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Tax has a big data problem.We’re out to solve it.The data the Tax department needs is everywhere. And that’s the problem. It originates in different ERPs, business systems, and spreadsheets. Some located around the world. Some owned by Finance. And none of it tax-sensitized. Vertex® Enterprise changes everything. It gives Tax the right data. In a tax-ready format. For current and past periods. For use across the income tax and transaction tax lifecycles. All in one place. Now, for the first time, Tax is in command of their own data. Now, improved speed and control are tax possible. Insight is tax possible. Creating real business value is tax possible.

Tax Performance Management is tax possible.

Vertex EnterpriseIncome Tax · CbCR · Indirect Tax · Value Added Tax

i NVEST 2018 speaks of the top five global business destinations for meetings, congresses, exhibitions, business events,

incentive travel and corporate hospitality and of an FDI global hot spot that’s Germany’s second largest city.

There’s also must-know developments on those organisations driving the agendas in their respective fields. Of particular note here is Invest 2018’s shining of the spotlight on to Dublin Port, the gateway to Western Europe, which is currently undergoing a transformational redevelopment to meet a huge year-on-year increase in demand.

Invest 2018 also talks of compliance and of the fact that there is no longer anywhere to hide from the long arm of the law. Good to know then, that the likes of the Cook Islands and Antigua exist out there, so providing evidence of international finance centres’ forces for good credentials, contrary to popular belief. Welcome news too,

Disclaimer: The information contained in this publication has been obtained from sources the proprietors believe to be correct. However, the publishers cannot be held responsible for any errors or omissions. In no way does any of the content constitute legal advice and the publishers and staff accept no responsibility nor legal liability for any loss or damage caused by or arising from reliance on it. Persons are reminded that independent professional advice should be sought before any investment decisions are made.

Copyright: No part of this publication may be reproduced without the prior consent of the publisher. © Invest 2018. Unless otherwise stated photographic content is licensed under the Creative Commons (cc) attribution license. To view a copy of this license, visit http://creativecommons.org/licenses/by/3.0/

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that Vertex Inc has engineered nothing short of a revolution in the tax arena by unifying all data into a single platform.

There are, in fact, many reasons to be cheerful: Not least, that diversity and inclusion are finally nearing the top of the political and corporate agendas, or that many economies are edging ever further away from the pits of despair that marked them for much of the last decade.

Still, sometimes, it’s a good thing to take your medicine, for it’s a more measured investor that’s come out the other side, such that the case for investment must these days be a compelling one. Be prepared, then, to question your investment criteria and to look beyond the usual suspects. To set you on your way, Invest 2018 rounds off with analyses of the merits of TCO, gold and of the ‘just-in-time’ methodology. All very important stuff to know in this fascinating year to come.

ContentsDublin Port Goes from Strength to Strength

Dublin for Cruises Pat Ward, Head of Corporate Services at Dublin Port Company talks of Dublin Port’s growing credentials as a cruise destination.

Strong Industry, Strong EventSeatrade Europe continues to hold its position as a must-attend event for the industry.

Vertex: Tax Data Management ExpertsVertex’s Chief Tax Office (CTO) provides insight regarding the impact of tax regulations, policy, enforcement and emerging technology trends on global tax department operations.

Paradise Lost: The Imminent Fall of Tax HavensBEPS multilateral instrument will close loopholes in thousands of tax treaties worldwide.

Global Business DestinationsMalta, Nuremberg, Vancouver, Cape Town and Sydney are the best in the world for meetings, congresses, exhibitions, business events, incentive travel and corporate hospitality.

Access All Areas in MaltaInterview with Peter Cauchi, Head of Conventions Malta, an arm of the Malta Tourism Authority (MTA).

International Financial ServicesThe Cook Islands and Antigua exhibit all that’s best about International Finance Centres (IFCs).

Cook Islands: Your Asia-Pacific PartnerBy Nicky Burridge.

GDP Fuels Inequality and Short-TermismFrom the World Economic Forum.

Slack in Global Economy Expected to FadeGlobal economy to edge up to 3.1 percent in 2018, but future potential growth a concern. says World Bank.

TCO is the Way to GoFocusing on upfront cost is a false economy.

Investing in the BoardDiversified boards make for more effective boards.

Gold’s FortunesInvestors are coming to realise the extent to which gold retains its purchasing power.

Just in Time, Not Just in CaseDriving continuous improvement in material handling is helping to meet the challenges of just in time across a range of industries.

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Cook IslandsInterview with Tamatoa Jonassen, CEO of the Cook Islands Financial Services Development Authority (FSDA).

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The Best of GermanyHamburg for FDI.

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snapshot of Ireland right now sees a country marked by strong growth, falling public debt and unemployment,

low inflation and corporate taxation and a highly-skilled tech workforce. Consequently, it continues to appeal as a European base for US multinationals like Google, Facebook, Accenture, Amazon and Airbnb, all of which call Dublin home, such that Dublin Port has come to be known as ‘silicon docks’.

It is a state of affairs set to be even more significant after Brexit, when Ireland will come to represent the EU’s largest English-speaking member and when Dublin hopes to see other companies and the human capital that comes with them, relocate from London.

All the signs point to growth continuing for many years.After initially struggling after the global financial crash of 2008, Ireland’s hugely impressive recent economic figures ensure the Celtic Phoenix constitutes one of the premium global foreign direct investment opportunities for 2018.

Dublin Port’s figures, meanwhile, can be seen as an accurate barometer of the wider region and

Dublin Port

country’s fortunes. These have seen trade volumes up 30% in the last five years and growth of 4.2% in the first nine months of 2017 alone. Meanwhile a new service to Zeebrugge and Rotterdam in continental Europe sees the port playing regular host to CLdN’s MV Celine, the largest Ro-Ro ship ever to call there, so providing additional capacity and flexibility. Dublin Port is thinking big, just like Ireland.

What’s notable about these growth figures is that they not only show significant year-on-year growth, but the port to be in rude health across the board. For example, Ro-Ro services between Ireland and Britain grew to 6.2%, while Lo-Lo activity saw an uplift of some 4.1% across the first three quarters of 2017. Ferry tourism passenger volumes over the same period grew strongly by 2.4% to 1.5 million, while cruise tourism also shows a marked upward trajectory. So struck, in fact, have Celebrity Cruises been by Dublin’s fortunes, they have decided to make it their home port for the early summer season in 2018, an investment estimated to be worth some €6m to the region in terms of knock-on impact. Beyond this, both Celebrity and Princess Cruises have committed to homeporting in 2019.

All the signs point to growth continuing for many years, such that a case for further increasing the capacity of the port has had to be made. This proposed additional development is set to add to ongoing work on the port’s first major Masterplan project: the Alexandra Basin Redevelopment

(ABR), which is allowing bigger container and cruise ships to use the facility.

The revised proposal amounts to a quest to connect and bring all dormant port land assets into use, with the first step being construction of a bridge to port lands on the Poolbeg Peninsula. Meanwhile, an ‘inland port’ project on 44 hectares of port-owned land near the airport is also currently underway.

The vision comes under the umbrella of the wider Masterplan running to 2040, work around which is being facilitated, in part, by the granting of €100m of long-term debt finance by the European Investment Bank, convinced as they have been, of the merits of the initiative. This echoes political recognition from within Ireland itself as to the importance for the country of increased port capacity in Dublin. No surprise, perhaps, when one considers Dublin Port accounts for some 50% of the merchandise trade into and out of the country.

Once the second phase receives the green light, it will bring clarity and certainty to all stakeholders. Dublin Port Company, however, recognises this is no fait accompli, but rather, is working with residents and others to get the best solution for everyone.

Dublin Port is operated, managed and controlled by the state-owned Dublin Port Company, which

The Dublin Port Masterplan is an adaptable and flexible initiative.

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www.cruisedublin.com

Cruise Dublin Partners:

Ireland’s Cruise CapitalCruise Dublin

Please visit our website: www.cruisedublin.com Email: cruisedublin@dublinport.ie

Contact 01 887 6000

Dublin... Not just a destination, now home to CELEBRITY ECLIPSE 2018

is overseeing the fulfilment of the Masterplan. Its success to date - whether around the unitised cargo, cruise liner and ferry spaces, or in respect of its comprehensive liquid bulk, dry bulk, oil bunkering and break bulk facilities – has been built upon astute planning, the public and private sectors working in concert and a strategy that sees all stakeholders involved at every stage, with a view to securing buy-in across the board.

The Dublin Port Masterplan is an adaptable and flexible initiative that has factored in the needs of the various stakeholders. Through ongoing and robust consultation, the Port has aimed to reassure and instil confidence in respect of its credentials, prospects and role in delivering benefits to both the immediate surrounding region and further afield.

The Port’s force for good qualities are further evidenced through its commitment to the World Ports Initiative, which shines a light on the pivotal role ports have to play in reducing greenhouse gas emissions, given that they are key interfaces along the global supply chain. The message Dublin has signed up to is that there is nothing inconsistent between being a thriving transportation and economic centre and at the same time, a standard bearer for sustainability.

The city of Dublin and its residents also stand to benefit from developments around the Masterplan, since it will connect them once again with their port, a fact not lost on Taoiseach, Leo Varadkar at

the recent opening of Dublin Port Centre, which he described as beginning the act of realigning the port with the city. As he put it, “While Dublin Port’s key focus is on its infrastructural development and the import and export needs of the Irish economy…this new project will enhance port-city integration to the benefit of city dwellers and visitors”.

Moreover, though cognisant of the unsettling nature of Brexit, Dublin Port Authority is cautiously optimistic that the opportunities will outweigh the challenges and that the Masterplan is ‘Brexit-proof’. As a port of increasing global renown and the gateway to Western Europe, it is sure to prove those who would argue otherwise, wrong.

There is also ever-increasing investor interest from France, Germany, China and Hong Kong, drawn by a supportive Irish government and a business-friendly tax landscape, while the pharmaceutical, banking and insurance industries have been particularly smitten with Ireland. Cumulatively, this has worked to ensure Ireland now leads from the front as Europe’s fastest growing economy. As it turns out, Irish companies have already been paying significantly more attention to forging trading links beyond the traditional UK market in those years since the global financial crisis. Their success on this front has helped to enhance Dublin’s global profile and spells good news for Dublin Port’s prospects post-Brexit.

(It is) a port of increasing global renown and the gateway to Western Europe.

