How to improve marketing efficiency and measure real marketing ROI
The issue of marketing efficiency and accountability has been around since the very inception of marketing as a discipline at the end of the 19th century. Almost every marketer has made, is making, or will make efforts to show the performance of marketing initiatives. In most cases, these efforts will consist of communications indicators such as unique visitors to a website, click-through ratios, event attendance, generated leads, online reputation or purchase intent.
What these marketers fail to see is that all these metrics are well outside the interests of CEOs and budget planners – to them, these metrics don’t prove marketing’s worth to the business. How do CEOs and budget leaders know whether marketing is good for the business? Usually, they resort to gut feelings and “guesstimates”. If the CEO likes a particular campaign or sponsorship, it was a good investment; if the rest of the company (and the CEO’s friends) spoke highly of an event or a TV spot, then, it was a success.
Some more-demanding companies apply correlation models to attribute sales results to marketing projects. But there are a number of potential pitfalls when using these evaluation tools. In any case, by the time the real financial impact on the business becomes clear, (i.e. the return on investment of the marketing initiative), money has already been spent and, potentially, lost. Remember, businesses go bankrupt slowly and then suddenly.
Another temptation is to apply algorithmic attribution models developed by media and digital marketing platforms. However, secret algorithms that no one understands will never generate results in which marketers can have full confidence. Analytics are credible only if they are robust, and the ones used most often today are not proving to be so robust. More importantly, they are not related to the profitability of the business. The only way to improve marketing efficiency and accountability to the business is by accurately measuring bottom-line indicators.
To truly measure the bottom-line impact of marketing efforts, marketing inputs (yes, marketing generates inputs to the business on top of communications results) must be related to business outputs, and this can only be done by building your own attribution model. It is a complex task at the beginning, but it pays off. A robust attribution model allows the whole organization to see that marketing is an investment, rather than a cost.
Where do you start creating an effective attribution model? Have you checked your marketing plan’s objectives lately? In most cases, they describe a set of activities to be undertaken (“hold a series of events”), with an underlying intention (“to improve relationships with our distribution network”). Marketing is too often planned in an activity-based fashion, with objectives and performance indicators related only to marketing (number of events). An objective like this also has an uncertain success threshold – how will you measure the relationship improvements?
Clear, measurable business-related objectives are the foundations of marketing accountability. Without them, you will never be able to gauge marketing’s worth to the profitability of the business. Clear, accountable-to-the-business, objectives allow marketers to validate projects before investing in them. They facilitate building predictive models and offer unbiased criteria to make go-no-go decisions.
Once you have clear, measurable, business-related marketing objectives, you need to build the relating factors – establish the cause-effect relationship between marketing activities and bottom-line metrics. This is trickier, but no less important to measuring the ROI of your marketing. The relating factors will include two key pieces of knowledge: how many purchases the marketing project impacted, and the actual influence of the project on each purchasing decision. The only way to approach this task is through research.
Finally, your attribution model will need a thorough data collection plan in order to guarantee statistical relevance and credibility. If you did your homework and you worked your plan, at the end of the process you will be able to ascertain what portion of each sale can be attributed to each marketing project. That will allow you to finally know the actual ROI of your marketing.
Hans Rosling states in his book that the claim “things are getting worse” was the sentence about the world that he had heard the most in his life. If we do a quick check of the press of these first days of 2019, we can hear very familiar music: “Rise of the far right in Brazil”, “The year ends as the worst in the history of the Spanish stock exchange since 2010”, “Pessimism up 3 points in Spanish society in the polls”, etc. And one poll conducted in 30 countries by Rosling’s team asked: Do you think the world is better, the same or worse? Over 50% of respondents answered “worse”. By the way, among the thirty-something countries Spain was ninth in the number of negative answers recorded. Yes, we know that negativity sells, that it impregnates analyses of the present and future in our daily conversations and in the media, but we can get away from it. We express ourselves and act as if going to extremes were the only fair and realistic option. Hans Rosling dedicated his life to fighting this and other biases by promoting the constant up-dating and examination of the data, checking the facts by means of reflection, logical argument and down-to-earth conversation with people of all kinds. Factfulness is the outcome of this battle.
It has been said that Rosling’s posthumous book, rather than positive, it was first and foremost a realistic and possible book, as if to underline its anchor in facts, distancing itself from any suspicion of wishful thinking. These doubts disappear when you read the book. What comes to light is not just another guru making indiscriminate and wishful predictions, but a doctor who is an expert in development and social sciences with vast professional experience and thousands of anecdotes about life. Bill Gates pointed out the key to Rosling’s discourse in an interview: “he did not claim that things are necessarily going to get better, but rather, they undoubtedly can get better, in light of the achievements made to dates”. It is true that the Swedish doctor tended to see the glass half-full, but it is also true that he did so cautiously and convincingly. Armed with data, logical arguments and reasoning, he challenged the “excessively dramatic perception of the world” that our brains are prone to present, which makes us distort reality, miss opportunities and above all, condemns us to permanent unhappiness and stress.
Hans Rosling at the European Youth Conference in 2009. Photo: Marc Femenia/TT
Chimpanzees beat us
At conferences with female leaders of the African Union, in hospital or in his classes at the Karolinska Institute in Sweden, Rosling experienced the danger of bias and prejudice first hand, and observed in his students and in other people, the tiresome insistence of our mind to remain steadfast despite the evidence. To prove this statistically, Rosling and his colleagues developed a test that asked about some of the main indicators of poverty, health and development world-wide; general questions whose answers are available on open sources. The questionnaire was completed by some twelve thousand people from fourteen different countries. The average was two right answers out of twelve questions, and up to 15% of those surveyed did not give a single right answer. Why is there such extended and persistent ignorance about the world? The results were lower than one could expect from a random test with chimpanzees. It could not just be a lack of knowledge or the result of fake news. There must have been something else going on, a kind of active erroneous knowledge. How could politicians resolve global issues based systematically on erroneous perceptions? How would business leaders operate with such a distorted view of the world?
