Daily Archives: May 9, 2017

Wall criticizes attempt to link carbon policy with provincial transfer payments – National Observer

Posted: May 9, 2017 at 3:25 pm

Saskatchewan Premier Brad Wall says any attempt by Ottawa to link transfer money with a province's carbon tax policy would be a serious attack on federal-provincial relations.

Wall says memos obtained by the online publication Blacklock's Reporter show the federal government intends to tie a province's stance on carbon tax to equalization renegotiations.

In a letter to Prime Minister Justin Trudeau, Wall says that would violate the principles of fiscal federalism and he calls the threat unacceptable.

"I'm also asking him ... to release the unredacted version of these internal memos so all the provinces know what we're dealing with here," Wall said Monday at the legislature.

"I think this is very serious. If the federal government is now saying, 'Look, if you don't support us here, you won't get any of this money,' to which all provinces are entitled to on a formula, well that's less like how to run a federation and more like how you run a crime family."

Equalization is a federal program that transfers money to poorer provinces so they can offer government services at similar levels across the country.

Wall argues Saskatchewan's resource-based economy has contributed more than $5 billion to equalization over the last decade, while receiving nothing in payments.

Saskatchewan officials are contacting the federal government to find out what's being considered, he said.

"First of all, the fact that it would be mused about even is a concern to me, that there's someone in the Department of Finance and I have to think it wouldn't be without license from someone very senior who's thinking about, well, should equalization payments be tied to some province's support of a specific federal Liberal policy," said Wall.

"That kind of discussion shouldn't even be happening, never mind in the senior levels at the Department of Finance."

He said he's also concerned about other transfer payments including for health, education and infrastructure funding.

Environment Minister Catherine McKenna's office tried to ease Wall's concerns in a statement on Monday.

"The issue of pricing carbon pollution is unrelated to the federal government's continual engagement with the provinces on the topic of equalization. Linking the two is not a conversation we are having with the provinces," she said in the email.

Wall said he's pleased to hear McKenna's assurances, but her comments don't address other types of federal payments, such as infrastructure funding.

Trudeau has said all provinces must set up a cap-and-trade system or impose a price on carbon of at least $10 per tonne starting next year, which would increase to $50 by 2022, or Ottawa will do it for them.

Eleven provinces and territories agreed to the carbon price plan in December when they signed the Pan-Canadian Framework on Clean Growth and Climate Change. Saskatchewan and Manitoba did not.

McKenna told The Canadian Press last week that negotiations with the two provinces have continued.

Wall said Saskatchewan will continue to oppose any attempt by the federal government to impose a carbon tax on Saskatchewan.

"Meet us in court," said Wall. "My point to the federal government is, if they think they have the constitutional authority to impose a carbon tax on one or a couple of provinces, then go ahead, bring it forward and we will take this to court.

"We're reasonably optimistic about our chances and if they are too, that should be their final vindication."

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[ 9th May 2017 ] To what extent will natural resources contribute to Zimbabwe’s economy? Research Papers – The Zimbabwe Mail

Posted: at 3:25 pm

HAVE Zimbabweans become so myopic that they expect a miraculous return to economic prosperity in the post-President Robert Mugabe era? There seems to be a common misconception amongst us Zimbabweans that replacing the current government will suddenly turn the country into a bread basket again.

by Hopewell Mauwa

Granted, political instability, corruption and erroneous policy execution by government in recent years have left the country in a ravaged state with poor economic growth prospects. But does the absence of corruption and political instability guarantee a return to the kind of economic prosperity often promised by opposition politicians?

Indeed, a salient fact often muted from national economic debate is how exactly the country would position itself for competitiveness in the global economy post attaining stability. Zimbabwe is endowed with vast natural resources, but so are many other countries in the world. How the country produces, consumes and trades with other nations has important implications on the overall value we ultimately extract from our resources.

It is a fallacy to boast about natural resources in isolation in a globalised world where the factors of production land, labour, capital and entrepreneurship have been internationalised. The often-cited beacons of successful extractive industry based economies Canada, Australia and Norway all have a considerable grip on all factors of production, not just the free resource (land).Good institutions have played a key part, but crucially they have not let resource dependence undermine their long run economic growth.

What is often ignored about these countries are the underlying equally large-sized home grown technology, engineering and financial services sectors, which play an even bigger role in building cross-sector synergies and consequently their national competitive advantage.

One of the reasons why many African countries fail to negotiate better deals for their mining sectors is that they often only bring one component of the four factors of production to the table.That places them in a weak and often exploitative relationship.

Take a simplified case of a copper mine in Zambia, for example.The Zambian government offers the mine (land); Rio Tinto finances the development of the mine (foreign capital) and, of course, runs the project as a multi-national company (foreign entrepreneur).

Now Rio Tintos strategic decisions are run from the headquarters of the Anglo Australian company (skilled labour) relegating Zambia to supplying mainly operational, semi-skilled and unskilled labour.Further, the mine itself is capitalised with property, equipment and technology from foreign firms. Financing facilities are meanwhile arranged by foreign institutions in London or New York.

The major economic benefits therefore come down to royalties and taxes, of-course, but also low value non-sophisticated operational activities.It is a vicious cycle indeed; repeat this process over many years and it is apparent why some resource-rich countries are perennially impoverished.Meanwhile, other countries with no natural resources such as Singapore, Hong Kong, South Korea continue to thrive economically.

