It’s not just long winters that push Swedes to innovate

It’s not just long winters that push Swedes to innovate

By Nathan Hegedus — 4 hours ago

Nathan Hegedus is a Stockholm-based journalist and communications consultant.

Innovation is a difficult quality to measure, but, by all accounts, Sweden is an innovative place and only getting more so, with top rankings in innovation surveys from the Legatum Institutethe World Intellectual Property Organization, and theWorld Economic Forum. The foundation for this economic strength seems to transcend the absolute terms by which many people view Sweden—either as socialist nightmare or a capital of cool or a place scarred by long winters and Lutheran angst.  In fact, Swedes seem to be pragmatically pulling from their entire heritage—a culture of entrepreneurship going back a century, the social stability of the welfare state, and that sense of pop culture—to reach forward into a globalized future. This is most obvious in a recent slew of stories on the vibrant Stockholm startup scene, headlined by Skype and Spotify, but now including hot companies likeiZettleKlarna and Wrapp.

But innovation in Sweden is not limited to techy startups. Sweden is a world leader in life sciences, with clusters in both the Stockholm area and in southern Sweden, in conjunction with Denmark. And it’s also long been considered on the cutting edge of clean tech, largely inspired in practice and principle by its vast natural resources—meaning its rivers, wind, seas and forests. The country actually imports800,000 tons of trash a year to fuel efficient waste-to-power plants and gets more of its energy from biomass than oil, has set a goal to be oil-free by 2020, and is the leader within the EU in renewable energy. All this creates a welcoming ecosystem for Swedish clean tech companies like gasification firm Chemrec and solar company ClimateWell. In the World Wildlife Fund’s 2012 Clean Tech rankings, Sweden ranked third behind only Denmark and Israel. From the report: Sweden and the USA show a common pattern, scoring well on “evidence of emerging cleantech companies” and “general innovation drivers”. Sweden edged out the USA by scoring stronger (on a relative basis) on the “evidence of commercialised cleantech innovation” factor mainly due to its relatively strong deployment of renewable energy. But Sweden and other Nordic countries across the board need to raise their manufacturing rate and be careful to avoid getting stuck as boutique innovators who never reach a larger scale.

So why does Swedish business “punch above its weight” in terms of innovation, as Skype founder Niklas Zennström recently put it? Read more of this post

The real Disney: The wonderful world of ESPN, the sports network which outmints Mickey Mouse; ESPN is probably responsible for 40% of Disney’s operating income, 60% of its free cashflow and as much as half of its share price

The real Disney: The wonderful world of ESPN, the sports network which outmints Mickey Mouse

Mar 30th 2013 |From the print edition

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IN 1996 Warner Brothers released “Space Jam”, a film starring Bugs Bunny and Michael Jordan, a basketball star. It drew sniffy reviews from curmudgeonly critics but made pots of money. The plot was wildly implausible: Mr Jordan and Mr Bunny beat a team of evil aliens at basketball, thus saving everyone from having to work at an alien theme park called Moron Mountain. But that’s fiction. In real life, sports stars and cartoon characters would never work well together.

Or would they? In fact, at Warner Brothers’ great rival, they do. Disney is best known for cartoons that enchant children, from “Snow White” to “The Lion King”. But its most valuable asset is ESPN, a cable sports network beloved by beer-guzzling grown-ups. Disney owns 80%; Hearst, a privately-held media firm, controls the rest. Disney does not disclose the numbers, and estimates vary, but ESPN is probably responsible for 40% of Disney’s operating income, 60% of its free cashflow and as much as half of its share price. Read more of this post

Brands that have died in Britain live on elsewhere

British brands abroad

Going native

Brands that have died in Britain live on elsewhere

Mar 23rd 2013 |From the print edition

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BRITONS were fond of A.1. sauce until the 1950s, when it stopped being widely sold in the country that created it. But like other products the natives have wearied of, A.1. is still avidly consumed elsewhere. American omnivores prize it as a complement to steak.

There are many such commercial expatriates, brands born in Britain but now more at home abroad. Rinso is the top detergent in Indonesia. Italian bambini grow up on Mellin, the distant descendant of a Victorian producer of concentrated milk. Peardrax and Cydrax, fruit-based fizzy drinks sold in Britain until the 1980s, are still popular in Trinidad & Tobago.

The ultimate expatriate power brand is Lifebuoy. William Lever concocted the soap in 1894 and sold it as a means to combat cholera. By the 1930s Lifebuoy marketers had turned their guns on British body odour. It “knocks out B.O.”, the packages promised. Lifebuoy eventually lost its allure in Britain, perhaps because buying it came to be seen as an admission of smelliness. Now Unilever, Lever’s corporate heir, uses it to fight diarrhoea, a menace that kills 1.5m children a year. Hand-washing can cut that toll (and move a lot of soap), the multinational reckons. At this year’s Kumbh Mela, a triennial gathering of tens of millions of Hindus, Lifebuoy seared its hand-washing slogan into unleavened rotis, the pilgrims’ staple.