Part of the answer lies in the way our brains work. Millions of years of evolution have programmed us to draw quick conclusions, without thinking too much. Although instinctive thought is necessary for a normal life, our “tendency to dramatize” distorts our understanding of reality.
Our prejudices make us miss opportunities
The book by Rosling – and his son Ola and his daughter-in-law Anna– is organized around ten instincts or major tendencies that to a large extent, explain this persistently-erroneous view of the changes and improvements that are transforming the world. A single perspective, the tendency to generalize, fear, negativity or the idea that a person or a culture’s fate is written as something inexorable are just some of these biases, barriers that prevent us from appreciating formidable achievements, never seen before in the history of mankind, attained in an unusually-short period of time. The figures for the reduction of extreme poverty, schooling for girls world-wide, the increase in life expectancy or the percentage of children vaccinated, are just some of the indicators that have experienced impressive improvements, but we systematically refuse to acknowledge them. This is not only unfair, it is also potentially harmful to our welfare and to our individual or collective decisions.
If we can document the fact that 80% of the children in the world have been vaccinated against some disease, this is excellent; but if we look beyond that, as Rosling proposes, it turns out that a complex logistical infrastructure of transport, education and health is required for the vaccines to reach their destination, certainly enough to build factories and set up businesses. If such a network operates in most territories in the world and we ignore it or do not know about it, if we insist on investing in countries with saturated markets and faltering economies, instead of gambling on huge countries that are growing significantly and fast, with a middle class in full expansion, we are missing unrivalled opportunities. Our prejudices and accommodative thoughts – which directors of major companies and agencies are not exempt from – lead us to believe that the countries of the “Third World” remain static and that development will never be possible in them. The same is true with NGOs. If their campaigns continually ignore the major achievements made, they are missing a golden opportunity to tell potential partners and contributors that donations and humanitarian aid work and produce real results. Rosling’s conclusion is clear: “We cannot afford to continue ignoring the real data for making our decisions”.
Mallika Naskar teaching a class in the rural school of Tentulia, India, where she was a pupil. Photo: Global Humanitaria.
The best value of Factfulness
Albeit different in tone, style and of course in specific content, Factfulness could form part of the hypothetical school of “new optimism” that Johan Norberg’s Progress or Steven Pinker’s In Defence of Illustration belong to; a more or less explicit line of discourse that converges on the brave revindication of the values and achievements of liberal democracy, at a time when this is under siege from objectors of all kinds.
In any event, and based on what has been said above, one can understand that the text is not limited to just telling us how wonderful everything is, it also challenges us to think differently and more openly, especially with an empirical base, and broadening the focus to show us the complex dimension of problems. At the end of the day, seeing the glass half full or half empty can be a question of perspective and temperament. The really valuable aspect of Rosling’s work in times of polarization, extremism and trenches, is that he offers us a balanced approach to the major social and economic issues; he flees from exhaustive claims and determinism – and also the worship of figures and numbers – and proposes instead prudent thought informed from different points of view. Furthermore, it must be said, the book is not too highbrow, it has a generally kindly tone that is appreciated, full of clarifying anecdotes and eloquent graphs and illustrations.
Factfulness. Hans Rosling. Deusto. November 2018. 352 pp.
Shipping of one kind or another is expected to continue growing in the next few years, albeit in the midst of many geo-political and commercial uncertainties
The role of China and what happens to its economy, its trade relations and its port strategy will have an impact on how the industry is run
Consolidation of port capacity and shipping lines is a reality and the pace at which technologies are rolled out could change the shipping industry as we know it
Shipping is intrinsically-linked to economic growth. It is driven by global demand and acts as a facilitator for new trading opportunities and growth.
According to figures published by the United Nations Conference on Trade and Development (UNCTAD), the average annual growth rate of shipping is estimated at around 3.8% between 2018 and 2023.
Most influential factors
UNCTAD has identified a set of key trends that are redefining the sector.
On the demand side, geo-political, economic and commercial uncertainty, along with a series of structural changes could have a negative impact. Inward-looking policies and growing protectionist feelings could undermine world economic growth by restricting trade flows and changing its patterns.
The continual deployment of digitalization and electronic commerce and the implementation of the New Silk Road Initiative.
On the supply side, over-optimistic operators competing for market share could order excessive, new capacity, which could worsen shipping market conditions, alter the balance between supply and demand and impact both the levels and the volatility of charter rates, transport costs and earnings.
The consolidation of sea transport through mergers and alliances has increased in recent years, in response to lower levels of demand and shipping capacity with surplus supply dominated by mega container ships. The implication for levels of competition, the potential for abuse of power in the market by the major shipping lines and the associated impact on smaller players are all of concern. Three global shipping alliances dominate the capacity deployed on the three main east to west container routs, which altogether account for 93% of deployed capacity. By joining forces and forming alliances, shippers have enhanced their negotiating power with sea ports when negotiating ports of call and terminal operations.
The restructuring of alliances and the deployment of larger vessels is redefining relations between ports and container shipping lines. Areas of interest include the selection of ports of call, the layout of transport shipping networks, the distribution of costs and profits between containers and ports and the focus used to grant container terminal concessions.
The value of shipping cannot only be determined by the scale. The capacity of the sector to lever important technological advances is increasingly important too.
Finally, efforts to reduce emissions and improve the environmental performance of the multi-national carriers remains high on the agenda
Situation of ports
80% of the world’s merchandise in volume is handled by ports. An important indicator of how well they work and their ability to attract business is the volume that they handle.
The top 5 ports in terms of volume are: Ningbo-Zhoushan, Shanghai, Singapore, Suzhou and Guangzhou (all in China, except for Singapore)
The top 20 ports in the world currently only include three ports outside of Asia: Hedland (Australia), Rotterdam (Netherlands) and South Louisiana (United States). The latest available figures for regions put Asia at the top of the ranking with 63% of global volume, followed by Europe (16%) and North America (8%).