In Africa, Botswana is often cited as a perfect template on how natural resources should be managed, but what exactly has driven their success?Under the Debswana model, De Beers and the Botswana government have equal equity in the venture.Careful analysis shows that the successes of the venture have historically hinged on good governance and effective government priorities aided by a small population more than the merits of the deal itself.

Patience has been a key part of Botswanas tactics.It has taken nearly half a century for Botswana to become an equal equity partner in the venture and to bargain for some limited technology transfer and value-added services as well as some human capital development in the form of select higher skilled jobs being domiciled in the country.

Botswanas weak bargaining position emanated from offering just one component of the four factors of production in negotiations.To renegotiate a better deal, Botswana leveraged the fact that their mines are globally among the highest quality and low cost to operate, their long relationship with De Beers and of course their relatively stable political climate.

Similarly, Zimbabwe will need to offer a well-crafted unique value proposition to negotiate favourable deals, otherwise benefits will remain limited. This is not insurmountable, but remains opaque at the moment.

Another hyped policy decision is on beneficiating minerals to manufacture value-added products. It is no coincidence that most of the beneficiation of minerals takes place in the developed world closer to markets where the final products are consumed. The underlying economic principle being that it is more cost efficient to transport low value added products than to transport high value finished goods.

Global supply chain networks have thus been established based on that principle with huge cost implications of tinkering with those mature value chains. To business executives, a decision to establish a refinery in a specific country is seldom political, but justified by commercial viability and pragmatism.

Multi-national mining companies are often faced with making choices on refineries locations. In that respect, Zimbabwe will compete with other industrial hubs in China, India and elsewhere. The infrastructure challenges Africa face such as energy generation capacity, the absence of adequate transport systems and dilapidated rail networks in most cases render such projects uncompetitive, particularly when the final products are intended for export.

In the absence of vibrant domestic or regional consumption, significantly expanding mining value-added manufacturing capacity appears a long-term aspiration rather than something that can be realistically achieved in a few years.

So, what will ensure that Zimbabwe does not fall into recurring strategic pitfalls where resources perpetually benefit foreigners ahead of local communities? Clearly, political stability, curbing corruption and good institutions are crucial initial steps.Beyond that, however, the strategies articulated by most political parties, lack depth and clarity on how they will counter the market forces stacked against our negotiation capabilities in the global context.

It appears constrained capital availability is the easy excuse to accept the status quo and to offer better concessions to foreign firms.That certainly is a recipe for more frustration amongst locals as that will lead to unfulfilled promises.

The nation needs to dig deeper; without carefully thought out structural reforms that tip factors of production in our favour supported by coherent cross-sector long term strategic goals, harnessing the full benefits of our natural resources will remain an unfulfilled dream.

About the Author: Hopewell Mauwa is an economic analyst and global natural resources strategist based in London. He writes in his personal capacity and can be contacted on hopewell.mauwa@cantab.net

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[ 9th May 2017 ] To what extent will natural resources contribute to Zimbabwe's economy? Research Papers - The Zimbabwe Mail

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Can resources lift Zimbabwe’s economy? – New Zimbabwe.com

Posted: at 3:25 pm

HAVE Zimbabweans become so myopic that they expect a miraculous return to economic prosperity in the post-President Robert Mugabe era? There seems to be a common misconception amongst us Zimbabweans that replacing the current government will suddenly turn the country into a bread basket again.

Granted, political instability, corruption and erroneous policy execution by government in recent years have left the country in a ravaged state with poor economic growth prospects. But does the absence of corruption and political instability guarantee a return to the kind of economic prosperity often promised by opposition politicians?

Indeed, a salient fact often muted from national economic debate is how exactly the country would position itself for competitiveness in the global economy post attaining stability. Zimbabwe is endowed with vast natural resources, but so are many other countries in the world. How the country produces, consumes and trades with other nations has important implications on the overall value we ultimately extract from our resources.

It is a fallacy to boast about natural resources in isolation in a globalised world where the factors of production land, labour, capital and entrepreneurship have been internationalised. The often-cited beacons of successful extractive industry based economies Canada, Australia and Norway all have a considerable grip on all factors of production, not just the free resource (land).Good institutions have played a key part, but crucially they have not let resource dependence undermine their long run economic growth.

What is often ignored about these countries are the underlying equally large-sized home grown technology, engineering and financial services sectors, which play an even bigger role in building cross-sector synergies and consequently their national competitive advantage.

One of the reasons why many African countries fail to negotiate better deals for their mining sectors is that they often only bring one component of the four factors of production to the table.That places them in a weak and often exploitative relationship.

Take a simplified case of a copper mine in Zambia, for example.The Zambian government offers the mine (land); Rio Tinto finances the development of the mine (foreign capital) and, of course, runs the project as a multi-national company (foreign entrepreneur).

Now Rio Tintos strategic decisions are run from the headquarters of the Anglo Australian company (skilled labour) relegating Zambia to supplying mainly operational, semi-skilled and unskilled labour.Further, the mine itself is capitalised with property, equipment and technology from foreign firms. Financing facilities are meanwhile arranged by foreign institutions in London or New York.

The major economic benefits therefore come down to royalties and taxes, of-course, but also low value non-sophisticated operational activities.It is a vicious cycle indeed; repeat this process over many years and it is apparent why some resource-rich countries are perennially impoverished.Meanwhile, other countries with no natural resources such as Singapore, Hong Kong, South Korea continue to thrive economically.