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How is ongoing redevelopment at Dublin Port working to enhance cruise ship facilities?

The Alexandra Basin Redevelopment is the first of a number of projects included in the Dublin Port Company Masterplan. This €230 million development will provide new longer and deeper berths for shipping to allow larger, longer ships to routinely call at the port and turn within the expanded Alexandra Basin and berth further upriver. The new berths and their proximity to the heart of our capital city make Dublin a very attractive option for Cruise companies and their passengers. Furthermore, Dublin Port’s proximity to Dublin airport, providing for just a 15 minute

Dublin for Cruises

“Dublin is routinely featured in the top city desti-nations to visit.”

Pat Ward, Head of Corporate Services at Dublin Port Company talks of Dublin Port’s growing credentials as a cruise destination.

injecting an additional €2.8 million into the local economy. In addition to this, the Celebrity Eclipse mini season in Dublin is the dawn of a new era for cruise tourism in the capital. Reports are that the demand for these cruises is high and Celebrity Cruises are already selling cruises for 2019, whilst also preparing itineraries for 2020 onwards.

With Dublin being a true city port, steeped in history and culture and with its vibrant and cosmopolitan nature, it has always been a popular cruise destination. With the demand-driven nature of the industry, we expect that other cruise companies will follow suit and look to Dublin as a real and viable home porting option.

uninterrupted transfer time, means Dublin is well placed to become an attractive turnaround port.

How do you assess Dublin Port’s ongoing performance in meeting its objectives to attract more cruise ships to Dublin, offer an enhanced visitor experience to passengers and contribute to the economy of Dublin city and environs?

Dublin Port Company recognises the benefits of cruise tourism to the City with an estimated €15 million being spent by cruise passengers in the local attractions, retailers and restaurants. The decision by Celebrity Cruises to base the Celebrity Eclipse in Dublin for a mini season in 2018 means that passengers will spend some time in the city either side of their cruise, thereby increasing this value even further.

Dublin is routinely featured in the top city destinations to visit and with cruise ships berthing within striking distance of world famous attractions, such as the Guinness Store House, Trinity College and The Book of Kells, to name but a few, this is a big positive for cruise passengers. The “Cruise Dublin” initiative by Dublin Port Company also aims to enhance the passenger experience by providing them with a VIP card offering discounts with some of Dublin’s Retailers.

Are efforts chiefly focused on positioning Dublin to the cruise industry as a turnaround port, or as a port of call?

Traditionally, Dublin has been a marquee port of call and calls have been increasing year on

“We expect the number of cruise vessels calling to Dublin in 2018 to increase by 20% on 2017.”

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—Pat Ward Head of Corporate Services, Dublin Port Company.

year, with approximately 145 calls scheduled for 2018. And, while we have been a turnaround port for some of the smaller vessels in the region for some years, we believe that the aforementioned Celebrity Turnarounds will mark the start of significant growth in this area.

With Ireland remaining in the EU, do you anticipate Brexit will have a positive impact on cruise tourism in Ireland?

Brexit has led to uneasiness across the economy as a whole and until the terms of the agreement are finalised, a certain amount of uncertainty will remain. However, cruise tourism has proved to be particularly resilient to external economic factors in the past. While traditional cargo figures dropped significantly during the last recession, cruise calls to the port continued to rise. Industry reports suggest that the demographic of the cruise passengers is less susceptible to economic pressures. In fact, at the recent Seatrade Europe conference in Hamburg, cruise line executives confirmed that Brexit is having no bearing on bookings for 2018 and beyond.

What do you consider the most noteworthy upcoming developments on the cruise front for Dublin Port in 2018?

We expect the number of cruise vessels calling to Dublin in 2018 to increase by 20% on 2017,

—Picture left hand page, Sunset over the River Liffey, Dublin.

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s eatrade Europe 2017, the leading trade event for the European cruise and river cruise industry, saw a 15% increase in attendees to

over 5000 on 2015, reflecting that the growth of the European cruise market is showing no signs of slowing down.

“The holiday cruise market is booming like never before,” said Bernd Aufderheide, CEO and President, Hamburg Messe und Congress GmbH. “Passenger numbers are rising steadily and the demand situation for European shipyards and their suppliers is excellent. Full orderbooks, billions of euros in investments and 75 newbuilding projects to be delivered by 2025 alone.”

In testament to these excellent market conditions, a wide range of exhibitors showcased their products, services and innovations to a wide range of industry professionals, ensuring all the relevant sectors of the cruise industry were represented. “More than 260 exhibitors from 40 different nations have

strong inDustry, strong eventSeatrade Europe continues to hold its position as a must-attend event for the industry

The growth of the European cruise market is showing no signs of slowing down.

Delegates were invited to witness the first virtual keel laying ceremony by Carnival Corporation.

presented their products and services this year, including shipyards, cruise ports, food and beverage manufacturers, shipbrokers and many more,” said Aufderheide.

There was also a great deal of interest for the Newcomers’ Pavilion, showcasing 19 companies that are moving for the first time into the cruise and river cruise sectors, that used the event as a platform to make new contacts with the cruise lines.

A new feature for 2017, exhibiting ports and destinations were also given the opportunity to give a 90 second lighting pitch in front of a high calibre judging panel on the final day of the event, proving to be a popular addition to the programme of events.

In addition to the international exhibition floor, a full and engaging conference programme covered the most topical issues and trends currently facing the European cruise industry and

featured a number of high-profile personalities and heavyweights. Speaking during the opening ‘Future of Cruise Industry in Europe’ session, the optimism around cruising in Germany and the wider European market proved a strong talking point. Although China replaced Germany as the world’s second-largest source market for ocean cruise passengers last year, the host country of Seatrade Europe retains a dynamically developing market. Karl J. Pojer, CEO of Hapag-Lloyd Cruises and Chairman of CLIA Germany, said he expected further growth. “I do not see why the positive development should not continue”, predicting the three million passenger benchmark could be reached already by 2020 (compared to 2m passengers in 2016).

“As both a cruise destination and passenger source market, Europe continues to show its strength. Throughout 2016, the region held an 11% share of all deployed capacity and saw over 6.6 million Europeans take a cruise themselves,” said Andrew Williams, Group Brand Director, Aviation & Maritime Group, UBM EMEA.

Sustainability and environmental responsibility was kept at the forefront throughout the event, as delegates were invited to witness the first virtual keel laying ceremony by Carnival Corporation for AIDAnova, the world’s first fully LNG cruise ship. To much applause, Arnold Donald, President and CEO, Carnival Corporation and key brand leaders, celebrated this landmark occasion.

River cruising also came under the spotlight throughout the conference programme, with two dedicated sessions providing a focus on both identifying innovation and analysing the current security situation.

Another highlight of the event was the presentation of the Seatrade Cruise Awards. Karl J. Pojer, CEO,

Hapag-Lloyd Cruises, was honoured as “Seatrade European Personality of the Year”. Other prize winners included:

• Port of the Year 2017 – BVI Ports Authority, collected by Alfred Henley, Managing Director.

• Destination of the Year 2017 – Le Havre Tourism Board, collected by Valerie Conan, Director Cruise Department.

• Supplier of the Year 2017 – Coltraco Ultrasonics, collected by Clare Hunter, Head of Marketing & Communications.

• Marketing Initiative of the Year, sponsored by Cruise Baltic – Holland America Line and O, The Oprah Magazine Partnership, collected by Roger Frizzell, SVP and CCO, Carnival Corporation.

• Environmental Initiative Award – PresentWater AS, collected by Geir Erik Samnoy, Managing Director.

• Innovative Shorex of the Year 2017 – Abercrombie & Kent (Akorn) – The Koala Clancy Foundation Tour & Book, collected by David Vass, SVP, Worldwide Cruise Business & Operations.

Seatrade Europe has also continued its close cooperation with the Hamburg Cruise Days, starting today, that underscores Hamburg’s international significance in the world of cruising.

The next Seatrade Europe will be held at the Hamburg Fair site from 11 to 13 September 2019. The Hamburg Cruise Days 2019 will be from 13 – 15 September 2019.

Invest2018

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t he tax arena in 2018 is all about data and specifically, tax data management. The holy grail is the unification, validation and

enrichment of all the financial data, which can be applied across the corporate tax lifecycle at a single source. Not only should this allow archived data to be accessed at any stage, but should also lead to improved accuracy, streamlined data and enhanced accuracy.

With this in mind, corporate interests would be wise to seek out Vertex, which has been central in moulding the tax landscape we know today and which has built a reputation as a global pioneer in getting the tax function working as a strategic driver of business value. In this regard, Vertex Enterprise constitutes a major breakthrough, allowing for pinpoint accurate data management that affords insight into financial and reputational risks, particularly important in this BEPS era of tax transparency and compliance.

It constitutes a corporate tax technology solution that delivers enhanced speed, control and which, most importantly, affords insight, centralising data, as it does from multiple sources into a single platform that can be leveraged across all tax processes and types, in so doing, revolutionising management of the end-to-end tax life cycle. It is a particularly pertinent solution for organisations with multiple entities and financial systems, since it allows for invaluable modelling and planning.

Moreover, its application to ETR scenario planning, cash tax forecasting, provision close and

tax in Profile: vertex enterPrise

Vertex has been cen-tral in moulding the tax landscape we know today.

Vertex Enterprise allows for pinpoint accurate data manage-ment.

true ups, transfer pricing, compliance, indirect tax trend analysis, VAT and income tax ensures data is audit-ready. In addition, Enterprise is scalable i.e. it can be implemented piecemeal, or become the driving force behind a full-scale transformation of the tax function.

The key to its centralisation and aggregation of all the diverse data sources that exist in an organisation is the Vertex Tax Performance Engine, which puts to work advanced data connectors.

The benefits of Vertex Enterprise to any organisation are manifold and include the ability to extract raw financial and transaction data for tax purposes, as well as allowing for advance validation and reconciliation of such data.

In addition, it allows for the capturing of data from the general ledger by entity and subledger,

to include the underlying details transactions, as well as for the automation of complex, repeatable processes such as book/tax differences for all jurisdictions, state apportionment factors and earnings and profit calculations.

Furthermore, it affords the opportunity to group legal entities by tax jurisdiction, as well as to support a clear trail back to financial system data. On top of this, key systems can be streamlined across the tax lifecycle while eliminating redundancies. Meanwhile, data can be exposed for review and enrichment by subject matter experts at appropriate times and in controlled environments.