Despite their dominance, Chinese ports are not exempt of risks, according to Xu Lin, an analyst at UBS Securities, trade frictions between the United States and China and additional tariffs have forced an adjustment of shipping times. The same analyst states that the effects will be seen in 2019 and that Chinese ports should seek more sustainable growth by improving their administration and services offered and by seeking consolidation.
Recent decades have also seen the emergence of the United Arab Emirates as a port operator. The Economist highlights DP World, one of the largest shipping companies, that runs operations in 45 countries, in places like London, Rotterdam and since the 90s, in the horn of Africa. The directors believe that the region from Sudan to Somalia needs between 10 and 12 ports; it currently only has half that number.
Europe in turn, could recover importance. According to Bruno Bobone, Chairman of the Portuguese Chamber of Commerce and Industry and Chairman of the Board of Directors of the Pinto Basto Group (family business the leads the Portuguese shipping services sector), Portugal has all the potential to once again become a key player in the sector. In the event of the application to extend the outer limit of its continental shelf prospering, Portuguese territorial waters would reach the size of India. Portugal is at the center of a community of nine Portuguese-speaking countries with almost 300 million consumers distributed over Europe, South America, Asia and Africa and it has the possibility of connecting the economic potential of these countries with other geographies.
At the end of the day, it may not be a question of which countries or regions will control shipping trade, but rather which operating companies control it. This could imply that a small number of companies decide the rate at which innovations and efficiencies are rolled out in handling ports. Technology has the potential to change even the most traditional industries, and it is difficult to predict how the availability and use of technologies like autonomous ships, the extended use of drones, big data and even blockchain applications will end up shaping supply, demand and the decisions that exporters, importers, port operators and shipping lines take in the future.
The increase in electronic waste is a growing environmental and health concern throughout the world
Formalizing larger-scale recycling, standardizing regulations and technological innovation can turn part of the problem into an opportunity
Company decisions about their supply chains, product design and consumer decisions (what to buy, from whom and when to replace it) will play a fundamental role
As world population and disposable income increase, production, consumption and replacement of electronics has also increased, causing problems in handling the waste.
According to the Global E-waste Monitor, the term electronic waste, or e-waste, encompasses all electronic items and their parts that have been discarded by users with no intention of reusing them. It includes a wide variety of products, almost any household or office product with electric circuits, electronic components or battery supply, and it includes six categories, each with a different life cycle, different impacts on the environment and health and different ways of recycling.
Heat Exchange devices, commonly known as cooling and freezing equipment: Refrigerators, freezers, air-conditioning, heating.
Screens, monitors. Typical equipment includes televisions, monitors, laptops, notebooks and tablets
Lamps. Fluorescent tubes, high-intensity discharge and LED
Large appliances. Washing machines, dryers, dish washers, electric stoves, copying equipment and photo-voltaic panels
Small appliances: Vacuum cleaners, microwave ovens, ventilation, toasters, electric kettles, electric shavers, scales, calculators, radios, cameras, electric and electronic toys, small electric and electronic tools, small medical devices, small monitoring and control devices
Small I.T. and telecommunications devices. Mobile phones, global positioning systems (GPS), pocket calculators, routers, personal computers, printers, telephones
Magnitude of the problem
According to The New York Times Magazine, electronic waste has become the fastest-growing source of waste in the world. It has doubled in about a decade and the annual total is expected to reach 57 million tons by 2021. But this explosion could have two sides to it, as an environmental scourge or as an economic resource, because, despite the fact that they often contain lead, mercury and other toxic substances, laptops and telephones also contain valuable elements like gold, silver and copper.
The main problem lies in the fact that only about 20% of electronic waste is collected and recycled, and the destination of the rest is unknown. It is estimated that only 41 countries compile statistics on the problem, and this data cannot keep up with the expansion in the number of artefacts in so many different categories.
According to V. Ranganathan, the informal sector is not sufficiently skilled to dispose of this waste and it is often mixed with other rubbish. The result is that most of these recoverable materials filter into the soil, contaminating large extensions of land making them unusable for farming. Metals like mercury, cadmium and lead, which are found in the circuit boards of these devices, can filter into the water table, causing health problems, such as damage to the brain, liver, kidneys, lungs, nervous system and bones. Households are not immune to this phenomenon either: just like leaky batteries, unused electrical devices slowly release toxic chemicals that represent health hazards in the space where they are stored over time.
Handling electronic waste
Dangerously large quantities of waste build up in many countries, but some actions are starting to appear to process it. In 2018, Hong Kong opened its first government-backed recycling plant for electronic waste, to turn washing machines, computers and television sets into pieces of plastic and steel. The article in The New York Times Magazine also mentions the fact that safer techniques have been thought up in the laboratory for extracting value from electronic waste. One of these isolates rare metal pieces with carbon nanotube technology; another recovers key minerals by bombarding them with submarine sound waves.
Actions to be taken
The key seems to be in the continuous monitoring of this waste and raising consumer and manufacturer awareness of programmed obsolescence. A study published by Greenpeace says that companies in the industry change the design of their products when the market becomes saturated in order to accelerate the replacement cycle by making them difficult to maintain or up-grade, hence shortening the life cycle of perfectly functional devices. They say that Apple, Microsoft and Samsung are going in the wrong direction on this issue, whereas HP, Dell and Fairphone stand out as exceptions. In short, consumers are recommended to choose high-quality, durable and repairable products and they should ensure that the old device is recycled when it is replaced. By the same token, the task for manufacturers, according to this study, is to design for the planet (use the software to extend the life cycle, rather than shortening it), stop using hazardous chemicals in the manufacturing process, use recycled or recyclable material and work with recycling partners to enhance the formalization of the recycling process and maximize the recovery of material.