In Africa, Botswana is often cited as a perfect template on how natural resources should be managed, but what exactly has driven their success?Under the Debswana model, De Beers and the Botswana government have equal equity in the venture.Careful analysis shows that the successes of the venture have historically hinged on good governance and effective government priorities aided by a small population more than the merits of the deal itself.

Patience has been a key part of Botswanas tactics.It has taken nearly half a century for Botswana to become an equal equity partner in the venture and to bargain for some limited technology transfer and value-added services as well as some human capital development in the form of select higher skilled jobs being domiciled in the country.

Botswanas weak bargaining position emanated from offering just one component of the four factors of production in negotiations.To renegotiate a better deal, Botswana leveraged the fact that their mines are globally among the highest quality and low cost to operate, their long relationship with De Beers and of course their relatively stable political climate.

Similarly, Zimbabwe will need to offer a well-crafted unique value proposition to negotiate favourable deals, otherwise benefits will remain limited. This is not insurmountable, but remains opaque at the moment.

Another hyped policy decision is on beneficiating minerals to manufacture value-added products. It is no coincidence that most of the beneficiation of minerals takes place in the developed world closer to markets where the final products are consumed. The underlying economic principle being that it is more cost efficient to transport low value added products than to transport high value finished goods.

Global supply chain networks have thus been established based on that principle with huge cost implications of tinkering with those mature value chains. To business executives, a decision to establish a refinery in a specific country is seldom political, but justified by commercial viability and pragmatism.

Multi-national mining companies are often faced with making choices on refineries locations. In that respect, Zimbabwe will compete with other industrial hubs in China, India and elsewhere. The infrastructure challenges Africa face such as energy generation capacity, the absence of adequate transport systems and dilapidated rail networks in most cases render such projects uncompetitive, particularly when the final products are intended for export.

In the absence of vibrant domestic or regional consumption, significantly expanding mining value-added manufacturing capacity appears a long-term aspiration rather than something that can be realistically achieved in a few years.

So, what will ensure that Zimbabwe does not fall into recurring strategic pitfalls where resources perpetually benefit foreigners ahead of local communities? Clearly, political stability, curbing corruption and good institutions are crucial initial steps.Beyond that, however, the strategies articulated by most political parties, lack depth and clarity on how they will counter the market forces stacked against our negotiation capabilities in the global context.

It appears constrained capital availability is the easy excuse to accept the status quo and to offer better concessions to foreign firms.That certainly is a recipe for more frustration amongst locals as that will lead to unfulfilled promises.

The nation needs to dig deeper; without carefully thought out structural reforms that tip factors of production in our favour supported by coherent cross-sector long term strategic goals, harnessing the full benefits of our natural resources will remain an unfulfilled dream.

About the Author: Hopewell Mauwa is an economic analyst and global natural resources strategist based in London. He writes in his personal capacity and can be contacted on hopewell.mauwa@cantab.net

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THE NETHERLANDS: Social Assistance Experiments Under Review – Basic Income News

Posted: at 3:25 pm

Researchers in several Dutch municipalities are preparing experiments to test the effects of the removal of conditions on social assistance. Although not testing basic income per se, the experiments will examine one of its key attributes (the reduction of conditionality).

This year, popular sources have occasionally continued to report that the Dutch city of Utrecht is preparing to launchor has already launcheda pilot study of universal basic income (sometimes continuing to cite a now-outdated article published in The Atlantic in June 2016). In this light, it is particularly important to clarify the facts surrounding the Dutch social assistance experiments.

It is true that researchers have proposed experiments in several Dutch municipalities that will examine the effects of reducing conditions on welfare benefits, including the removal of job-seeking requirements and a lessening in the amount benefits are reduced with income. However, as explained below, these experiments will not test a full-fledged basic income. Moreover, at the time of this writing, none of the municipal social experiments have been launched: those in Groningen, Tilburg, and Wageningen are awaiting approval from the Dutch Ministry of Social Affairs; meanwhile, the experiment in Utrecht has been delayed indefinitely, having been denied approval by the Ministry.

Background: The Participation Act, Motivation, and Design

The Dutch Participation Act, enacted in 2015, imposes conditions on recipients of social welfare that are intended to promote their reintegration into paid employment. For example, beneficiaries are typically required to complete five job applications per week, attend group meetings, and participate in training activities in order to continue receive cash assistance.

Researchers at Utrecht University School of Economics, such as Loek Groot and Timo Verlaat, have criticized the conditions and sanctions imposed by the Participation Act from standpoint of behavioral economics. Research in behavioral economics has demonstrated, for example, that performing tasks for monetary rewards can crowd out individuals intrinsic motivation to perform such tasks. Furthermore, deprivation and fear of losing benefits may engender a scarcity mindset that impedes rational decision making. Drawing from such findings, researchers like Groot and Verlaat have hypothesized that reducing conditions on welfare benefits would better promote individuals reintegration and productive contributions to society (see, e.g., Utrecht University and City of Utrecht start experiment to study alternative forms of social assistance, last accessed May 6, 2017; note that the start date mentioned in the article, May 1, is no longer accurate).