Through Vertex Enterprise, the company is accountably driving fundamental change across the tax arena, so leading to its deserved pre-eminence across its target markets.

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Invest 2018: With the tax landscape marked by ever-changing and ever-more exacting regulatory demands, why do businesses need tax data management solutions that are not only fit for purpose now, but sufficiently flexible and adaptable to have application down the road too?

Vertex: The OECD and many government tax authorities are calling for new processes, enhanced compliance and levels of transparency and information reporting. However, most corporations and governments are not quite ready to respond to the overwhelming volume of ever-changing and increasingly complex rules, regulations and reporting obligations. In fact, based on existing data and new data transformation, requirements and solutions, corporations and governments alike are currently struggling with these demands and will continue to do so. This state of affairs is compounded by the fact that tax data management and technology is lacking on both sides to cope with the explosion of digital transactions marking the global business landscape. It all amounts to a challenging

vertex: tax Data management exPerts

“Corpo-rations will assess scaleable technology to be the right way forward.”

environment, yet one destined to shape new compliance demands today and in the future, thereby creating the need for advanced tax data management applications.

Corporations will assess scaleable technology to be the right way forward for a growing business. This is because technology that can easily and efficiently adapt to operational changes in business structure, developing tax rules and various compliance needs across different jurisdictions in which they operate, has the potential to transform a business.

This era of systemic hyper-regulation demands new technology and procedural changes to achieve economic and technical efficiency across the entire life-cycle of tax planning, provision, compliance and audit management. Beyond the early adopters, have you found this truth is being accepted and acted upon?

The tax function has traditionally been slow and at times even resistant, to embrace new processes and technological advances. This lag is, in part, due to tax professionals and departments having a

“The C-suite is demanding that tax must be a strategic business partner.”

difficult time justifying technology and resources to achieve ROI. Part of the ROI justification challenge for tax departments is that it is difficult for tax professionals to ‘guarantee’ specific rate reductions or cash tax savings – that is, until the precise planning they want to execute with new technology or freed up resources, can be acted upon. Although there is always a list of planning opportunities to look at, the ‘devil is often in the detail’. Until the numbers are calculated and the ‘what-if’ scenarios evaluated, the ROI case remains general.

For instance, in terms of improved risk management, governance and control over the tax processes, the attitude has always been, “if it isn’t broke, don’t fix it,” so that it is difficult to make a case for upgraded technology and resources. Consequently, it is hard to ensure that tax has the transparency into the big picture.

It takes time to recognize the benefits that the change to any technology can eventually bring to a company, with some tax departments not realizing the full potential, so that they struggle to explain it to IT and finance. Moreover, with silo mentalities

sometimes prevailing across the respective finance, tax and IT functions, the holistic understanding required to make a broader business case for the technology is often not there. Indeed, with stakeholders erring on the side of caution in respect of risk, if they believe it to be currently managed, they are reluctant to do anything that could potentially increase it.

What would you describe as the provenance of and motivation behind Vertex’s visionary tax data management approach?

The financial systems of companies have been traditionally disconnected from the needs of the tax department for reporting and compliance. This statement was further corroborated by a recent BNA survey of large global MNCs, which indicated their number one internal challenge to be how disparate the financial accounting systems are from the needs of tax.

The fact is that financial systems are set up to operationally run the business and this will not change. The good news, however, is that adopting tax data management technology

Invest2018

Unique in the tax technology industry, Vertex's Chief Tax Office (CTO) provides insight regarding the impact of tax regulations, policy, enforcement and emerging technology trends on global tax department operations. The Vertex CTO group consists of former tax executives from various Fortune 500 multinationals, who bring their in-house tax and industry expertise to Vertex's solution development, services and client interactions.

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“The cost of data storage is becoming less expensive.”

can help to mine, organize, segregate, and apply the relevant data from many systems to allow for a more unified and integrated enterprise tax reporting and compliance function.

While the financial accounting systems of a company contain its books and records, this raw financial data is not in a clear applicable format that can be used by tax, rather being generally organized by business unit for operations. Thus, some of the transformation that tax teams need to undertake to be able to effectively use and apply the specific data, includes joining it to a common chart of accounts, accounting standard, and currency- translation standard on a legal entity level, as opposed to operating on a business unit basis.

One objective is to align finance and tax through a uniformed tax data management platform that can bridge the data between the two functions, in order to provide a more efficient financial reporting and close process. In addition, increased governance and control over the close process ensures financial and tax controls (SOX controls) are being met and are not at risk.

How does tax data management technology allow for more sophisticated tax planning strategies, as well as enabling tax to be a strategic business partner?

Technology can provide the data that tax needs to manage risk, plan and properly calculate tax to benefit the business, instead of being seen as a back-office compliance function. The C-suite is demanding that tax must be a strategic business partner more so today than ever before. With limited resources, this generally means that tax must look to leverage data management solutions to help them more efficiently collect and transform the data they need to meet all regulatory compliance filings. If this is more efficient, resources can then focus on more value-added projects to increase the brand and reputation of the tax team as a strategic business partner.

What would you describe as the best features and benefits of data management solutions and to what extent has tax technology become more affordable and reliable?

Advanced tax technology should feature open architecture and a flexible user interface, supporting currencies and accounting standards for all tax jurisdictions in which a corporation operates. It should be able to unify all tax data into a single platform that can be integrated into a businesses’ existing environment for it to manage all tax activities, including planning and strategic planning globally.

Advanced technology should enable sophisticated reporting and modelling through custom reporting, query, and analytics capabilities. Tax can then more proactively evaluate the ETR impact of various tax planning strategies and ensure that business decisions are evaluated on an after-tax basis. If data is accessible for compliance and provision scenarios, that data can be leveraged to assist in ‘what-if’ scenarios and tweaked to better plan for the future. One key development is that cloud and open API systems and the cost of data storage is becoming less expensive, which spells good news for tax. The point here is that not everything has to be changed at once, with current systems still usable through the integration of pieces of new technology.

Do you see any risks associated with introducing greater automation to the tax data management lifecycle?

Technology automation creates new processes for finance, tax and IT. As with any change, new processes can create risk, necessitating new or updated key controls, as well as testing of these controls. The results need to be tested and validated, so that key stakeholders are confident the technology has been implemented correctly. This takes time and may mean

Invest2018

repetitive testing month to month or quarter to quarter, until all stakeholders have signed off. One recommendation would be to have a tax technologist on the team lead this tax data management transformation.

As government tax administrations familiarize themselves with tax data management technology, they may begin to develop more targeted audit information requests, as well as enhanced expectations as more businesses adopt this technology. Tax departments ideally want to stay one step ahead of these increased demands.

Nancy Manzano, CPA, MS Tax, Director in the Chief Tax Office at Vertex Inc.

Bernadette Pinamont, CPA, JD, Chief Tax Officer - Income Tax at Vertex Inc. George L. Salis, Principal Senior - Tax Compliance at Vertex Inc. He is also a Certified Business Economist (CBE) and tax lawyer specialising in International and European Taxation, Transfer Pricing, and Economic Law.

“Technology automation creates new processes for finance, tax and IT.”

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With the latest slew of financial scandals revealed in the Paradise Papers, people may think it

is business as usual for tax avoiders and evaders. Not so, said OECD Secretary-General Angel Gurría, who told the press that these tax practices are “a legacy that is fast being dismantled.”

“It all started 10 years ago in February 2008 with the Lichtenstein leaks,” says OECD’s tax chief Pascal Saint-Amans. “Because of that and the financial crisis we were able to draw political attention to our work on transparency and cracking down on tax avoidance addressed through the Base Erosion and Profit Shifting Project (BEPS).”

The first thing the OECD did, in 2009, was focus on transparency, Mr Saint-Amans says. The outcome of that was to marshal the countries and jurisdictions who are members of the Global Forum on Transparency and Exchange of Information for Tax Purposes (which has 147 members) into consenting to Exchange of Information on Request. This meant that the tax authorities in Mexico, for example, could request

The first thing the OECD did…was focus on transpar-ency.

We may be finally saying goodbye to lost taxes.

ParaDise lost: the imminent fall of tax havens BEPS multilateral instrument will close loopholes in thousands of tax treaties worldwide.

information on your bank account in Switzerland and obtain it. “But,” says Mr Saint-Amans, “they had to find you first.” Tax authorities had to know where a person was operating to know which country to request information from.

Now this system is being complemented by a mechanism that allows for automatic exchange of information (AEoI). As many as 102 countries and jurisdictions have publicly committed to implementing automatic exchange of information, with 49 having started exchanges in September 2017 and a further 53 taking up exchanges in September 2018. From now on, if you have a bank account in another country, this financial information will be reported automatically and annually to your country of residence. You may be able to place your money where you like, but will no longer be able to “hide” it, and certainly not in tax havens. Even before automatic exchanges were activated, the mere threat of them has recovered significant tax revenue: more than 500,000 taxpayers have disclosed offshore assets over the past eight years with close to €85 billion identified as a result of voluntary compliance mechanisms and offshore investigations.

While the automatic exchange of information tackles the problem of secret bank accounts belonging to individuals, the cross-border shifting of taxable profits by multinational corporations to lower or eliminate taxation requires other solutions. This is where the BEPS project comes in, comprising 15 measures to tackle tax avoidance.

The Inclusive Framework on BEPS (which groups 106 members) is in charge of implementing the BEPS measures, articulated around four minimum standards that are closely monitored, witth jurisdictions assessing each other’s implementation through a peer review process. The four key elements of the BEPS Project address harmful tax practices, treaty abuse, country-by-country reporting and dispute resolution mechanisms, two of which form part of the “BEPS multilateral instrument”. Also known as the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS, it was signed in June 2017 and now covers 71 countries. Mr Saint-Amans notes that it will modify most of the existing 3,500 bilateral treaties once it is ratified domestically, a process that is now under way. This will close loopholes in thousands of tax

treaties worldwide, thus reinforcing them against abuse while providing better certainty for both tax administrators and taxpayers.

Revenue losses from BEPS are conservatively estimated at $US100-240 billion annually, or the equivalent of 4-10% of global corporate income tax revenues. As state pension reserves, tax credits for education and other such public services are being jeopardised by the prospect of tax shortfalls in almost every country in the world, recouping some of this money will bring relief, and more importantly, fairness to taxpayers and citizens.