2018 saw Facebook’s role come into question, because of actions or omissions in handling issues of privacy and political and social issues from USA to Myanmar
Facebook use patterns are starting to change: it has lost users in Europe and the time people spend on its main platform is diminishing
Facebook’s leadership could be in doubt and some changes cannot be ruled out. If these translate into models more in line with the interests of the public, 2019 could be an opportunity for reform
Last year was full of bad news for Facebook. Many reports have called into question the role of the internet giant in society and its future feasibility. Should Facebook attempt to reinvent itself? How likely is it to do so, if we take the handling of the crises last year as a reference?
Social media or political platform?
2018 started with Facebook promising to post more relevant contents for users. But in March, the first major scandal focused attention, published by The New York Times.
Cambridge Analytica, a political consultant hired by Donald Trump in the 2016 campaign, gained access to the private information of over 50 million Facebook users. The firm offered tools that could identify the personalities of voters and influence their behavior. The data obtained included details of the identities of users, their network of friends and their “likes”. The idea was to use this information to target these audiences with digital advertisements.
The consternation increased in August, when a Reuters investigation report showed the late reaction of Facebook to the posts promoting radical hate in Myanmar: four months after Mark Zuckerberg declared before United States senators that the company was hiring dozens of Burmese-speakers to review them, over 1,000 examples of comments, images and videos attacking the Rohingya and other Muslims in Myanmar were found. Most of the content was in the local language, including material that had been posted up to six years ago.
Facebook’s dominance in Myanmar is explained by two factors. First, the telecommunications companies that entered the market after it was deregulated granted access to Facebook by exonerating the cost of data. The other factor is that the company supported the Burmese alphabet, unlike other internet giants. Another New York Times report explored how some accounts inciting hate could be linked to a military complex, and the Facebook operation could have employed up to 700 people. This contrasts with the effort made to filter and translate content: Facebook used an external consultant for this, which employed 60 people.
At the close of the year, The New York Times published an article stating that the social media share more personal information of its users with tech giants like Microsoft, Amazon or Netflix than had had been published to date. According to this information, Mark Zuckerberg’s company shared data without the consent of users.
Facebook authorized Bing (the Microsoft search engine) to see all the names of the friends of Facebook users. Netflix and Spotify were allowed to read the private messages of its users. In total, there were some 150 firms, mostly tech businesses, that benefited from these agreements to access Facebook data.
Later, just before the end of the year, a law suit was filed by the DC District Attorney’s office in Washington, over the Cambridge Analytica scandal.
Doubts over long-term growth
Apart from all the above, in October an article was published stating that the number of Europeans using the platform daily fell from 279 to 278 million, while monthly users fell from 376 to 375 million. The global number of users continued to grow however (2.2bn a month).
According to The Economist, Facebook remains strong, but it does face a range of challenges, especially in the changing ways in which people use its products, which could have an impact on its profits. Adults over 18 spend 31% less time on the platform compared with 2 years ago, which would translate into less opportunities to sell advertising. One possible response is Instagram, a platform that is growing the number of adverts that users see: disagreement on pushing advertising so much on Instagram is one of the reasons why the founders left Facebook in October. Advertising now accounts for one fifth of posts seen on Instagram. This could be a risk, as people could choose to spend less time there, as they did with Facebook.
It would appear that Facebook’s political controversies have not scared off advertisers, but this could change in 2019. The Marketing industry has two main complaints: one, that users are not as motivated by adverts despite prices, and the other, pertaining to a possible exaggeration of the scope and audience of the adverts. Facebook promised to reach out to more people between 18 and 34 in the United States than the entire population of this age group, and it maintains this allegation, despite a class action.
People speculate that, if results and the perception do not change, Sheryl Sandberg, the Chief Operating Officer, could be replaced. As Mark Zuckerberg controls a majority stake of voting rights, it is unlikely that he will leave. But the pressure on him could increase.
Can transformation start with people?
According to an article published in the Financial Times, Facebook employees still consider the firm the best place to work in the United States (according to a Glassdoor poll), but an internal poll published for the first time in the Wall Street Journal found that only half of its employees are optimistic about the future (32 percentage points down against last year) and only 53% of employees (-19 pp) consider that the company was helping to make the world a better place. According to the article, the fact that employees are paid in stock options means that transparency is not always aligned with their financial interests.
It closes with the seemingly reasonable idea that employees who are only motivated by money should leave and those who are driven by the mission should not receive any more unpleasant surprises. If the company leadership were more open with its employees about its problems, it could attract the right kind of employees to tackle a clean-up.
A model based on interests more in line with the public seems to be the solution. Will the founder relinquish some control and promote greater transparency this year
We reflect on some of the most important and potentially destabilizing political leaders and events of recent times. Trump, Salvini, Bolsonaro, and the driving forces behind the Brexit – but not only them – are figuring in a political phenomenon that, while threatening for some, is a reason to hope for something different and better for others. Be that as it may, the terms “populism” and “populist” have taken on such pre-eminence in the public debate that they have become a genuine catch-all, a label attributed to all types of parties, movements and attitudes across the ideological spectrum and at different historical stages, with a profusion that very much undermines their meanings and makes them difficult to understand.
The result of the need to understand and to address the issue has led to the production of tons of literature of mixed quality and depth. In the wake of the enormous interest it raises, political scientists, journalists, philosophers, sociologists and economists have traced genealogies and established taxonomies for the phenomenon in its different manifestations and in different latitudes. For this review, we look at a bibliographical selection comprising four authors and three books: El pueblo contra la democracia: por qué nuestra libertad está en peligro y cómo salvarla (The People vs. Democracy: Why Our Freedom Is in Danger and How to Save It), by Yashca Mounk; Cómo mueren las democracias (How Democracies Die), by Steven Levitsky and Daniel Ziblatt; and El regreso liberal: Más allá de la política de la identidad (The Once and Future Liberal: After Identity Politics), by Mark Lilla. The three books are among the leading texts on populism in the current Spanish-language literature. Their authors’ different perspectives are complementary and sometimes controversial, but well founded. While Mounk offers us a macro-analysis of the socio-economic evolution that has led us to this point, Levitsky and Ziblatt explain – via a comparative historical analysis – the way in which populism undermines democracy from within, and the role of institutions and political actors in these processes. On the other hand, Mark Lilla analyses a specific case. From a more militant perspective, he studies the debacle of the Democratic Party and the absence of a liberal vision of society in the face of the United States’ extreme right wing.