The social experiments proposed in Utrecht and other Dutch municipalities have been designed to test the above hypothesis: randomly selected welfare recipients (who agree to participate) will be randomly assigned either to a control group or a treatment group, one in which reintegration requirements on receipt of benefits will be removed. (Although the exact design of the experiments has differed between municipalitiesand between versions of the proposalall have included a treatment group with the elimination of job-seeking conditions. Proposals experiments have also included groups with different interventions, such as, in several recent versions, increased reintegration requirements and relaxation on means-testing; see below.) These treatment groups will be compared to a control group, as well as a reference group composed of individuals not selected for the experiment, with respect to outcomes such as labor market participation, debt, health, and life-satisfaction.

Meanwhile, however, researchers must grapple with another consequence of the Participation Act: the law limits the extent to which they are legally permitted to test alternative welfare policies. For one, as mentioned in a previous Basic Income News article, the Ministry of Social Affairs has required that the municipal officials overseeing the experiment must check after six and twelve months to determine whether experimental subjects have made sufficient efforts to find paid work. At these times, if an individual has been found to have undertaken too few employment-promoting activities, their participation in the experiment must be ended. This constraint reintroduces some degree of conditionality even for treatment groups in which the requirement to participate in reintegration activities has been lifted from social assistance.

In addition, the Ministry has also requested that experiments include an additional treatment group in which stricter reintegration requirements are introduced. The experiments proposed for the municipalities of Tilburg, Wageningen, and Groningen, are currently under review by the Ministry, include such a treatment group; the initial (and unapproval) design of the Utrecht experiment did not.

Relationship to Basic Income

Largely for political reasons, proponents of the Dutch social experiments have avoided the use of the term basic income (basisinkomen in Dutch), with researchers in Utrecht calling their proposed experiment by the name Weten Wat Werkt (English: Know What Works). (In the Netherlands, basic income is often associated with the stereotype of giving free money to lazy people.)

This avoidance is apt, however, since the experiments have indeed not been designed to test a universal and fully unconditional basic income. The designs of the experiments have either not been finalized or are still pending government approval (see below). Regardless, however, it seems certain that any of the experiments (if approved) will test policies that differ from a basic income in several key respects. First, the population of the experiment is not universal; participants are to be selected from current welfare recipients (as is also the case in Finlands Basic Income Experiment, launched on January 1, 2017, which has also been designed to test the labor market effects of the removal of conditions on welfare benefits for the unemployed).

Furthermore, within the treatment conditions themselves, the benefit will remain means-tested and household-based (rather than individual-based), in both respects unlike a basic income. In all designs proposed to date, participants within all treatment groups will have their benefits reduced if they take a paid job during the course of the experiment. However, the Tilburg, Wageningen, and Groningen experiments, as currently planned, will include a treatment group in which benefits would be reduced at slower rate (50% of earned income instead of 75%).

In the latter respects, the Dutch municipal experiments bear more similarity to the Ontario Basic Income Pilot than Finlands Basic Income Experiment [1]. While the Finnish pilot is indeed investigating non-means-tested benefits paid to individuals, the pilot studies in Ontario and (if approved) the Netherlands will continue to work with programs in which the amount of benefits depend on income and household status; however, in all cases, many conditionalities on benefits will be removed in some experimental conditions.

Despite these differences, some view the Dutch social assistance experiments as a possible step toward a full-fledged basic income. Moreover, as seen above, the experiments have been motivated largely by arguments from behavioral economics that have previously been invoked in arguments in favor of the unconditionality of basic income (see, e.g., the 2009 Basic Income Studies article Behavioral Economics and The Basic Income Guarantee by Wesley J. Pech).

Status of the Experiments

In contrast to some rumors and media presentations, none of the proposed social assistance experiments in the Netherlands has yet been launched.

The experiment in Utrecht, which had earlier in the year been to declared to have a launch date of May 1, has been deferred. According to a statement about the experiment on the City of Utrecht webpage, The Ministry of Social Affairs and Employment has indicated that we need to do the experiment in a different way. We are discussing how we can conduct the study.

Researchers are currently considering alternative designs of the experiment that will bring them into compliance with the Participation Act, and no new start date has been announced.

Meanwhile, the Ministry is reviewing experiments proposed in Tilburg, Wageningen, and Groningen, with an announcement expected later in May. As previously mentioned, these experiments have been designed to avoid conflict with the Participation Act, as had been one concern with the originally proposed design of the Utrecht experiment.

Basic Income News will publish a follow-up article of the Dutch municipal experiments, including further details on their design and implementation, after their final approval by the government.

Thanks to Arjen Edzes, Ruud Muffels, and Timo Verlaat for information and updates, and to Florie Barnhoorn and Dave Clegg for reviewing this article.

Photo: Groningen, CC BY 2.0Bert Kaufmann

[1] I am here using these terms as proper names given by the respective governments, despite the differences between the experimental programs and a basic income as defined by BIEN.

Kate McFarland has written 418 articles.

Kate has previously worked as a professional student, but is currently taking a mid-career retirement.

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These workers have the most automated job in America, and they say they wouldn’t have it any other way – Quartz

Posted: at 3:24 pm


Quartz
These workers have the most automated job in America, and they say they wouldn't have it any other way
Quartz
Fears that automation technology will impact jobs in industries like banking and law are fairly new. But many occupations, like engraver, have already been transformed by automation. Back in 2007, when the Department of Labor last surveyed the ...

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These workers have the most automated job in America, and they say they wouldn't have it any other way - Quartz

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VIDEO: How Industrial Automation Promotes Job Growth – ENGINEERING.com

Posted: at 3:24 pm

There's a widely held and erroneous perception that industrial automation is job killer, but in reality, it's quite the opposite, said Jeff Burnstein, president of the Association for Advancing Automation (A3).