These leaks have once again shone a light on the role that intermediaries, such as certain corporate and trust service providers, play in promoting aggressive tax schemes. Countries must continue to co-operate on tax issues in order to close loopholes and tackle abusive tax situations. With the OECD’s work on BEPS and exchange of information we may be finally saying goodbye to lost taxes. And for tax dodgers, lost paradises, too.

OECD (2017), Paradise lost: The imminent fall of tax havens, ©OECD Observer No 311 Q3 (November) 2017

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s a business destination, Malta would appear to have it all: A wonderful climate, courtesy of its location in the

heart of the Mediterranean, excellent and ever-growing air connections to all key European markets, membership of the EU and signatory to the Schengen Agreement, use of the euro, English as one of its official languages, revitalised infrastructure, that takes in both Malta’s airport and the Valletta Waterfront project, as well as an array of world class venues catering to events of all shapes and sizes. Moreover, its compact quality affords short transfer times and premium accessibility to all facilities: venues, entertainment, restaurants and accommodation. In addition, Valletta’s 2018 status as the European Capital

Global business DestinationsMillions of delegates annually attend meetings, congresses, exhibitions, business events, incentive travel and corporate hospitality across the globe. Providing just the right blend of facilities and services to these business tourists is akin to alchemy. Here are the five top global business destinations for 2018.

As a business destination, Malta would appear to have it all.

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of Culture has acted to catalyse a range of regeneration projects, so further distinguishing Malta, while its recent pedigree in having hosted both the Commonwealth Heads of Government Meeting and the EU summit is compelling evidence of its capacity to successfully host events with the most exacting demands.

The Valletta 2018 Capital of Culture status precipitated the development of a number of capital projects designed to regenerate and conserve parts of the city in advance of the year in question. The result has seen Valletta reinvigorated while the programme of events to come is sure to leave a cultural and artistic legacy for visitors for many years to come.

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Malta business tourists benefit from a focus on quality over quantity.

Conventions Malta, headed up by Peter Cauchi, is the official destination marketing department for M.I.C.E. travel within the Malta Tourism Authority (MTA). In promoting the Maltese Islands of Malta, Gozo and Comino as a destination for Conference & Incentive travel and Association business travel, it has come up with the inspirational ‘Access All Areas’ (AAA) initiative, which positions Malta’s compact nature to its advantage. In showcasing the fact that virtually everything is within a 25 minute range, it adds another element to Malta’s impressive list of credentials.

Offering impartial information and assistance free of charge to event organisers looking or planning to host their next event in and around the islands, Conventions Malta acts as a one-stop-shop for interested parties. In doing so, the organisation capitalises on its close links with Destination Management Companies, conference hotels and convention centres to ensure a customised service for clients and delegates, such that they will associate Malta with all that’s best in a MICE destination.

On the accommodation front, Malta business tourists benefit from a focus on quality over quantity that sees some 15 five-star and 40 four-star hotels made up of both international chains and boutique properties. Many of these have in-house conference facilities and dedicated M.I.C.E teams, to add to those dedicated conference venues offering state of the art technology and able to accommodate up to 5,000 delegates at a time.

Malta is also able to bring to bear its landscape and heritage to provide a stunning backdrop for any event. As Conventions Malta describes it, this opens up opportunities for ‘an al freso dinner in a village square, or drinks on a floating barge in the Grand Harbour, a seaside lunch in the shadow of Gozo’s Azure Window, or a black-tie reception in a Baroque Palazzo.’

With an approach marked by innovation, creativity, versatility and commitment to sustainability, Malta fuses this unparalleled accessibility with stand-out cost competitiveness, a Mediterranean setting, medieval architecture and the warmth of its people, to create a mix like no other.

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Nuremberg CoNveNtioN CeNtre (NCC)Nuremberg Convention Centre has the capacity to host every type of event from large congresses to product presentations, staff events and customer galas. It can lay claim to three congress centres, 15 exhibition halls, 50 meeting rooms, while it is also in close proximity to both Nuremberg’s main rail station and airport. In addition, Zaha Hadid-designed exhibition halls 3A, opened in 2014 and 3C, scheduled to open this year, offer significant acoustic, thermal and energy benefits. Annually, the NCC can point to a staggering 30,000 exhibitors and 1.4 million visitors across 120 trade fairs, exhibitions and conferences.

As to the new Hall 3C, it will add some 9,600 m² of gross exhibition area when it opens, as part of a spectacular €70m upgrade to facilities that will see the city remain an internationally significant trade fair venue. It also ensures Nuremberg Convention Centre can continue to offer premium facilities capable of accommodating very large events, when subsequent upgrades are made to other facilities in the NCC family.

NürnbergConvention, the organisation tasked with promoting the city as an events destination, stands ready to assist interested parties with everything from providing advice, sourcing locations, hotel reservations, conference package deals, supporting programmes, city tours, tour guides, site inspections and service partners.

It seeks to understand event organisers’ needs and goals and in this it can draw from a comprehensive global infrastructure, encompassing subsidiaries in Brazil, China, Italy, North America, India and Austria, as well as some 50 international representatives, perfectly placed to communicate customised exhibition concepts and new ideas to interested parties.

While these echo to a degree, the corporate preoccupations of the countries in question, they also reflect the sectoral themes of the Nuremberg fairs, such as automotive, coatings, die casting, IT security and pharmaceuticals, to name but a few.

NürnbergConvention stands ready to assist.

—Nuremberg Convention Centre

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evidenced through the fact of it hosting numerous market research and call centres, its pedigree around toy making and status as a location pioneering advances in energy supply, not to mention its eminence in respect of high-tech power electronics and automation components.

The prevailing culture of innovation is perhaps most clearly manifested in Nuremberg’s medical technology cluster, in the form of Medical Valley, which is world-renowned. It features the likes of Siemens Healthcare and Novartis Pharma, amongst 250 other pharmaceutical manufacturers, medical research and training institutions, hospitals and providers of medical and health services.

As a backdrop to any event, Nuremberg is hard to beat. Renowned not only for its culinary and brewery traditions, it can also lay claim to the Imperial Castle and an old town straight out of the movies.

W ith the much anticipated opening of Hall 3C at the Nuremberg Convention Centre in 2018, for MICE buyers

and event organisers, this famous and beautiful German city in the State of Bavaria can rightfully now be considered as one of the world’s premium business destinations.

It is supremely well-placed for the European market, given its strategic location in southern Germany, its proximity to Frankfurt, Stuttgart and Munich and its own highly regarded and conveniently situated airport, which puts it just a short haul flight away from all corners of the continent. Moreover, it can point to striking medieval architecture, as well as excellent accommodation, leisure facilities and quality of life. In addition, its compact status, where cherished tradition blends seamlessly with all that is cutting edge, places everything within easy reach.

Nuremberg is a city of commerce, academia and research, with world renowned multinationals, such as Siemens and Continental in residence, excellent infrastructure and a hi-tech pedigree around the likes of applied science, the automotive sector, ICT, energy, power electronics and medical technology.

Cumulatively, Nuremberg is marked by its innovativeness, creativity and commitment to sustainability. Its versatility across its metropolitan sphere of influence is further

As a backdrop to any event, Nuremberg is hard to beat.

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—NurembergState of Bavaria, Germany.

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W ith world class venues, a benevolent climate, English-speaking status and a cost-competitiveness that is hard

to beat, Cape Town has much to recommend it. So much so, it has become widely recognised as Africa’s top business tourism destination, ahead of other contenders for this accolade, such as Marrakech in Morocco, Nairobi in Kenya, as well as Cape Town’s fellow South African city, Johannesburg.

The addition of a second dimension to the Cape Town International Convention Centre, in the form of CTICC 2, has acted to catapult this majestic South African metropolis up the league table of global business destinations.

The flagship development at the multi-purpose international conference and exhibition centre speaks to a gravitas, confidence and ambition befitting a city of international renown. With the instantly recognisable Table Mountain as its backdrop, Cape Town enjoys a natural advantage, to which it has forged an enviable reputation in respect of its entertainment, accommodation and dining offers.

CTICC’s Ambassador Programme is an innovative initiative that looks to leverage the human capital and resources embodied in the form of recognised experts and key opinion leaders from Cape Town’s

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Cape Town has become widely recognised as Africa’s top business tourism destination.

academic, medical and scientific communities, to champion the destination in target markets across the world. This ties in with Cape Town’s pedigree in attracting international association meetings from across these sectors.

The drive to attract more business tourism to Cape Town is assisted by the Cape Town Air Access initiative, a partnership between the Western Cape Government, the City of Cape Town, Airports Company of South Africa and Cape Town Tourism, which has markedly improved accessibility. In a nutshell, it has worked to secure new routes and route extensions, with the additional capacity translating into spend on the ground.

CTICC’s Nurture Our World (NOW) initiative, meanwhile, speaks to a commitment to sustainability that transcends the drive for profit at all costs and evidences a capacity to drive positive and life-changing socio-economic benefits across Cape Town and surrounds. In practice, it sees an integrated sustainability strategy that encompasses products, operations, procurement, employee training and engagement, job creation and social responsibility. Moreover, CTICC is the first of its kind anywhere in the world to align its reporting to the sustainability criteria of the Global Reporting Initiative (GRI).

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v ancouver consistently tops the list as the world’s most liveable city, thanks to a stunning natural setting and a focus

at governance level on ensuring sustainability considerations inform planning and development at every turn

The jewel in Vancouver’s business crown must surely be the Vancouver Convention Center (VCC), the first double LEED (Leadership in Energy and Environmental Design) Platinum certified convention center in the world. With some 466,500 sq. ft, of space in the heart of Vancouver’s bustling downtown waterfront, it can and does accommodate the largest international galas, trade shows and conferences, with its fans citing the likes of its state of the art technology, the quality of the conference hotels nearby and the walkability near the venue as just some of its key attributes. In practical terms, it offers two connected buildings, cumulatively offering flexible meeting, exhibition, ballroom and plenary space

Meanwhile, Vancouver can also point to Grouse Mountain Resort, which offers jaw-dropping views of ocean, mountains and city skyline, as well as the legendary Fairmont Hotel, recently the beneficiary of a $12 million upgrade and the brand new JW Marriott Parq. In addition, BC Place Stadium constitutes a multi-purpose sports, exhibition

vanCouverThe jewel in Vancouver’s business crown is the Vancouver Convention Center (VCC).

and entertainment facility and can lay claim to the world’s largest retractable roof, while Rogers Arena and the historically significant Vancouver Rowing Club are just two more pertinent sporting backdrops for an event.