While these lines were being written, a very real and tangible consequence of what has been called “populist policies” has begun to materialize: the United Kingdom is leaving the European Union. Its leaders acknowledge the damage to the British economy caused by the Brexit, estimated at 3.9% of GDP for 15 years, in the event of an agreement, and 9% if none is reached. Beyond the noise, political decisions – populist or not – have real consequences. What is going on? Are we experiencing a “populist moment” or are we rather entering a long-term “populist period”?
The path to date:
Following the fall of the Soviet Union, it was believed that the final triumph of liberal democracy worldwide would be simply a matter of time. This was the “end of history” predicted by Fukuyama. In the U.S., the standard of living had doubled from 1935 to1960, and again from 1960-1985. From then on, however, it began to stagnate. Following the financial crisis launched in 2007, the feeling in the U.S. and most of the West has been a frank state of regression. In addition, societies that are traditionally homogenous or that have a clear ethnic and cultural hierarchy have become distinctly multicultural societies in recent decades, where minorities no longer settle for nominal equality, and where other majority sectors perceive these changes as a threat. Finally, until yesterday afternoon, the mass media were the exclusive preserve of the political and economic elites. In Mounk’s view, this condition allowed the political establishment to marginalize extreme political views. Currently, the democratization of the media has greatly narrowed the distance between the center and the political fringe, and given space and scope to the most outlandish and radical of political views.
This general evolution of events, as Mounk explained, has challenged two fundamental general consensuses that have been deeply rooted since the end of the Cold War: neither is the stability of democracy in the world assured, nor are liberalism and democracy inseparable. In this regard, a very important drift has been pointed out: it is not just about citizens showing a growing skepticism and weariness towards liberal institutions; it is that the political elites themselves have become increasingly more isolated. Thus, apparently a kind of liberalism that respected procedures and individual rights would seemingly have been established, but at the same time, broad masses of voters seemed to perceive that their votes were worthless and that the government was not operating in accord with their desires. This breach between liberalism — with the principle of individual rights — and democracy — with the precept of the will of the people — creates tensions that are being exploited by populist alternatives.
The basic pillars of populism:
The range from Rodrigo Duterte in the Philippines to Alexis Tsipras in Greece gives us a good idea of the great complexity and diversity of the populist phenomenon. However, it is possible to identify basic principles that illustrate the populist way of seeing the world and politics:
Politics is a much simpler matter than traditional politicians claim. People instinctively know what must be done.
The need for an “honest man” able to share the people’s vision and prepared to carry it out regardless of institutional obstacles.
The search for a scapegoat: China, foreigners, terrorists, Muslims, the establishment, the media or the capitalists… ultimately, those responsible for the stagnation of incomes and the threat to identity.
In a certain sense – and here comes the paradox pointed out by Mounk – populist leaders would seemingly be more democratic than traditional politicians are. They would strongly believe that the principles and objectives held by an alleged social majority should be carried out at any cost, because “it is what the people want,” and no individual right or institution should oppose the overall voice of the people. Many of the major populist movements would seemingly be profoundly illiberal, argues Mounk, but not necessarily undemocratic. The map of the dispute drawn would then be among the “illiberal democracies”, which endanger individual and minority rights, and “non-democratic liberalism,” in which rights and guarantees are theoretically respected, but where democracy, in its etymological sense, would not work.
“Illiberal democracies” is nothing more than one of the possible terms coined to designate the new movements that call into question modern liberal democracy as we know it. Regardless of the parallelisms made with the dictatorships of the 1930s, the morphology and the modus operandi of the new autocrats have changed. There are practically no remaining Fascist, Communist or military governments operating as unbridled dictatorships in the West. People continue to vote, while elected presidents – under color of law– promote measures that actually subvert democracy. With the excuse of fighting corruption or improving the electoral system, they gradually undermine key institutions, make attempts to control the judiciary, or bribe and pressure the media. For many, this progressive deterioration of democracy is nearly imperceptible. Levitsky and Ziblatt use their comparative method to investigate what past politicians did wrong that opened the doors to potential dictators or, instead, what strategies they used to keep extremists away from power. The conclusions of their study reveal great similarities between seemingly very different authoritarian populisms.
The case of the United States:
As the leading world power and one of the world’s oldest and most solid liberal democracies, the rise of Trumpism in the US has become one of the cases of populism most covered by the media. Lilla, Levitsky, Ziblatt or Mounk point out the decade of 1980-90 – Reagan’s America – was a key turning point for the progressive increase of political polarization in the country to the present time. In his book, Lilla analyzes the Democratic election platform and campaign, highlighting their inability to create an ambitious and inclusive vision of the country. At the expensive of a discourse inclusive of all citizens, the American left seemingly drifted to minority identity politics, leaving the field wide open to the reactionary message of the extreme right, the message that successfully appeals to the most deep-seated feelings and fears of its voters. Mark Lilla’s essay is useful in extrapolating some lessons on political polarization and its transfer to ethnic and cultural debate; the breeding ground that Levitsky and Ziblatt pointed out as a necessary condition for the promotion of populism and the progressive death of democracies.