Empire gave brands “the ability to get global quickly”, notes Robert Opie, a consumer historian whose collection forms the basis of the Museum of Brands, Packaging and Advertising. Some stayed after the sahibs went home. Peek, Frean started baking biscuits in Britain in 1857 and in India in 1924. The Bermondsey factory closed in 1989 but Peek Freans (now comma-less) still take a big bite of the market in Pakistan, where they are baked by the nostalgically named English Biscuit Manufacturers. Mondelez, a food giant, continues to sell them in Canada. Read more of this post

A banking scandal highlights the problem of black money in India

India’s shadow economy

Evasive action

A banking scandal highlights the problem of black money in India

Mar 23rd 2013 | MUMBAI |From the print edition

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THE videos were set to the James Bond theme tune and labelled as a “shocking mega-exposé”. They were released by an investigative website called Cobrapost on March 13th, and have hit the share prices of India’s biggest private-sector banks. The sting consisted of a journalist with a secret camera walking into bank branches, where he claimed to be linked to an unnamed politician whose house could no longer contain his cash. Staff in many branches were only too willing to help launder the money, usually by fiddling the rules for setting up accounts and insurance policies. “Yes, yes, don’t worry, sir, all people do this,” replied one bank official.

The lenders and their regulator are looking into the allegations. Even if they are bogus, they tap into a well of mistrust. A 2009 e-mail claimed that Indians held more money in Swiss banks than people from all other countries combined. It was a hoax, but still went viral.

Gauging the scale of the problem is hard. A 2010 World Bank study of 151 countries concluded that India’s shadow economy, defined as legal activity concealed from the authorities, was equivalent to a fifth of official GDP (confusing matters, it is unclear to what extent India’s official GDP already captures the black economy). That is roughly double the level of the best rich countries, but below the global average and most other emerging nations. The last vaguely official study was in 1985 and had a similar answer—19-21% of official GDP. Read more of this post

Communicating Private Information to the Equity Market before a Dividend Cut: An Empirical Analysis

Communicating Private Information to the Equity Market before a Dividend Cut: An Empirical Analysis

Thomas J. Chemmanur Boston College – Carroll School of Management

Xuan Tian Indiana University – Kelley School of Business

February 2013
Journal of Financial and Quantitative Analysis (JFQA), Forthcoming 

Abstract: 
This paper presents the first empirical analysis of the choice of firms regarding whether or not to release private information (“prepare the market”) in advance of a possible dividend cut, and the consequences of such market preparation. We use a hand-collected data set of dividend cutting firms that allows us to distinguish between prepared and non-prepared dividend cutters and test the implications of two alternative theories: the “signaling through market preparation” theory and the “stock return volatility reduction” theory. We document several important differences between prepared and non-prepared dividend cutters. Overall, our empirical results are consistent with the signaling theory.

The Manual of Ideas: The Proven Framework for Finding the Best Value Investments

The Manual of Ideas: The Proven Framework for Finding the Best Value Investments [Hardcover]

John Mihaljevic (Author)

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Book Description

Publication Date: August 19, 2013

Reveals the proprietary framework used by an exclusive community of top money managers and value investors in their never-ending quest for untapped investment ideas

Considered an indispensable source of cutting-edge research and ideas among the world’s top investment firms and money managers, the journal The Manual of Ideas boasts a subscribers list that reads like a Who’s Who of high finance. Written by that publication’s managing editor and inspired by its mission to serve as an “idea funnel” for the world’s top money managers, this book introduces you to a proven, proprietary framework for finding, researching, analyzing, and implementing the best value investing opportunities. The next best thing to taking a peek under the hoods of some of the most prodigious brains in the business, it gives you uniquely direct access to the thought processes and investment strategies of such super value investors as Warren Buffett, Seth Klarman, Glenn Greenberg, Guy Spier and Joel Greenblatt.

  • Written by the team behind one of the most read and talked-about sources of research and value investing ideas
  • Reviews more than twenty pre-qualified investment ideas and provides an original ranking methodology to help you zero-in on the three to five most compelling investments
  • Delivers a finely-tuned, proprietary investment framework, previously available only to an elite group of TMI subscribers
  • Step-by-step, it walks you through a proven, rigorous approach to finding, researching, analyzing, and implementing worthy ideas

Next Facebook May Be Chinese as Sites Innovate, Not Copy

Next Facebook May Be Chinese as Sites Innovate, Not Copy

Instagram, the photo-sharing app bought by Facebook Inc. (FB) last year, offers special effects that can give pictures a weathered black-and-white cast or retro tints. In Beijing, Xu Chaojun’s PaPa app does that, too. In addition, it lets users attach voice messages that can sound like robots or cats. PaPa notched 10 million downloads in five months from iPhone and Android users and the company released an English- language version, Wave, on Apple Inc. (AAP)’s iTunes on March 10. Chinese Internet companies, such as Alibaba.com Ltd. (1688), have been dismissed as imitators of successful U.S. enterprises like EBay Inc (EBAY) (EBAY). Some have been content to profit from their vast home market. Yet Xu’s firm and others aim to compete globally and many Chinese entrepreneurs are improving on the Western products that inspired them, said Kai-Fu Lee, the former head of Google Inc. (GOOG)’s China operation and founder of venture capital fund Innovation Works.

“Innovation, if it’s defined as inventing the light bulb, might still be a stretch for China,” said Lee, who helped fund PaPa. “To be the first to conceive of the next iPhone may be still a little difficult, but the prospect of making a Facebook, a Twitter or an Instagram, I think that is now, for the first time ever, within reach for the Chinese startup.” Read more of this post

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