A3 recently released a whitepaper titled Working in the Automation Age: Sustainable Careers Today and into the Future, which discredits the theory that automation hurts jobs and promotes how modern men and women can find more meaningful, safer and more enjoyable work.

The hysterical stories keep being printed in the media, but the robot we see doesn't match the idea of robots being a job killer, said Burnstein. If it were true, then if robot sales were to rise, you'd expect unemployment to rise. We looked at a twenty year period of manufacturing jobs and overall employment in the US and every time robot sales rose, unemployment fell. Every time robot sales fell, unemployment rose.

Burnstein explains how the robotics industry today is seeing its greatest expansion since the invention of industrial robotics in the 1960s.

In the past seven years there were 137,000 robots delivered in the US, said Burnstein. Publicly available studies tell us that as robot use accelerates manufacturing jobs will decline, but guess what? Nearly 900,000 new manufacturing jobs were created during that period. That doesn't sound like a job killer.

A3 approached customers like General Motors (GM), who despite investing heavily into industrial robots, added 25,000 more staff, Burnstein added. Amazon was also approached, having added 40,000 industrial robot units to their fleet, along with 100,000 new humans.

The significant issue we should be worried about may be labor shortages, as manufacturers struggle to find skilled replacements for retiring baby boomers who are technologically savvy enough for modern machinery and automation.

We have examples of companies who have invested in automation to solve the problem of dull, dirty and dangerous jobs, lowered their costs, won new business they wouldn't have otherwise and since they've automated, they've hired more people, Burnstein said.

Some manufacturers require skills that aren't really being taught. Our whitepaper talks about how we need to break the mold of going to high school to college to looking for a job and accumulating all that debt. These jobs are mostly hands on, where you can get a certificate out of technical school or community college and become very valuable as a robot operator, installer or by doing maintenance of the technology.

For more information, watch the video above and read A3's whitepaper on their website.

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How The Automation Wave Will Help Small Business – Small Business Trends

Posted: at 3:24 pm

Automation is suffocatingly ubiquitous, or it seems that way when you scan business news. In fact, it is still a new technology that is slowly integrating into everyday work. Of course, we are all familiar with the high-profile applications of automation in marketing and sales, but what about the other near-limitless applications?

What about automation in industries like tourism and education? And what about the specific functions like communication, human resources (ironic), and operations? The world is less automated than it appears, though the adoption trendline is certainly steep.

The problem is that many small businesses are not aware that they need to be proactive in adopting automation practices. While there will be out of the box solutions to buy eventually, surviving the automation wave will require proactively seeking out ways to be competitive with the technology.

So how can a small business owner identify the areas of their business where automation can make an impact? How do you know if your company even needs it? How do you know if your competitors are going to use it? Lets talk about the minutia of automation in plain terms and discuss three ways it can give your business a competitive advantage.

Any repeatable task can be automated. Whether that is filling out a form, sending a scheduled email, or booking an appointment, it can probably be done faster by a computer.

One of the first things a small business owner should do when looking for areas to be competitive with automation is to identify repetition. Computers can be taught to emulate and repeat just as well or better than people. One of the biggest differences is the speed with which they can accomplish tasks.

Michael Cohan, founder, and CEO of Unisource National Lender Services puts it this way, Loan processing has completely changed as a result of machine learning and automation. Lenders use automation technologies to improve efficiency in myriad ways, from auto-filling paperwork to aggregating information. The result is that loans process faster much faster.

In the lending industry, speed is a competitive advantage. Speed is a competitive edge in every industry, so small business owners need to look around and identify what could be working faster.

How do you calculate cost savings? When we talk about saving money through automation, the first thing people think of is fewer salaries. But that is not always the only or biggest savings.

Money can be saved (and earned) by accomplishing work faster, making fewer mistakes, and winning more business. In a very grand sense, it is also cheaper than being pushed out of business by more technologically advanced competitors. If you look at your industry and see the automation wave coming, that could be the cost of inaction.

Small business owners need to make a hard assessment of the cost of not using automation. Costly clerical errors can add up to thousands of dollars in losses even for small companies. Slow turn around time on projects means the business has to pay salaries for longer while making lower revenue. These little areas of improvement are where automation shines.

The expression work smarter, not harder is objectively overused and frequently misused. In the case of automation, it is reasonably appropriate. Many clerical jobs require people to repeatedly fill out the same forms over and over again. Performing that task is time-consuming and small human errors can result in substantial problems everything from costly delays to lost clients.

Cohan explains, The ability to rapidly process paperwork makes every business more competitive, but certainly companies that deal in large volumes of paperwork. A lending company with a well-designed automation function is extremely competitive. They can issue loans faster with a higher degree of certainty that they are done properly.

Every industry has an application for automation. If your competitors are exploiting it, you need to get on board quickly. If they are not, you may have the opportunity to race ahead of the pack as an early adopter.

Automation Photo via Shutterstock

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89% of tech pros say IT automation is necessary for digital transformation – TechRepublic

Posted: at 3:24 pm

Image: iStockphoto/NicoElNino

Automate or die seems to be the message for IT leaders. Some 89% of tech pros said that IT automation must be used in new ways to achieve digital business objectives, according to a new survey from BMC Software.

Further, 73% of IT decision makers said they believe that businesses that do not embrace IT automation in digital transformation strategies within the next five years will no longer exist in 10 years.