What to do:
Although the first big wave of authoritarian populism has come to power in the United States, Hungary, Italy and Brazil (among other countries) the real political, economic and social consequences of the phenomenon – as well as a possible second wave in countries such as France or Germany – has not yet been well gauged. The same thing is true of prescribing remedies to fight it. However, Mounk proposes a joint action plan in various areas:
On the economic side, he recommends effective policies to mitigate inequality and to support – to the extent possible – the aspiration to improved standards of living. The equitable sharing of economic growth – argues the political scientist – is not only a question of distributive justice, but also a critical factor for political stability.
In the geo-strategic order – and contrary to the current general body of opinion – he argues that, in order to benefit from globalization, the nation-state should recovered as a relevant agent in major global decisions.
With regard to the construction of a common imaginary – and in connection with Mark Lilla – he points out the importance of building a discourse whose watchword will be plural and multi-ethnic democracy – where the elements that unite us are emphasized more than those that separate us.
Schools and universities need to regain their role in educating citizens within the framework of liberal democracy.
On the other hand, Ziblatt and Levitsky emphasize the importance of the behavior of the traditional parties’ political elite. They also address a crucial issue: if all the containment mechanisms have failed and authoritarian politicians have come to power, would the institutions be a sufficient deterrent for this type of ruler? From the perspective of a case study, will United States institutions stop the Trumpism project? The response of Harvard professors is that they are not enough on their own. Sound and concise democratic rules are required, and an active constitutional defense from the parties and organized citizens. The non-written rules – those that were key to the political stability of the United States throughout the 20th century – are also important. To wit: mutual tolerance between rival parties and the containment of politicians themselves when exercising their constitutional prerogatives.
Cómo mueren las democracias. Steven Levitsky and Daniel Ziblatt. Ariel, September 2018. 336 pp.
El pueblo contra la democracia.Por qué nuestra libertad está en peligro y cómo salvarla. Yascha Mounk. Paidós, September 2018. 416 pp.
El regreso liberal.Más allá de la política de la identidad. Mark Lilla. Debate, May 2018. 160 pp.
Health tourism has countless definitions and difficulties in measuring it make it more difficult to discover all its rough edges.
The leading countries in the sub-sector are renown for specific medical specialities, or for the advantages they offer in the use of technology. The case of Malaysia stands out for its institutional co-ordination.
Technology can be an important factor in reducing uncertainties concerning the choice of medical treatments in other countries.
The definitions of what constitutes health tourism and medical tourism vary from one country to another and this makes it difficult to measure it accurately. The EU includes 3 sub-categories: medical tourism as such (tourism for curative purposes), welfare tourism and welfare and spa tourism (the latter two overlap). According to the World Health Organisation, there are also difficulties to obtain data, because this is located in countless governmental registries, in reviews of health systems, and even in confidential data bases belonging to insurance companies.
The Economist quotes several estimates of the market value, which could amount to $60bn a year, and it says that the increase in middle-class patients in Asia and Africa translates into more people willing to spend money if they cannot find what they need at home. In the same way, consumers have incentives to travel, given the price differences between countries for the same treatment. A valve replacement costs €30,000 in Germany, and it can cost half of that in Austria, with very little or no reduction in quality. According to Deloitte, spending more on health does not always lead to better results, for example, in 2016, the United States spent 16.9% of its GDP on health, far more than its peers, but it is still in the lower half of the OECD ranking of life expectancy.
Cost, connectivity from country of origin and the level of expertise seem to play an important role.
Some governments like South Korea, Dubai or Malaysia have invested in creating regional centres to attract foreign patients. The journal Medical Tourism mentions the ten top destinations:
India: Quality and low cost, accredited hospitals and short waiting times
Brazil: Plastic surgery and cosmetic hub at reasonable prices
Malaysia: Comfort for the patient, low costs and specific services with presence in airports for travellers of this kind, provided by the Malaysia Healthcare Travel Council, MHTC, an umbrella group for all the ministries and agencies involved
Thailand: Largest number of accredited hospitals in S.E. Asia. Known for cosmetic and dermatological procedures. It has the International Bumrungrad Hospital in Bangkok, duly accredited and attending 400,000 medical tourists a year.
Turkey: Short waiting times and quality in the surgical areas of transplants, radio-therapy, orthopaedic surgery, neuro-surgery and genome medicine. Its main airlines also offer discounts for medical tourists
Mexico: Known for its edge in dental care and cosmetic surgery, viable alternative for patients from the United States
Costa Rica: Low cost and high rankings (above Canada and USA) in dental care and cosmetic surgery. It also builds its reputation on ophthalmological surgery and oncological therapies.
Taiwan: Positioning itself as a hub for treating heart and orthopaedic diseases. Leader in kidney transplants in Asia.
South Korea: One of the most technologically-advanced countries, cutting-edge technology and trained personnel. Extensive insurance cover offered to medical tourists
Singapore: Cutting-edge hospitals and, in general, one of the most efficient health systems in the world.
Diagnosis of Europe
An investigation by the European Parliament offers some clarity about the region. The volume of health tourists was estimated at around 56m people, and it contributes approximately 4.6% of total revenues from tourism in the EU member states. Over three quarters of those revenues are also concentrated in 5 countries: Germany, France, Poland, Italy and Sweden, and two thirds comes from welfare tourism.
It is also estimated that health tourism can have a beneficial effect on the labour market, and it can help to both reduce the seasonality of tourism and act as an incentive to environmental conservation, as clean surroundings are an important factor when choosing a destination for this purpose.
However, the same investigation identified insufficient collaboration in Europe between destinations, companies and other stakeholders, and a lack of specific regulation and joint promotion.
Despite all the above, technology can play an important role in extending awareness of this increasingly important niche. The Economist talks about two on-line firms Qunomedical and Medigo, based in Berlin, which allow patients to seek medical treatment from a wide selection of providers, offering clear information about prices and quality of services. Both transparently charge hospitals and clinics listed commissions, and Medigo also charges patients and corporate clients commissions. Patients classify and human advisors are also available to help make the decision.