Furthermore, the University of British Columbia and the Simon Fraser University offer an array of inspiring meeting and event space options, while Waterview, on the downtown peninsula, is a more recent addition to Vancouver’s portfolio, providing – as the name suggests - spectacular vistas.

The MICE market singles Vancouver out as the North American venue of choice for its business meeting credentials, safe environment, uniqueness, leisure and upscale food options. Moreover, its popularity shows no signs of abating soon, with bookings at record levels.

Much of the responsibility for this success can be placed at the door of Vancouver’s tourism and hospitality fraternity, which has worked tirelessly to promote the merits of the city and surrounding region. In this endeavour, they are helped by the proximity of Vancouver International Airport, which boasts excellent global links and which is held in the highest esteem by convention planners, who perceive it as their preferred North American airport.

—Vancouver

Science World.

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s ydney’s meetings landscape has recently been transformed through the introduction of the 50-acre Sydney International

Convention, Exhibition and Entertainment Precinct (SICEEP) on Darling Harbour, centred around the International Convention Centre Sydney (ICC Sydney), which now allows it to compete at the highest levels of the global events market.

Safe, stable, accessible, with world-class infrastructure and accommodation options, an established and highly efficient event services industry and a reputation for innovation and creativity, it is small wonder Australia’s harbour city has become one of the go-to meetings and events destinations in the Asia-Pacific region.

The city at large is a food-lover’s dream, while both the arts and sports scenes channel all the natural flair and dynamism that comes of Australia.

With a recent focus having been on attracting short lead Asian incentive business to the city, while the new integrated centre was being developed, this had the result of cementing the reputation of Sydney’s business events community in the hearts and minds of that market for its can-do, proactive approach.

syDneySydney is firing on all cylinders in respect of its meetings and events offering.

This happy outcome sees bookings strong right through to the middle of the next decade, while now that Sydney is firing on all cylinders in respect of its meetings and events offering, there has also been a surge of interest from markets a bit further afield, such as India, eager to take advantage of all it has to offer and to see the world-famous sights such as the World Heritage-listed Sydney Opera House, as well as the Sydney Harbour Bridge.

Part of the secret of Sydney’s success lies in the fact of collaboration across the public and private sectors in pursuit of a common objective. This has seen State Government, academic institutions, trade associations, business and tourism, hospitality and retail industries aligning with Business Events Sydney to coordinate efforts, including a new dedicated focus on securing more health care events.

The proof is there for all to see, with the likes of Sibos 2018, the World Congress of Accountants 2018 and LAUNCH start-up festival 2018 just three huge international events evidencing the faith placed in the city.

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Invest 2018: How did the Access All Areas initiative come about?

Peter Cauchi: Conventions Malta was established in 2015, with ‘Access All Areas’ (AAA) the brainchild of its creative team. We are a small island here in Malta and with the help of all the ministries and institutions, we are looking to open up, while retaining the exclusivity we are famous for. We’re talking top VIP groups, presidents, ambassadors and important MICE business groups. The watchword is ‘special’ rather than ‘unique’, because every country is unique.

What is special is not just the warm welcome, but also the abundance of historic buildings - thanks here to the Knights of St. John who did all the work for us! These, as well as more modern settings can be used for conferences and even though Malta is a small island, we have a good selection of large venues which can take from 300 to 5000 people for dinner.

Malta’s compact size lends itself perfectly to the standard three day conference duration. What we have is shorter distances to everywhere. So, the journey from the airport to St Julian’s, where the major five star hotels are, takes only 25 minutes.

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“Even though Malta is a small island, we have a good selection of large venues.”

Most other points of interest on the Island are also within a 25 minute range, with the exception of Gozo and Comino. Many modes of transport can be utilised, including vintage buses, speedboats or sailing boats.

What steps have been taken to ensure DMCs, venues and service providers reflect the premium quality expectations surrounding the AAA initiative?

To secure quality assured status, during the licensing process, DMCs must meet a list of criteria from the MTA office concerning the likes of money back guarantees etc. This quality assurance seal and backing from the MTA is considered a big plus and is something we point to when engaging with organisers that are selecting a DMC.

Do you believe Malta is ready and suitably prepared for the increase in business that will come from Valletta’s status as the European Capital of Culture 2018?

I would say, yes, we are prepared and the tour operators will hopefully sell out accordingly. We did our homework and ‘have our ducks in a row!’ The size of the island doesn’t permit millions of

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Peter Cauchi is Head of Conventions Malta, an arm of the Malta Tourism Authority (MTA) tasked with promoting foreign conventions and congresses. He has embraced and is spearheading Malta’s Access All Areas initiative, designed to leverage the fact of Malta’s compact quality, which brings into play a whole nation’s assets. He took some time out from his busy schedule to talk to Invest 2018 about it.

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Peter Cauchi Head of Conventions Malta.

around us, such as Tunisia, Egypt, Libya and Turkey. The MTA encourages hoteliers and other businesses to think long term and it is true that Malta is still a great value for money destination. What are the current stand-out flagship developments around infrastructure and accommodation in Malta?

Our government came up with an initiative which granted permits to hotels to increase their bed stocks. In this way, the Intercontinental focused on increasing its provision of top-end VIP suites, so creating a hotel within a hotel. There are also plans for a Hard Rock hotel, as well as other exciting developments in connection with the Corinthia and

Radisson hotels, not to mention approvals having been given for some other establishments to be rebuilt at higher quality.

Hotel owners are once again investing in refurbishment, so increasing rooms and upgrading services to the benefit of both MICE and leisure clients.

people coming over, but with a substantial amount of Airbnbs to add to the hotel accommodation stock, we should be able to cater to all requests.

One of the latest trends in Malta is boutique hotels, especially in Valletta, where some old palaces that were literally falling apart have been converted into state-of-the-art hotels offering 12 or 15 rooms each. These establishments are very classy and very stylish.

In addition, after a few years of limited nightlife entertainment in Valletta, the capital city has become again one of the most vibrant areas in Malta, as it should be. The remarkable transformation has brought a host of outside entertainment centred around the various bars and restaurants.

Was the transformation of Valletta inspired and catalysed by events, such as the Commonwealth Heads of Government Meeting and the EU Summit?

This was certainly part of it, but it was also due to the suppliers and the trade turning it round in response to visitor feedback that there was nothing to do in the evening in Valletta.

Is Malta in danger of becoming a victim of its own success? For example, are costs starting to creep up?

At the moment, we are very popular and the demand for hotel accommodation is very high. This is in part due to the political situation in other countries

“Everything is within a 25 minute range.”

—Malta’s national carrier is expand-ing.

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What developments have there been in respect of connectivity and access?

There are a lot of low-cost airlines connecting Malta to various European countries, while our national airline is also expanding, having re-inserted, for example, its regular routes from Frankfurt and Manchester. Growth is also apparent on routes operated by Lufthansa, BA, SAS, Alitalia and others.

The airport has just been refurbished and now offers additional capacity, but I think perhaps we have to grow building-wise both at the airport and the cruise port. Additional pier capacity would allow more cruise liners to be accommodated, which is important, as we are exceeding our expectations on a yearly basis.

For example, we recently had a German investment company which came in on three ships – they had a great evening in Valletta with their clients, which included dinner, a show and entertainment. It was really something quite spectacular.

Also, decision-makers might go for a cruise for their holidays and come into our port, which I believe is one of the nicest in Europe. They fall in love with Malta and decide maybe to have their next conference on the island.

After Brexit, Malta, along with Ireland, will be the only EU members able to point to English – the world’s foremost commercial tongue - as an official language. How important is this - along with Malta’s use of the Euro and the free mobility afforded by the Schengen agreement - to the country’s prospects in the conventions market?

I think that’s a big asset, not only for working with the European countries, but also the non-European ones. English is widely-spoken in the MICE trade and so there is comfort in communicating in this way here in Malta. Having the euro is also a big plus, because it’s a constant currency. We are seeing at the moment an especially good increase in the North American market on the MICE side, with one DMC able to point to three groups coming next year from Canada, numbering some 350 people each. We even have one or two groups a year from Australia!

What do you do to understand the requirements and objectives of your target markets?

“At the moment, we are very popular.”

—Vittoriosa Grand Harbour Marina, Malta.

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environment ministers to make everything happen for larger groups, or the foreign ministry to be involved if we have challenges with visas.

In addition, there are regular meetings between the DMC and the MHRA, which is the Malta Hotels and Restaurants Association, while when we have larger events the ministries and public sectors will get together around one table to see how we can create a safe infrastructure

for people. Similarly, when we encounter challenges, or when we have feedback about issues experienced, such as congestion in a particular area, all stakeholders will collect to strike on the right way forward. Meanwhile, for big conventions we will also sit down with the president to establish whether she would like to welcome the group in her president’s colours. So, we do connect very well with all of our different partners to ensure a coordinated thrust around aaa.

What we do is conventions. We attend the major fairs, such as IMEX Frankfurt, IBTM Barcelona, as well as IMEX America, where the request for Malta is becoming quite substantial. This is thanks to the efforts of our MTA office over there and our presentations showing off Malta, which blows them away!

Is Malta’s commitment to sustainability e.g. evidence of greener buildings, cleaner fuels and congestion zones something MICE clients ask about, or is it more of a peripheral consideration?

While it is not something we are generally asked about, our government is taking a very proactive lead on this front. For example, it is already pushing and incentivising the use of electric cars and the separation of garbage. In addition, school buses are to be free for children, meaning less traffic on the roads. By being that one step ahead, we have something to show organisers before they can ask us what we are doing on this front.

What other elements is Conventions Malta working with to ensure AAA is a success?

We work closely with all the ministries on AAA. For example, we need the transport and

“We work closely with all the ministries on AAA.”

—Just one of many potential dinner venues (Island of Gozo).

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r esponsible, well-regulated island IFCs play a central global role that goes beyond tax mitigation, offering fantastic opportunities

for both corporations and individuals alike. Under ever tighter scrutiny from various forces ranged against them, island IFCs have been quick to adapt to ensure compliance with new directives from various international bodies, and have made proactive efforts to combat tax evasion and illicit tax flows as part of a concerted effort to have legitimacy bestowed upon them.

International financial services is a misunderstood and much maligned sector, which offers small island states the opportunity to diversify, innovate and grow into fiscally independent jurisdictions, unchecked by the usual restrictions associated with geography.

