP) to reflect changes in services & imports/exports.  Economics is riddled with assumptions, so I don’t think that’s really the issue.  I don’t know how “foreign inflation” is different from domestic inflation.  Using deflators to adjust inflation from nominal into real GDP is a time-tested practice.  Who calculates them & how could be an issue.  Otherwise, I don’t buy these arguments.

What’s important is the integrity of these numbers.  I wouldn’t be surprised if economic numbers are being manipulated for political gain, i.e. revised upward so that the current party retains its hold on the presidency. I’m not sure how separate the powers that be are here.  My assumption is that although the Secretary of Commerce sits on the cabinet, the Commerce Department reports to Congress.  These statistics have to be calculated at arms length, far from the influence of politicians.  Given the current administration’s penchant for trying to change anything/everything it can for its own political gain, whatever they might have done to skew numbers in their favor wouldn’t surprise me.

The United States is known to have the most open & transparent reporting practices in the world.  In many of the other developed economies of the world, financial statements are offered in terms of active vs. passive income, etc.  (I can’t even comprehend how accurate or inaccurate numbers for developing economies may be.)  This is a big part of the reason the US has the biggest & most dynamic financial markets.  The more that’s reported, the less perceived risk there is, the safer people feel in investing in companies that report more.  I understand the US Financial Accounting Standards Board (FASB) is considering changing financial reporting requirements to adhere more to international standards than US standards, in other words, to report less rather than more.  My main point is:  If we can’t trust numbers provided by the US government, whose can we trust?


investment opportunity in Nigeria

Thursday 18 September, 2008

I attended this presentation ohmsrazor by the principals of Ohm’s Razor ohmsrazorexecsum @ this  BNC Venture Capital Luncheon.  It’s an e-commerce & online payment play.  They seem to have had some success in pilots & beta testing with banks, no small feat, which speaks well for them.  I think it’s great that they are seeking funding in Chicago, but I just wonder how likely they are to get funded here.  It looks like the reason they’re looking here is the principals are natives of Nigeria who attended Kellogg, & there is more $ here than there.  I have no doubt there is an opportunity there because technology markets are still in their infancy in Africa, with broadband internet penetration dismally low.  It may be increasing with the acceleration of wireless broadband, but there will be other markets where that will grow before it will in Nigeria.  According to Internet World Stats, internet penetration is less than 5% in Nigeria, which makes any internet play questionable.  I question whether they’ll find investors comfortable with the level of risk they’d be taking on there, unless they find investors who know Nigeria very well themselves, & I don’t think there are many in the investment community who do.  Management & the advisory board look like they know Nigerian business well, but finding investors with the same level of knowledge will be difficult.   Their plans are ambitious, & they might even be able to implement them, but there are so many unknowns doing business there that I doubt investors who are known to be more conservative than on the coasts would buy into this.  It also appears as if they’re looking for more than start-up investors seek, $1-5M, so that indicates some niavete in knowledge of the process.  I don’t mean to sound negative-I just think it’s important to be realistic in setting expectations.  I don’t know if they attended the US-Africa Trade & Investment Forum but perhaps Mr. Dada could be of help to them in finding investors in Nigeria.


Italian Machine Tools dinner

Wednesday 17 September, 2008

Machine tools for dinner?  That doesn’t sound very tasty.  No, the Italians weren’t serving machine tools for dinner, they were celebrating them.  Here’s what I learned:

The Italian Trade Commission in Chicago, which hosts Machines Italia, (promotes Italian manufacturing) in the US, hosted this lovely dinner together with UCIMU-the Italian Machine Tools, Robots, & Automation Manufacturers Assn. & EMO Milano.

Pasquale Bova of ITC-Chicago opened the evening with a summary of how the US machine tool market is doing, which is not well.  He questioned whether an all-service economy is healthy, while noting US imports of machine tools are up 14% vs. a year ago & the Italians are up 50% to #3 supplier.

Giancarlo Losma, Pres. of Ucimu, informed us that Italian machine tool exports to the US are up 74% over the last 5 years, despite the escalation in the Euro, driven by interest from the automobile & aviation sectors which rose 16% to 583M Euros in 2006.