A combination of an increase in the use of data and better institutional co-ordination could help to organise better strategies for the sub-sector. The most likely in the short-term is that we continue to hear news of the countries that decided to work on health tourism in a co-ordinated fashion some years ago.
Both in Europe and Latin America, the rise and influence of populist movements and leaders has been consolidated in 2018
Populism has no ideology, but it is a political practise that responds emotionally to the problems of liberal democracies and generates positions that de-legitimise the adversary.
An exercise in self-criticism and renewed policies and messages from liberal parties could contain the rise in populism, but the question remains open.
The dynamism of populist movements cannot be denied. According to a Report by the Tony Blair Institute for Global Change, the attraction of populist parties in Europe has increased in the last twenty years. Populist parties captured 9.2% of the votes in Europe in 2000, and 31.6% in 2017. The strengthening of the extreme right in Western Europe has forced centre-right parties to take more extreme stances, especially on immigration. Their presence has also made it difficult to forge ideologically-coherent coalitions.
The most recent European examples include:
In late 2017, the extreme right party Alternativ für Deutschland won 12.7% of the votes in Germany, its best ever result.
On the 14th of March 2018, the extreme right-wing party Lega Nord got 17.4% of the vote in Italy and the popularity of its leader, Matteo Salvini, is on the rise. The country is governed by a right-left-wing coalition.
In April, Hungarian prime minister Victor Orban comfortably assured a third mandate in an election dominated by the matter of immigration.
In September, anti-immigration party Sverigedemokraterna (Swedish Democrats), got 18% in the midst of a very complicated correlation of parliamentary forces.
On the other hand, the two largest economies of Latin America voted en masse for candidates with populist traits. In July, Andrés Manuel Lopez Obrador (AMLO) in Mexico, in October, Jair Bolsonaro in Brazil.
According to Marta Lagos, executive director of Latinobarómetro, the election of AMLO in Mexico shows how outsiders can become the new establishment. Electing a “non-politician” who condemns traditional politics is the flavour of the month in a region where politics is called into question. Latin America has 650m inhabitants, the two presidents elect represent 329 million inhabitants (Brazil 207 and Mexico 122 million). She concludes by saying that “The main problem faced by democracies in Latin America is the deterioration of the elites, corruption and the mistrust of the man-in-the-street in the institutions of democracy, on top of the lack of democratic leadership by their leaders”
According to the Latinbarómetro report, only 9 of the 18 countries studied in the region showed a support for democracy greater or equal to 50%, led by Venezuela, with 75%, followed by Costa Rica with 63%, Uruguay with 61% and Argentina with 59%. At the other end of the spectrum are those with least support: El Salvador and Guatemala with 26%, followed by Brazil and Honduras, 34%.
Is populism an ideology?
The Report from the Tony Blair Institute for Global Change explains some aspects of its definition. It does not consider populism an ideology, but rather a logic of political organisation centred on a distinction between friends and enemies, where those who support the populists are represented as legitimate and their opposition as illegitimate. And this can happen at any point on the political spectrum, both on the extreme right and on the extreme left. Secondly, it only considers populists the parties and leaders that claim to represent the true will of the people in opposition to the local elites, immigrants, ethnic, religious groups or sexual minorities.
According to William Galston in an article published for the think-tank the Brooking Institution, it is obvious that European populism has gained strength from its opposition to mass immigration, cultural liberalisation and the perceived relinquishing of national sovereignty to distant international organisms. It adds that, if nothing is done, the rise in anti-immigrant and anti-international feelings could have serious consequences for liberal democracy.
Scenarios and possible answers
According to the Institute for Global Change report, there are three basic future scenarios for populism in Europe. Populism could be a harmless interlude. Or it could represent the new normal, changing public politics for a long time, without representing a real threat to the stability of the system. It could also be the harbinger of a democratic consolidation, increasing the chances that the future of European democracy is facing a greater threat than many social scientists believe.
As for Latin America, the situation there is more volatile, and despite facing different problems, parallelisms can be drawn with European populism: its rise has also been marked by a perceived rebellion against economic or political elites. And institutional weakness could make it more difficult to overcome.
One alternative mentioned in The Economist in counter-position to the rise in populism is a renewal of liberal thought and practice world-wide. They claim that liberals should spend less time disparaging their critics as stupid or fanatics and more time fixing what is wrong. They should own nationalism and fill it with an inclusive civic pride, and re-discover their belief in the dignity and autonomy of the individual by reducing their own privileges. They conclude that, if they prevail, it will be because their ideas are superior in their ability to spread freedom and prosperity.
Will liberals be able to effectively communicate the above in 2019 and further? The electoral process of the coming months will contribute to the answer.
The demands of economic development and the deterioration of existing infrastructure are factors that make an integral approach to developing infrastructure imperative.
Funding is critical; it is not enough to rely only on the state and many countries of the world show gaps in this regard.
Flexibility of use and prioritisation in execution are important factors in the future development of infrastructure. A more efficient approach during execution and maintaining existing infrastructure can help to reduce the financial pressure.
According to a report by McKinsey, the world now invests 14% of global GDP in infrastructure and property assets. The deterioration of existing infrastructure, a growing population and the demands for economic development drive nations to allocate more funds to transport, electricity and other systems that galvanise economic growth.
According to the same study, 54% of the world’s needs are in Asia, most in the two fastest growing economies and the most populated countries. China represents 34% of the global total and India 8%. The trend is also for investment to continue to flow into the emerging markets, accounting for two thirds of global investment by 2035.
Despite this, there is a US$5.5Tr deficit between now and 2035, with regional variations.
Countries like Australia, China and Japan have invested enough to exceed their projected investment needs and they only need to invest a lower percentage of their GDP than they have in the past. Germany, the United Kingdom and the United States on the other hand, have significant short-falls between their current spending and what they require.
The largest gaps could be in Brazil, Indonesia and Mexico, reflecting the fact that this is where most of the demand for infrastructure is located.