In this post-crash world, G7 economies show no signs of relenting as they seek to channel their combined fiscal authority into crafting a new era of tax transparency, designed to see

international finanCial serviCes

Interna-tional financial services is a misun-derstood and much maligned sector.

money flowing into their depleted coffers. The screw-turning comes in the form of various programmes and regulatory requirements centred around accelerating the automatic exchange of information to leave no place to hide for those that would seek to avoid paying their way.

The irony here is that many of the jurisdictions targeted have now become more transparent than those pointing the finger, as part of their exasperated quest to achieve regulatory, political and moral legitimacy.

Cook Islands

For those prioritising wealth preservation, and those with long-dated investment horizons, the Cook Islands can offer plenty in the way of evidence regarding its credentials. Its financial services landscape is renowned internationally by those in the know for its pioneering and much aped asset protection trust. Yet, this is merely

The Cook Islands has remained not merely compliant, but gone over and above the call of duty.

the headline to a story of outstanding product, service, expertise, pedigree, innovativeness and trustworthiness.

While there has been an undoubted thrust towards greater transparency in tax matters in recent years, the Cook Islands has remained not merely compliant, but gone over and above the call of duty, having signed the Multilateral Convention on Mutual Administrative Assistance on Tax Matters, enacted the Income Tax Amendment Act and passed the Income Tax Act. In addition, the Cook Islands International Trusts Act constitutes one of the jurisdiction’s most important pieces of legislation and is regularly updated, so further consolidating that trust’s status as the world’s premium wealth protection vehicle. Part of that which elevates it above the competition is its affording of protection from political and economic uncertainty, how and when beneficiaries receive assets, the avoidance of forced heirship provisions, as well as protection against foreign judgements and statute of limitations.

Meanwhile, macro socio-economic developments in China are accelerating the ongoing momentum towards full internationalisation of RMB, the One Belt One Road initiative gathers pace and there is exponential growth in the levels of private wealth held by Chinese citizens. It all means the Cook Islands, with its Pacific proximity, is perfectly placed to assist Chinese nationals prioritise wealth preservation and seek an international wealth management plan to reflect the increasingly global nature of their

personal and business holdings. For its part, the Cook Islands IFC space has adapted and evolved to accommodate the requirement for higher levels of service and advice that Chinese clients expect, compared to those from many other markets.

As a jurisdiction, the Cook Islands is aware that China is, essentially, a civil law jurisdiction and therefore more pre-disposed towards foundations, such that its trust offering is marked by its flexibility and ability to be used for a variety of planning purposes. These include succession, wealth protection, avoidance of probate, tax and pre-migration, illustrating that the trust can be the cornerstone of a wealth management plan.

In truth, the Cook Islands provides the fiscal maturity and regulatory environment China currently lacks for the legal protection and secure investment of the wealth its HNWIs now increasingly hold. In addition, it scores highly on the security and privacy front, which is of great importance, since in China itself, many of the financial institutions are, to all intents and purposes, extensions of the State apparatus.

The Cook Islands Government is committed to the international financial services sector as a key component of its economy, both now and going forward, which is a key reason why the jurisdiction should be on the radar of anyone concerned with wealth preservation. For here is a place that offers protection, flexibility and ease of administration, with plans customised to the client’s unique personal and family circumstances and needs.

—Cook Islands.

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The Cook Islands provides the fiscal maturity and regulatory environ-ment China currently lacks.

Antigua

Antigua and Barbuda in the Northeast Caribbean has prospered to become the fastest growing economy in the OECS and now one of the safest and most secure investment environments in the world.

Notwithstanding the material damage suffered at the hands of Hurricane Irma in 2017, Antigua’s solid fundamentals, willingness to collaborate with island neighbours in pursuit of common objectives and determination to highlight unjust judgements heaped upon small island developing states, such as itself, have meant it is well placed to weather any storms it is subject to.

It has also chosen its friends wisely, looking beyond its sometimes truculent near neighbour, the United States, to forge strong relations with China. This has afforded it financial grants and concessional loans to support improvements in infrastructure, health, education and community development. More recently, this has evolved

into more direct investment by wealthy Chinese interests in a variety of capital projects around tourism, construction and distribution activities.

Alongside tourism, international financial services is a keystone of the economy: It is, in fact, increasingly being sought out for its provision of highly personalised wealth management services for the most discerning clientele.

With regulatory and business operations having been upgraded to meet international standards, clients can avail themselves of a jurisdiction marked by both confidentiality and compliance.

Over its 35 year history, Global Bank of Commerce has helped in making Antigua a regional financial services force of note and has led the way in enhancing the integrity of the Caribbean banking sector.

This locally owned private bank provides multi-currency accounts, strong correspondent

Global Bank of Com-merce has become an interna-tionally significant operation.

banking services to facilitate world-wide transfers, secure internet banking, corporate and trust structures for estate planning, card services, and a multi-lingual workforce.

Through pioneering innovations, such as Sugapay, an alternative payment solution that enhances safety, convenience and efficiency and reduces cost, combined with the introduction of its Global Processing Centre, which manages electronic financial transactions, it continues to be a stable, reliable financial guardian and the ideal partner for those seeking more personal attention for their wealth management portfolios. In short, it is the first port of call and one-stop-shop for interested parties, having successfully balanced the need for confidentiality with the requirement to be compliant, a feat it has made look easy. This is thanks in large part to Brian Stuart-Young, who has overseen the growth of the bank since its inception in 1983 and is now considered to be one of the key figures in the international financial services fraternity.

Under his exemplary stewardship, Global Bank of Commerce has managed to transcend the limits of the region’s geography, to become an internationally significant operation, offering personal, commercial, and private banking and wealth management services.

The bank has stayed at the top for so long through embracing innovation and technology to deliver its future strategic and operational goals in the most efficient manner possible, while helping investors mitigate risk, optimise opportunity and align strategies to achieve their financial objectives.

Meanwhile, through its investment in technology-driven services and in training a pool of dedicated bankers, Global Bank of Commerce looks to demonstrate to its clients that it is better placed as a regulated institution to provide wealth management and payment services, than third-parties, to which such functions are so often outsourced these days.

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What distinguishes the Cook Islands from other jurisdictions in the international financial services arena?

The culmination of Cook Islands geography, history, political stability, and professionalism places the Cook Islands in a unique position of advantage. Similar to London, with a time zone halfway between Hong Kong and New York, the Cook Islands is an ideal bridge between Asia and the Americas. It is further blessed with beautiful natural endowments that not only makes it a pristine tourist destination, but also manifests substantial ocean resources of fish, pearls and a treasure trove of seabed minerals, estimated to contain 25% of the world’s supply of cobalt.

The history of the Cook Islands shows how innovative its people are, as it manoeuvred itself into an association with Britain in the face of French expansionism in the 1800s. Importing British common law into its legal framework, the Cook Islands later chose to be self-governing in free association with New Zealand on the 4th of August 1965. With over fifty years of peaceful governance, the Cook Islands has enjoyed diplomatic relations with over forty countries and continues to enjoy the

economic stability afforded by the use of the New Zealand dollar to value its own currency.

The Cook Islands passed legislation over thirty years ago creating a leading international finance centre that now boasts experienced professionals centred on service and client-focused solutions, while implementing industry related international standards. Although the international trust is the Cook Islands’ flagship financial product, other financial services are available, including the establishment of Limited Liability Companies, International Companies, Foundations, Captive Insurance, Partnerships, and banking services. Centered in the heart of the Pacific Ocean, which joins Asia and the Americas together, the Cook Islands and its service providers are an attractive bridge to enabling financial security.

What aspects of the Cook Islands International Trust have led it to being held in such high esteem as a wealth protection vehicle?

With the enactment of the Cook Islands International Trust Act 1984, the Cook Islands embarked on a journey as a pioneer of the modern asset protection trust. Within the context of the extreme litigiousness of U.S. society, the late attorney Barry Stuart Engel

Cook islanDsCEO of the Cook Islands Financial Services Development Authority (FSDA), Tamatoa Jonassen, talks to Invest 2018 of why the jurisdiction is a cut above the rest.

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Tamatoa Jonassen CEO of the Cook Islands Financial Services Development Authority (FSDA).

“The interna-tional trust is the Cook Islands’ flagship financial product.”

joined two Cook Islands attorneys in the 1980s to create asset protection legislation that has become a hallmark of wealth and estate planning. In fact, some U.S. legal scholars today raise the spectre of malpractice if a wealth advisor doesn’t at least consider offshore asset protection when advising wealthy clients in estate planning. Although initially criticised as being too progressive, many other countries began adopting asset protection legislation, including 16 states in the U.S., the most recent being West Virginia in 2016. Combined with decades of caselaw both in the Cook Islands and in the U.S., the asset protection features of the Cook Islands International Trust have proven effective. The Cook Islands International Trust Act 1984 allows for flexibility in structuring and managing wealth. The legislation includes strict time limitations in which claims must be brought against a Cook Islands trust and requires that claimants prove beyond a reasonable doubt that asset transfers to the trust were principally intended to defraud that particular claimant. Furthermore, claims against a Cook Islands

trust need to be commenced in the Cook Islands High Court. The certainty provided by Cook Islands legislation affords wealthy individuals and companies the comfort that their hard-earned wealth is and will remain protected for the purposes and beneficiaries determined at the establishment of the international trust.

How have recent legislative developments acted to reinforce the Cook Islands’ credentials on the compliance front?

Although international trusts registered in the Cook Islands enjoy substantial protection if properly established, any protection afforded under Cook Islands legislation is not intended to include assets that are proceeds of crime or related to terrorist financing. The Cook Islands implements international regulatory standards that demonstrate its commitment to combatting money laundering, tax evasion and the financing of terrorism. Recent legislative updates include augmenting the Proceeds of Crime Act 2003 and Mutual Assistance in Criminal Matters Act 2003, enacting

“The Cook Islands and its service providers are an attractive bridge to enabling financial security.”

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the Financial Transactions Reporting Act 2017 that replaced the 2004 legislation and implementing the Common Reporting Standard (“CRS”) to automatically and reciprocally exchange tax related information to combat tax evasion. The continued efforts by the Cook Islands demonstrates its right-touch approach to regulation and further contributes to its positive reputation for high standards, as evidenced by positive peer reviews by the Global Forum. This builds further on the 2009 evaluation done by the Asia Pacific Group on money laundering, which placed the Cook Islands in the top 20% of approximately 165 countries assessed for implementing international regulatory standards.