Half of respondents said that digital transformation is the largest item on IT's agenda, and 45% said it represents the largest investment of any IT program. Demands for new sources of revenue, competitive advantages, and operational excellence have created enormous pressure to compete digitally in order to earn the trust of customers, trading partners, and employees, 92% of tech professionals agreed.

The survey included responses from more than 650 IT decision makers across 12 countries. Some 94% of these professionals reported that they expect automation to spread from IT departments into all areas of business by 2020, to keep pace with the digital business innovation race that every industry is currently competing in.

SEE: Digital Transformation: A CXO's Guide (ZDNet)

Containerization, workload automation/scheduling, and DevOps were the top three areas of investment priority for the tech leaders surveyed over the next 24 months, BMC Software found.

"As companies continue to incorporate hybrid cloud capabilities across the digital enterprise, they are challenged by the complexity of managing workloads across public and private clouds," said Gur Steif, president of digital business automation at BMC, in a press release. "IT teams must be able to manage the customer value chain in spite of decentralized usage of cloud services. This is requiring a new level of IT automation to adapt to the challenges posed by increasingly diverse infrastructure, disparate data, and accelerated applications - the critical components of digital business."

Enterprises face a number of other digital transformation challenges as well, the survey found. Some 42% of CIOs surveyed said they believe business units still have conflicting objectives, and 32% said their company needs tighter internal organizational alignment.

However, 88% of IT leaders surveyed said they believe they are empowered to deliver the necessary IT innovation to drive digital transformation efforts. And 77% said they believe businesses are doing enough to prepare and train the workforce with greater automation skills. Meanwhile, 76% of respondents said they consider themselves excellent or very good at using data to deliver tangible business outcomes for a competitive advantage.

1. As more businesses undergo digital transformation efforts, 89% of IT decision makers said that IT automation must be used in new ways to achieve digital business objectives, according to a new survey from BMC Software.

2. Further, 73% of IT decision makers said they believe that businesses that do not embrace IT automation in digital transformation strategies within the next five years will no longer exist in 10 years.

3. Half of respondents said that digital transformation is the largest item on IT's agenda, and 45% said it represents the largest investment of any IT program.

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Global Economic Shifts Bring Uncertainty in Automation – Automation World

Posted: at 3:24 pm

Brexit. Trump. Cybersecurity. Skills gap.Customer demands. These and other factors loom large as influencers on manufacturers and their automation decisions, and there remains a lot of uncertainty tied up with much of it. Trends already underway will help shape decisions, but how exactly everything will play out is still unknown.

Brexit: Toosoon to know British citizens decided in a referendum vote last year to withdraw from the European Uniona move commonly referred to as Brexit. The UK government began the official withdrawal process in late March this year, so a great deal is still unknown about what sort of trade deals the UK will be able to develop on its own or what other effects Brexit will have on the country.

Its a dangerous game to jump too soon to predictions about the eventual impact of Brexit, notes Glynn Westbury, managing director at UK-based system integrator Westbury Control Systems. We may have voted decisively as a country, but not a lot since then has really been actioned or implemented, he says.

The effect of Brexit remains to be seen, agrees Caralynn Nowinski Collens, CEO of UI Labs, a manufacturing technology incubator based in Chicago. Manufacturing in the country got a boost in 2016, ending the year stronga surprise to many concerned about the effects of Brexit.

The uncertainty itself, however, has had an impact on UK businesses, Westbury says. Since the referendum, this factor has created some temporary issues with workflow, whereby clients have held back or hesitated in finalizing the approvals for projects to move forward. Consequently, managing our workflow can be a challenge, he says. Indecision and a drop in confidence makes doing business less straightforward.

And along with that uncertainty has come cost increases from European suppliers, Westbury adds. Some of the kits that we buy ready to assemble in our control panels have had price increases beyond the regular, annual increment. So far, Westbury has absorbed the increase, but it is inevitable that those additional rises in costs will, at some point, have to be passed on to our customers.

Collens points to possible storm clouds on the horizon in the form of inflationary risk and a slowdown in investment from companies in European countries that decide to take a wait-and-see approach as Brexit nears. That said, she continues, despite the political events, it appears that the countrys investment in advanced manufacturing and materials continues to attract companies that see benefits from operating within the UK.

On the positive side for U.S. companies doing business overseas, a drop in the value of the British pound should bring benefits, Westbury notes. Feedback from American clients has been openly positive, anticipating that Westbury will be more competitive for many of its overseas contracts, he says.

The Trumpquestion Donald Trumps inauguration this year as U.S. president has brought quite a lot of change already, but many companies are still waiting to see how new policies enacted by the administration might affect operations.

I don't know that anybody really knows what to expect from Trump, says Laura Studwell, industry marketing manager at Omron Automation Americas. Most companies, I think, are just kind of sitting back and saying, Okay, let's see how this plays out for a little bit longer before we make decisions that could potentially have an impact on our operation.

Tom OReilly, vice president of global business development for Rockwell Automation, is on the same page with Studwell. I would say you are hearing things now, he says. I wouldn't say we are seeing things.

Based on what President Trump has said that he would like to have happen, Westbury sees potential benefit from the new administrations focus on conventional energy spending, and his customers agree. Inevitably, the demand for their technology and business is likely to increase in response to Trumps objective to rebuild the U.S. energy provision, including the use of fossil fuels, Westbury says. Generally speaking, conservative politics are usually beneficial to business. At Westbury, we are optimistic that a Trump presidency will bolster our existing U.S.-influenced client relationships and their business that demands our services.