Many G20 countries have started to take action based on this pressing investment need. The members of the European Union, for example, have increased their expected investment rate. In the United States, investment in infrastructure seems to have risen on the agenda and President Trump himself has identified this as a potential area of collaboration with the Democratic party.
On the other hand, the World Economic Forum identifies infrastructure as one of the pillars of competitiveness, and it has drawn up a ranking on infrastructure qualitybased on a variety of criteria: connectivity of roads, their quality, railway density, efficiency of train services, air connectivity, efficiency in air transport services, shipping connections, efficiency of port services, electrification rate, losses in electricity distribution, reliability of water supply and exposure to non-drinkable water.
The leaders of this ranking are as follows:
KPMG has identified a series of emerging trends that define the development of infrastructure in the short term that could help manage it:
Competition among opposing forces: Public policy makers need to build bridges between opposing visions and balance the needs of the different stakeholders. The challenge is to create a shared future while at the same time taking difficult decisions, such as deciding between funding health infrastructure for the elderly or mobility for the millennials. Against this backdrop, we need better data and more sophisticated analytical tools to obtain more accurate forecasts.
Planners include flexibility: The design and procurement of projects are expected to take into account a range of different possible futures. For example, when an electric power line is built, thought must be given to how electric vehicles could affect the nature of demand.
Sustainability climbs up the agenda: The vision of sustainability will expand to create more value and this includes financial sustainability (structures must be relevant and appropriate), operational sustainability (the technologies applied to the assets must be the best to optimise their performance), technological sustainability (consider both the feasibility and the possible obsolescence of the base technology) and social sustainability (benefits must reach all levels).
The rhythm of development under the microscope: Countries are rethinking the rhythm of planning and execution. In developing markets, this could translate into a slower rhythm to think about the priority of projects in terms of appropriateness and sustainability. In mature markets, it could mean a faster pace, accelerating and standardising these planning, approval and execution processes.
Security becomes critical: The expansion of the interconnectivity of physical infrastructure makes entire systems vulnerable to hackers. Standards are improving and governments have identified strategic assets and have started to determine clear lines to protect them.
Alignment between payers, financers and beneficiaries: The balance between who pays and who benefits from infrastructure development is expected to be taken into account and discussed.
Price models mature: Extended application of dynamic price models, including variables like the ability to pay, the value they add to a service and the urgency of its use, and regulators thinking how these models can be applied fairly.
The benefits of sharing data become more evident: This would lead governments to acquire more skills in handling, sharing and using data in different departments and jurisdictions and among the different players involved in providing the services.
Re-convergence of assets: The dividing line between the different asset classes and between investors in infrastructure and investors in property assets becomes blurred, as property assets are an essential component of any infrastructure project. Real estate private equity companies can be seen to set up infrastructure funds.
Reasons for optimism
According to McKinsey, there is a lot of room for improvement in the effectiveness of managing infrastructure. An approach based on facts, fluid execution and optimising the maintenance of existing infrastructure could close the gap and reduce costs by more than $1Tr a year for the same amount of infrastructure.
Neither would it be unlikely that some of the aforementioned countries of the world that lead infrastructure development globally share best practises and contribute to the debate on how to build infrastructure capable of boosting long-term, global economic growth and reduce the funding gap.
By some estimates, about 30% of the human population is overweight. Studies blame junk food, stress and even technology for this modern scourge. The truth is that these numbers could be reduced significantly if people simply decided to do something about it. There are more and more opportunities to consume healthier food and to set aside the smart phone in favor of physical exercise. The problem is that people prefer to take easy way out and are loathe to make decisions that require additional effort.
In business, things are not much different. Lack of decision-making leads companies to become bloated. Many will eventually succumb under their own weight. Professors Vijay Govindarajan and Anap Srivstava of the University of Dartmouth have studied in detail the evolution of companies since 1960. Their research shows that companies established before 1970 had a 92% probability of surviving at least five years. For companies established after 2000, however, this statistic drops to 63%. The study examined nearly 30,000 companies that traded on U.S. stock exchanges between 1960 and 2009. 80% of the companies that were born before 1980 are no longer around today. The lack of rapid decision-making to respond to changing market conditions can lead some companies –including one-time market leaders– to enter a state of permanent torpor. They don’t survive long. Their passivity is an open invitation to younger, more agile ventures, which ultimately take their place.
Corporate indecision and paralysis comes from the top, starting with the CEO, the chairman and board of directors. Too often, board members prefer the status quo and simply rubberstamp management’s plans and policies. Those who push for change are too often seen as a threat.
When companies run into trouble, a change of top management can be the right answer. If new leadership is promoted from within, decision-making power will be given to people who know the company’s culture and strategy. That might be a good thing, but more likely it will only lead to more of the same. Sometimes a leader is brought in from outside the company, someone who brings new ideas to help the company recover and expand. But even with effective change at the top, many companies still cannot undergo the kind of rapid transformation and re-tooling and reinvention they really need.
To achieve meaningful change, what companies often need are disruptors, leaders who can instill a completely new mindset, a new culture, a new work ethic.
These dynamic change-agents don’t need to have any prior experience in the company or in the industry to be effective. What they do need is a set of keen analytical skills to understand the company, the market, the competition, the problems and the opportunities that lie ahead, as well as a laser-like focus on communicating and executing a new way forward.
High-paid executives with short-term incentives can be a recipe for disaster. Too many, despite years of poor results, leave with golden parachutes, even when their companies may be headed for bankruptcy. Too many fat-cat executives are too comfortable in their jobs, more focused on looking after their personal interests than those of the shareholders. And yet, they still get paid big bucks while delivering poor results. So, let’s be clear: Creating value for the shareholders should be the top objective for any CEO. This can be achieved by efficiently growing the company, while continuously evolving in response to new challenges. If this is not the case, the board of directors has an obligation to replace the CEO, soon.