Is the Cook Islands Government’s commitment to the international financial services sector as a key component of its economy, as strong now as at any point since the FSDA’s inception? If so, how is this best evidenced?

The Financial Services Development Authority (“FSDA”) was established in 2009. Since

its inception, the Cook Islands Government has continued to support the growth of the financial services industry through legislation that expanded financial service products and implemented international regulatory standards. In 2012, the Cook Islands passed legislation allowing for the registration of Foundations. The following year, the Cook Islands passed the Captive Insurance Act 2013, which expanded insurance products available to international clients. In 2014, the Cook Islands government enhanced oversight of financial service providers when it enacted the new Trustee Companies Act. By the end of 2015, the Cook Islands had signed 21 Tax Information Exchange Agreements with other countries, demonstrating the importance the government places on its financial services sector. Several months later, the Cook Islands passed the Pacific Catastrophe Risk Insurance Facility Act 2016, revealing a vote of confidence from the World Bank and other international stakeholders in the Cook Islands’ experience, capabilities, professionalism and legal framework governing its financial service industry.

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—Cook Islands government buildings, Avarua.

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Perhaps the best evidence of the Cook Islands Government’s commitment to the industry, however, is its efforts over the past two years in implementing the Common Reporting Standard, with the first information exchanges set to take place in 2018. Despite the benefits of being a relatively small jurisdiction among CRS implementers, the Cook Islands Government has committed significant resources to implementing the same international standards that other countries are implementing.

How has the Cook Islands responded to the explosive growth in levels of private wealth held by Chinese citizens, as well as the increasingly global nature of their personal and business holdings?

The formation of the FSDA has been part of the Cook Islands response to the changing international landscape. Since its inception, the FSDA has promoted the Cook Islands in Asia at conference events and in relevant publications. With the explosion of high net worth individuals

in China, the need to understand how to best protect wealth becomes more pressing for such Asian-based individuals and so the Cook Islands’ experience with asset protection becomes very relevant. In November 2017, the Cook Islands exhibited at various conferences held in Asia, including hosting its own Cook Islands Financial Services Conference in Hong Kong.

Towards which areas will the FSDA principally be directing its energies over 2018?

The FSDA will continue to focus on the Asian and U.S. markets, while playing an important role in assisting with the implementation of CRS, especially with the Cook Islands’ first information exchanges to be conducted in 2018. With the Asia Pacific Group currently conducting an assessment on the Cook Islands, the results of that assessment are expected to come out in 2018.

—Rarotonga International Airport.

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Better known for its beaches than its financial services, Cook Islands was a pioneer in trust law.

It was the first jurisdiction to enact modern asset protection legislation through its International Trusts Act 1984.

While the Cook Islands has diversified into banking, captive insurance, foundations and a maritime registry, trusts remain the cornerstone of its financial services industry.

Tamatoa Jonassen, CEO of the Cook Islands Financial Services Development Authority (FSDA), said: “We are well known for our trusts which have been tested and tried in courts in the United States and in the Cook Islands, and they have been effective.”

At a recent conference hosted by the FSDA in Hong Kong, Mark Brown, Minister of Finance, Cook Islands, said the island nation had formal diplomatic relations with more than 50 countries.

It is also committed to the Common Reporting Standard and has 21 Tax Information Exchange Agreements.

“We see the importance of developing collaborative partnerships with other countries and international

Cook islanDs:your asia PaCifiC Partner

organisations,” he said.But it also understands its clients’ need for confidentiality, and it does not have public registers.

The Cook Islands has a strong rule of law, with a democratically elected parliament and an independent judiciary, mostly comprised of New Zealand judges.

Anyone wanting to register an offshore entity in Cook Islands must engage one of its eight trustee companies.

“They are licensed and regulated by our Financial Supervisory Commission and they are held to high international standards,” Jonassen said.

Antony Will, president of the Trustee Companies Association, told the conference that while the Cook Islands allows all of the same flexibility in estate and succession planning as most of the mainstream trust jurisdictions, it also has an added overlay of asset protection features that gives it an edge in the international market.

Will said one of the key features of Cook Islands’ trust law was that it does not enforce foreign judgements. Plaintiffs trying to have a transfer of assets to a Cook Islands trust voided must initiate legal proceedings there and they face a series of hurdles.

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Nicky Burridge

Cook Islands was a pioneer in trust law.

He explained the only action that could be brought was for fraudulent transfer, which must be proved to the criminal standard of beyond reasonable doubt. There are also strict time limits in which to lodge a challenge. “Even if a plaintiff gets through all of these steps, which has not yet happened, they still cannot make a claim against a trust until all remedies against other property have been exhausted,” he said.

At the same time, the law offers certainty around the ongoing role of the settlor, whether as a beneficiary or retaining some element of control in the trust structure.

Cook Islands is highly regarded for its regulation, which is conducted by the Financial Services Commission (FSC), an independent body that was established in 2003.

Cheryl McCarthy, deputy commissioner at the FSC, explained it was a member of a number of international bodies, including the Group of International Finance Centre Supervisors, to ensure its regulation meets international standards.

McCarthy said the regulator placed a lot of emphasis on knowing and understanding its licencees, with the licensing process typically taking about three months.

Brian Mason, chairman of the FSDA, said as well as upholding high regulatory standards, the Cook Islands also prides itself on its levels of service and prompt replies. “If there is one thing that frustrates people when they are dealing with offshore jurisdictions, it is when they don’t get an answer or a response,” he said.

The Cook Islands’ geographical location, just to the east of the International Date Line, means it is six hours behind New York, and six hours ahead of Hong Kong, but a day behind it.Jonassen jokes: “If you want something done yesterday, we can do it for you.”

Plaintiffs…face a se-ries of hurdles.

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• The World Economic Forum has developed a new metric of national economic performance as an alternative to GDP that also focuses on the living standards of people and futureproofing of economies.

• Inclusive Development Index shows that economies are prioritising policies that support short-term growth over inclusion and sustainability, despite concerns about social inequality.

• Rankings of 103 countries show which ones have the best combined performance on growth, equity and sustainability.

• Over the past five years, despite a growing world economy, social inclusion has fallen or been unchanged in 20 of 29 advanced economies and intergenerational equity has deteriorated in 56 of 74 emerging economies.

• Decades of prioritising economic growth over social equity has led to historically high levels of wealth and income inequality and caused governments to miss out on a virtuous circle in which growth is strengthened by being shared more widely and generated without unduly straining the environment or burdening future generations. These are the findings from the World Economic Forum’s Inclusive Development Index 2018, released 22nd January 2018.

gDP Fuels iNequality aND short-termism

Economies are prioritising policies that support short-term growth over inclusion and sustain-ability.

Excessive reliance by economists and policy-makers on gross domestic product as the primary metric of national economic performance is part of the problem, since GDP measures current production of goods and services, rather than the extent to which it contributes to broad socio-economic progress, as manifested in median household income, employment opportunity, economic security and quality of life.

The Inclusive Development Index is an annual assessment that measures how 103 countries perform on 11 dimensions of economic progress in addition to GDP. It has three pillars: growth and development; inclusion; and intergenerational equity – sustainable stewardship of natural and financial resources.

According to this year’s index, over the past five years, the 29 advanced economies included in the study have on average flatlined in terms of inclusion, which is measured by median household income, poverty, and wealth and income inequality, despite boosting their Growth and Development score by over 3%. The four indicators that make up the index’s Growth and Development pillar are: GDP per capita; labour productivity; employment; and healthy life expectancy.

Over the same period, only 12 of the 29 advanced economies were successful in reducing poverty and only eight saw a decrease in income inequality.

—Norway,the most inclusive advanced economy.

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More worrying still: rich and poor countries alike are struggling to protect future generations. The index’s Intergenerational Equity and Sustainability pillar – which takes into account public debt; carbon intensity of GDP; dependency ratio and adjusted net savings (which measures savings in an economy after investments in human capital, depletion of natural resources and the cost of pollution) – actually deteriorated in upper-, middle- and low-income economies since 2012 and improved only marginally (0.6%) in advanced economies.

Top performing countries

According to the index, the most inclusive advanced economy in the world in 2018 is Norway. The Nordic nation ranks second overall for intergenerational equity and third for the two other pillars of the index: Growth and Development, and Inclusion. Small European economies dominate the top of the index, with Australia (9) the only non-European economy in the top 10.

Of the G7 economies, Germany (12) ranks the highest. It is followed by Canada (17), France (18), the United Kingdom (21), the United States (23), Japan (24) and Italy (27). In many countries, there is a stark difference between individual pillars. For example, the US ranks 10 out of 29 for Growth and Development; however, it ranks 28 on Inclusion and 26 on Intergenerational Equity. France, on the other hand, fares less well on Growth and Development (21 out of 29); however, it ranks 12

for Inclusion. Its low ranking on Intergenerational Equity (24) suggests it may be storing up problems for the future.

Six emerging European economies are located in the top 10 spots in the emerging economies’ ranking: Lithuania (1), Hungary (2), Latvia (4), Poland (5), Croatia (7) and Romania (10). These countries perform well on Growth and Development, benefiting from EU membership, as well as on inclusion indicators, as median living standards rose and wealth inequality declined significantly. Latin America also performs well, with three countries featured in the top 10: Panama (6), Uruguay (8) and Chile (9).

Performance is mixed among BRICS economies, with the Russian Federation ranking 19th, followed by China (26), Brazil (37), India (62) and South Africa (69). Although China ranks first among emerging economies in GDP per capita growth (6.8%) and labour productivity growth (6.7%) since 2012, its overall score is brought down by lacklustre performance on Inclusion. Other emerging countries such as Mexico (24), Indonesia (36), Turkey (16) and the Philippines (38) show more potential on Intergenerational Equity and Sustainability but lack progress on Inclusion indicators such as income and wealth inequality.

Key findings and policy implications

IDI data suggest that relatively strong GDP growth cannot be relied upon by itself to generate

Strong GDP growth cannot be relied upon by itself to generate inclusive socio-economic progress.

—Photo above,Davos Klosters Mountains.

inclusive socio-economic progress and rising median living standards. All but three advanced countries have experienced GDP growth over the last five years, but only 10 of 29 have registered clear progress in the IDI’s Inclusion pillar. A majority, 16 of 29, have seen Inclusion deteriorate, and the remaining three have remained stable. A majority of those countries with the best GDP growth performance failed to improve on Inclusion. This pattern is repeated in the relationship between GDP growth and performance on Intergenerational Equity and Sustainability with 11 of 29 showing clear progress and 18 of 29 deteriorating.