Collens sees it from a less political stance. Fortunately, manufacturing is a bipartisan issue, so we expect to see continued federal support for technological advancement and job creation in the industry, she says. She sees continued government support for advanced manufacturing as crucial to that effort, and shes hopeful that the new president will agree. President Trump has expressed his enthusiasm for bringing manufacturing jobs back to the United States, and we hope that hell recognize the importance of continued federal support for institutes like ours in order to do that.

Securityconcerns Cybersecurity is at the top of many manufacturers list of concerns, and is directly related to the continued push toward the kind of advanced manufacturing that Collens advocates, including the Internet of Things (IoT). As you have intelligent assets, as you have greater connectivity, you're opening the electronic door to potential [security] issues, OReilly explains. If someone hacks into your industrial control system, they could wreak havoc on your manufacturing line. We spend a lot of time talking with our customers about security.

John Kowal, director of business development at B&R Industrial Automation, a member of the Industrial Internet Consortium (IIC), is blunt on the security risk to connected automation. We wont have IoT until the security issue is solved or successfully addressed, he says. Its just not going to happen. Were not going to plug things in until theyre secure enough that corporations feel comfortable putting those assets out where they could be potentially hacked.

Cybersecurity is top of mind for end users and suppliers, particularly as the manufacturing industry continues to digitize, Collens affirms. There are tremendous efficiency gains to be made by connecting the full product lifecycle using data, but with that comes a heightened need to guard against cyber attacks.

Collens cites a report from 2016 by consultancy firm BDO showing that 92 percent of manufacturers surveyed share cybersecurity concerns. That percentage is up from 44 percent of manufacturers in 2013. The fears are not unfounded. According to 2015 data from the U.S. Department of Homeland Security, a third of cyber attacks to infrastructure were against the manufacturing sector. The attacks led all other infrastructure attacks, and the number of attacks was more than double those on the next hardest hit sectorenergy.

New cybersecurity rules from the U.S. government are also driving cybersecurity investments, Collens says. Federal contracts are at stake for companies that dont comply with new rules in the Defense Federal Acquisition Regulation Supplement (DFARS) that are scheduled to go into effect in December 2017.

From any perspective, whether from the business or operations side of manufacturing, or from a regulatory standpoint, security concerns will only continue to grow, and must be managed appropriately to enable the industry to thrive. The key to managing the cybersecurity risk, OReilly says, is understanding what the risks are, having the appropriate strategy or plan around those, and managing themputting the right security process and plan in place.

The skills gap A skills gap continues to affect hiring decisions, with no letup in sight, regardless of whatever other uncertainties might be at play. Addressing that issue, OReilly sees manufacturers in increasing numbers setting up pilot projects that can develop best practices around technologies and the skills needed to operate them. Starting on that scale, they prove out the technology [and] that people have the right skillsets, he says. From there, successful pilots can be rolled out from the whole facility, and at a broader scale across the country and globally.

The Digital Manufacturing and Design Innovation Institute (DMDII), part of UI Labs, has a partnership with Coursera to develop specialized online classes for digital manufacturing and design. We are seeing companies interested in hiring, but understanding the types of roles they need can be a challenge, Collens says. The online courses help expose younger learners and current shop-floor workers to digital manufacturing and design technologies.

Since good workers can be hard to come by, Westbury is among manufacturers placing a premium on reducing employee turnover. In a sector with an engineer and technician shortage, Westbury takes a more proactive role in filling that skills gap, he says. An apprenticeship program at Westbury cultivates skilled workers while enabling them to earn college degrees. Consistency among workers rather than flexibility in staffing, Westbury says, is a priority.

Global shifts drive automation No matter what happens on the political scene, globalization and evolving consumer demands will continue to shape investments in manufacturing now and in the foreseeable future, Studwell contends. Flexibility and standardization are the bywords now and to come, she says. Standardization of equipment is crucial for OEMs, she adds, so that they can supply and support multiple markets. At the same time, demand for consumer packaged goods continues to diversify.

What you're seeing is moving away from customization and going to personalization. I call it SKU proliferation, Studwell says, citing as an example Element Bars, which offer the ability to customize meal bars that are then manufactured and shipped to consumers on demand. For on-demand manufacturing, everything's got to be automated, she says.

Westbury, too, sees no slowdown in manufacturings relentless pace toward automation. Currently, an ongoing initiative to reduce our manufacturing waste means that some of our manual tasks over time will become more automated, he says. We dont think this will mean employing less staff at Westbury. Instead, the people we employ will not be burdened with the low-skill, repetitive tasks, which are suitable for automation. Westburys customers, as well, are continuing with automation plans, as evidenced by new orders for control panels for robotics projects, he adds.

No matter what, it seems, automation will only grow in importance as time goes on, despite any political or economic upheavals on the horizon. Regardless of political trends, technology is progressing rapidly, and the industry has much to gain through improving digital capabilities, Collens says. She believes that the manufacturers UI Labs serves will proceed with technology investments. They certainly hope that political and trade trends remain favorable to the sector, but technological advancement will benefit them individuallyand the industry at largeregardless.