John Byrd, Pres. of the Association for Manufacturing Technology let us know that 20% of the visitors to IMTS come from outside the US, with of 92,450 registered is over 18,000 foreign visitors from 119 countries.  That’s quite a tourism gain.

Pier Luigi Streparava of EMO 2009 invited all attendees & exhibitors to EMO Milan 5-10 October, 2009.   There they’re expecting 155,000 viistors from 104 countries to see 1600 exhibitors, 1/2 of which will be coming from abroad from 85 countries.  He also showed a very cool video.

Ralph Carruth, Director of Materials & Processes laboratory @ the Marshall Space Flight Center provided an update on NASA, which is celebrating its 50th anniversary.  He shamelessly made a plug for NCAM-the National Center for Advanced Manufacturing & less shamelessly for US government support.  The space shuttle will be retired in 2010 when the international space station is finished. He showed a less cool video.

Rita Athas, Executive Director of World Business Chicago, accepted the innovation award for Chicago Mayor Richard M. Daley as the 1st non-European to receive it.  Richie was gallavanting is Switzerland @ the time.  Rita noted that Chicago is still the #2 city in manufacturing, which accounts for 583,000 jobs here.  They also gave out the Italian Machine Tools Technology awards to students & their professors @ Arizona State University & Michigan State University.  1 student, Adrian Teo won a free ticket to EMO-Milan from Alitalia.

This was a beautiful evening @ the wintergarden @ the Harold Washington library.  I sat @ a table in the back with 3 Italians from UCIMU, an Italian machine tool area manager, & a woman over from China.  It was well-done, informative, & entertaining.  I can’t think of a better way to explore machine tools, even after sipping a few glasses of wine with a friend of mine over from Germany beforehand.


Polish Minister of Foreign Affairs on NATO

Tuesday 16 September, 2008

Radoslaw Sikorski, Poland’s minister of foreign affairs, came to Chicago (he didn’t even visit Washington, D.C.)  @ this event NATO’s past, present, & future:  a view from Europe sponsored by the Chicago Council on Global Affairs.  Pan (Mr.) Sikorski put Russia’s passive era-ending excursion into Georgia into perspective.  Although it’s still unsure whether this is a remote crisis or a pattern, Russia refuses to be subjugated to anyone, & that new threat needs to be addressed.  If the problems in Georgia are copied in the Ukraine, (a Russian “artificially-created” state, he claims), to protect ethnic Russians, then we have a real problem.  Poles are slavs too, but don’t feel a kinship with Russians.  Despite the fact that the US hasn’t really reacted to the events in Georgia, NATO needs to rearm as a military organization, complete with intelligence operations.  Gasprom needs to be regulated by regulators in the EU, just like Microsoft is.

Q&A revealed-the Poles are threatened once/quarter by the placement of weapons in Kaliningrad by the Russians, in response to hosting NATO missiles on Polish soil.  They hope to rid Poland (Europe?) of nuclear weapons in the next 5 years in reaction to present nuclear threats.  Otherwise, NATO’s reaction could lead to an unattractive spiral escalation of retaliations.  Russia should now be considered a competitor rather than a partner & we need to recognize we can no longer influence Russian internal politics. The EU needs to send more troops into Afghanistan, defend Georgia & the Ukraine.   The developed countries need to teach Russia how to develop its economy. Russia has the advantage that its neighbors are weak, so they dominate that periphery.

I spent 7+ months in Poland & feel that I know it fairly well.  What concerns me most is the small Russian-controlled peninsula of Kaliningrad tucked in along the Baltic Sea between Poland & Lithuania.  This small part of Russia directly abuts Poland & is akin to Cuba’s proximity to the U.S., & hence could have the risk of a European Bay of Pigs.  That & the EU needs to better regulate oil coming in from Russia so that they are not held hostage economically by political whims out of Moscow.  Russia’s power is fueled by oil money, so Europeans diversifying their sources of oil would lessen their dependence on Russian oil.