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UniCarriers Commits to its Employees as it Commits to Automation – IndustryWeek

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As a brand name, UniCarriers is less than a decade old, dating only back to 2011. However, the companys lineage dates back more than a century to 1914, when one of the companies now included under the UniCarriers nameBarrett, a manufacturer of manual pallet truckswas founded. And Nissan Forklift, whose U.S. headquarters occupied the same Marengo, Ill.-based plant where UniCarriers Americas Corp. (UCA) is now based, was founded 60 years ago in Japan. And TCM, under company thats now part of UniCarriers, began manufacturing forklifts in Japan in 1949. Clearly, a lot of the material handling history over the years has been made by UniCarriers under one name or another.

James Radous has been president of UCA, a subsidiary of Japan-based UniCarriers Corp., since 2016, having previously served in such roles as president of UCAs retail operations and executive vice president of sales. Prior to joining UCA in 2009, he worked for such companies as Knaack (a division of Emerson), Klein Tools, Wen Products, and The Chamberlain Group.

As a manufacturer with ties to the Japanese automotive industry, UCA is both dedicated to continuous improvement and working very collaboratively with its suppliers, as UCA considers its supply chain partners to be one of its biggest competitive advantages. For instance, one of its suppliers, Leading Americas, has established warehouse operations in Marengo, the same small Midwestern town where UCA is headquartered.

IndustryWeek talked to Radous about UCAs legacy as a U.S. material handling equipment provider, as well as its move toward automation while strengthening the capabilities of its workforce.

IndustryWeek: UniCarriers has been successful in attracting some of your suppliers to Marengo. How did that come about?

Radous: We bought a facility across the street from us about four years ago, a former packaging and corrugation company that moved to Mexico. So right across the street from us was a facility, roughly 120,000 square feet, and it affords us areas not only to do testing, but weve also brought the engine and the transmission manufacturing in house to be vertically integrated. Doing so, we also had space available for some of our longer lead time parts suppliers out of China and weve rented them space so they have an on-site office. And we also have on-site parts storage, which functions almost like a vendor-managed inventory operation. Its pretty neat.

IW: Describe what UniCarriers continuous improvement culture looks like.

Radous: On Fridays, the executive team does a shop walk around the plant. Well visit one or two workstations where the supervisor or a member of their team will present an idea or a solution theyve come up with. Theyre all good ideas, and theyre all cost savings ideas that the employees themselves have thought about. For instance, one person might say, I used to have to go get this one piece of equipment here and then walk over there and Id do this 400 times a day. But I know if I can get this machine redesigned, itll save me this amount of hours a day and that translates into this amount of dollars. So people themselves are thinking of initiatives and theyre justifying their position and how theyre showing a return on investment just by thinking outside the box. Its huge.

We have a big award ceremony once a year, and youd be amazed by how what might seem like simple ideas, over the course of time, accumulate into quite a lot of savings and keep us cost-competitive internally. Instead of beating up suppliers all the time, were internally creating more efficiencies.

Also, we just received the OHSAS 18001 certification for occupational health and safety. And weve also received the ISO 9001 for quality management and the ISO 14001 for environmental management. And we do a lot of lean. We used to employ the Nissan Production Way, which is now the UniCarriers Production Way, and thats been part of the DNA of the organization for a long time.

IW: Whats your strategy in terms of manufacturing technology and automation?

Radous: We had a third party do a complete manufacturing review of our business to determine how we can be most efficient, even though we run a pretty efficient plant today. So theyve recommended different traffic flows, new dock locations, better flow-through of raw materials as well as finished goods. So were looking at that. So weve got, number one, a redesign for growth. Number two, weve invested in laser cutting tables. Number three, were using robotic welders as well as human welders, and were also using manipulators.

So heres the thing: By adding automation weve been able to redeploy our workforce to other areas, so we havent cut workforce. Thats been our commitment to our employees. We have committed to them that theyre not going to lose their jobs because of our adoption of automation and robotics. Yes, they might be redeployed or reeducated into other areas, but its not an employee reduction plan.

So our employees arent afraid of technology anymore because they know its not taking their spot; in fact, its making their jobs easier and safer.

IW: Speaking of safety, you recently served as the chair of National Forklift Safety Day, so whats your message to the industry on the current state of warehouse safety? What does the industry need to focus on?

Radous: Safety is every day. We highlight it one day of the year, but we need to reinforce safety every day. And the thing about safety is, its everybodys jobthe owners, the managers, the employees, the pedestrians. We cant take these machines for granted. And youre never done with safety. Every time we redesign one of our forklift products we look to add another safety feature. And that isnt dictated through regulationsits just what we think is the right thing to do.

IW: How does ergonomics factor into safety?

Radous: Seat ergonomics is the first thing I would mention. There are different shapes and sizes that people use in the products. While you can make it ergonomically desirable, you still cannot circumvent the safety aspect. We continually look at ergonomics.

IW: How successful have you been at recruiting young talent?

Radous: Weve actually hired a number of interns over the last several years who have turned into full-time employees in our engineering and accounting areas from Northern Illinois University. Weve gotten very involved with their engineering department. We went to their recruitment day, and we had 200 resumes that we vetted down to 40 who are now actively working with us.

We brought our youngest and our brightest mechanical and electrical engineers to the recruitment fair, the types of young people who make this industry look great, and they showed the recruits the type of things theyre working on. And they would tell the recruits, These arent just forkliftsthis is the heart of commerce. Were where everything begins. And these students just couldnt wait to see for themselves. Were trying to make this industry fun and exciting again. So thats where it begins.

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UniCarriers Commits to its Employees as it Commits to Automation - IndustryWeek

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