Emerging country data show a similar disconnect between GDP growth and Inclusion. Of the 30 emerging economies with the highest GDP per capita growth over the past five years, only six have scored similarly well on a majority of the Inclusion indicators, while 13 have been no better than mediocre and 11 have registered outright poor performance. With respect to Intergenerational Equity, only eight have scored similarly well on a majority of the Intergenerational Equity and Sustainability indicators, while 12 have been no better than mediocre and 10 have registered outright poor performance.

This evidence suggests that GDP growth is a necessary but not sufficient condition for achievement of the broad-based progress in living standards by which most people judge countries’ economic success. This message is particularly relevant at a time when global economic growth is

returning to a more robust level and policy-makers could do more to future-proof their economies and make them more equitable. Political and business leaders should not expect higher growth to be a panacea for the social frustrations, including those of younger generations who have shaken the politics of many countries in recent years.

“Economic growth as measured by GDP is best understood as a top-line measure of national economic performance. Broad, sustainable progress in living standards is the bottom-line result societies expect. Policy-makers need a new dashboard focused more specifically on this purpose. It could help them to pay greater attention to structural and institutional aspects of economic policy that are important for diffusing prosperity and opportunity and making sure these are preserved for younger and future generations,” said Richard Samans, Managing Director and Head of Global Agenda at the World Economic Forum.

About the Inclusive Development Index

The IDI is a project of the World Economic Forum’s System Initiative on Shaping the Future of Economic Progress, which aims to inform and enable sustained and inclusive economic progress through deepened public-private cooperation, thought leadership and analysis, strategic dialogue and concrete cooperation, including by accelerating social impact through corporate action. For more information, visit wef.ch/igd18.

Political and business leaders should not expect higher growth to be a panacea for social frustrations.

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the best of germanyGermany has to be considered as one of the world’s premium destinations for FDI. This key global investment hot spot can point to government support, transport & IT infrastructure and access to a huge market with enormous spending power on its doorstep, as well as international markets through its excellent port and airport infrastructure. In addition, it has a rich reservoir of skilled labour, not to mention an enviable education system. Within this powerhouse nation of investment opportunity, Invest 2018 has identified the region most worthy of attention; namely, Hamburg.

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the University of Hamburg, HafenCity, HAW Hamburg and the Technical University. Meanwhile, its credentials on the technology front are second to none. For example, the XFEL science project has seen various research institutes and scientists relocate to Hamburg, while the region’s pre-eminence around research and innovation is epitomised by DESY, which acts as a perfect example of an interface between industry, business and academia, in its capacity as a national research centre that operates particle accelerators used to investigate the structure of matter.

Hamburg is further renowned for its research on nano-structures and the applications for medicine and biology, as well as Hamburg’s Laser Zentrum Nord (LZN), which develops individual and innovative solutions for its customers and acts as a catalyst for knowledge and technology transfer from research into industrial practice. It is known in particular, for its work with Airbus, which has garnered international attention, given the major implications this has for the transfer of 3D printing to industrial production. Other noteworthy aspects of Hamburg for the astute investor include CFK Valley Stade and its work with carbon fibres and composites, as well as the knowledge hub that is the ZAL TechCenter.

The city is keenly competitive, with office rents comparing favourably with other European hubs, such that it is well placed to benefit from Brexit in terms of the relocation or establishment of European headquarters for US or Asian companies, so leveraging Hamburg’s credentials in this space. That which further distinguishes Hamburg from other regions is its cluster policy around not just the maritime industry, but also aviation, automotive, bio-tech, healthcare, life sciences, logistics, media, IT and renewables. Meanwhile, further north, the Fehmarn Belt tunnel stands to enhance access to and from Scandinavian markets.

Hamburg has long been one of the primary cogs driving world trade.

—Hamburg.

hamburgH amburg, sitting proud on the banks of the

Elbe river in Northwestern Germany, has a strong trading tradition stretching right

back to the origins of the Hanseatic League in the 13th Century.

Known around the world for its shipbuilding credentials and those of its related maritime industries, its strategically significant location has ensured it has long been one of the primary cogs driving world trade. Ever the innovator, Hamburg has now embraced smart port logistics around infrastructure, traffic and goods flows.

Hamburg can also point to a rich academic environment, as evidenced by the likes of

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t he World Bank forecasts global economic growth to edge up to 3.1 percent in 2018 after a much stronger-than-

expected 2017, as the recovery in investment, manufacturing and trade continues, and as commodity-exporting developing economies benefit from firming commodity prices.

However, this is largely seen as a short-term upswing. Over the longer term, slowing potential growth - a measure of how fast an economy can expand when labour and capital are fully employed - puts at risk gains in improving living standards and reducing poverty around the world, the World Bank warns in its January 2018 Global Economic Prospects.

Growth in advanced economies is expected to moderate slightly to 2.2 percent in 2018, as central banks gradually remove their post-crisis accommodation and as an upturn in investment levels off. Growth in emerging market and developing economies as a whole is projected to strengthen to 4.5 percent in 2018, as activity in commodity exporters continues to recover.

“The broad-based recovery in global growth is encouraging, but this is no time for complacency,” World Bank Group President Jim Yong Kim said. “This is a great opportunity to invest in human and physical capital. If policy

slaCk in global eConomy exPeCteD to faDe

Growth in advanced economies is expected to moderate slightly to 2.2 percent in 2018.

makers around the world focus on these key investments, they can increase their countries’ productivity, boost workforce participation and move closer to the goals of ending extreme poverty and boosting shared prosperity.”

2018 is on track to be the first year since the financial crisis that the global economy will be operating at or near full capacity. With slack in the economy expected to dissipate, policymakers will need to look beyond monetary and fiscal policy tools to stimulate short-term growth and consider initiatives more likely to boost long-term potential.

The slowdown in potential growth is the result of years of softening productivity growth, weak

Global economy to edge up to 3.1 percent in 2018, but future potential growth a concern, says World Bank.

Invest2018

—Shanghai, China.

Escalating trade restrictions and rising geopolitical tensions could dampen confidence and activity. On the other hand, stronger-than-anticipated growth could also materialise in several large economies, further extending the global upturn.

“With unemployment rates returning to pre-crisis levels and the economic picture brighter in advanced economies and the developing world alike, policymakers will need to consider new approaches to sustain the growth momentum,” said World Bank Development Economics Prospects Director Ayhan Kose. “Specifically, productivity-enhancing reforms have become urgent as the pressures on potential growth from ageing populations intensify.”

In addition to exploring developments at the global and regional levels, the January 2018 Global Economic Prospects takes a close look at the outlook for potential growth in each of the six global regions; lessons from the 2014-2016 oil price collapse; and the connection between higher levels of skill and education and lower levels of inequality in emerging market and developing economies.

Regional Summaries

East Asia and Pacific: Growth in the region is forecast to slip to 6.2 percent in 2018 from an estimated 6.4 percent in 2017. A structural slowdown in China is seen offsetting a modest cyclical pickup in the rest of the region. Risks to the outlook have become more balanced. Stronger-than-expected growth among advanced economies could lead to faster-than-anticipated growth in the region. On the downside, rising geopolitical tension, increased global protectionism, an unexpectedly abrupt tightening of global financial conditions, and steeper-than-expected slowdown in major economies, including China, pose downside risks to the regional outlook. Growth in China is forecast to moderate to 6.4 percent in 2018 from 6.8 percent in 2017. Indonesia is forecast to accelerate to 5.3 percent in 2018 from 5.1 percent in 2017.

Europe and Central Asia: Growth in the region is anticipated to ease to 2.9 percent in 2018 from an estimated 3.7 percent in 2017. Recovery is expected to continue in the east of the region, driven by commodity exporting economies, counterbalanced by a gradual slowdown in the western part, as a result of moderating economic activity in the Euro Area. Increased policy uncertainty and a renewed decline in oil prices present risks of lower-than-anticipated growth. Russia is expected to expand by 1.7 percent in 2018,

2018 is on track to be the first year since the financial crisis that the global economy will be operating at or near full capacity.

investment, and the ageing of the global labour force. The deceleration is widespread, affecting economies that account for more than 65 percent of global GDP. Without efforts to revitalise potential growth, the decline may extend into the next decade and could slow average global growth by a quarter percentage point and average growth in emerging market and developing economies by half a percentage point over that period.

“An analysis of the drivers of the slowdown in potential growth underscores the point that we are not helpless in the face of it,” said World Bank Senior Director for Development Economics, Shantayanan Devarajan. “Reforms that promote quality education and health, as well as improve infrastructure services could substantially bolster potential growth, especially among emerging market and developing economies. Yet, some of these reforms will be resisted by politically powerful groups, which is why making this information about their development benefits transparent and publicly available is so important.”

Risks to the outlook remain tilted to the downside. An abrupt tightening of global financing conditions could derail the expansion.

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Middle East and North Africa: Growth in the region is expected to jump to 3 percent in 2018 from 1.8 percent in 2017. Reforms across the region are expected to gain momentum, fiscal constraints are expected to ease as oil prices stay firm, and improved tourism is anticipated to support growth among economies that are not dependent on oil exports. Continued geopolitical conflicts and oil price weakness could set back economic growth. Growth in Saudi Arabia is forecast to accelerate to 1.2 percent in 2018 from 0.3 percent in 2017, while growth is anticipated to pick up to 4.5 percent in the Arab Republic of Egypt in FY 2018 from 4.2 percent last year.

South Asia: Growth in the region is forecast to accelerate to 6.9 percent in 2018 from an estimated 6.5 percent in 2017. Consumption is expected to stay strong, exports are anticipated to recover and investment is on track to revive as a result of policy reforms and infrastructure upgrades. Setbacks to reform efforts, natural disasters, or an

unchanged from its estimated growth rate in 2017. Turkey is projected to moderate to 3.5 percent this year from 6.7 percent in the year just ended.

Latin America and the Caribbean: Growth in the region is projected to advance to 2 percent in 2018, from an estimated 0.9 percent in 2017. Growth momentum is expected to gather as private consumption and investment strengthen, particularly among commodity-exporting economies. Additional policy uncertainty, natural disasters, a rise in trade protectionism in the United States, or further deterioration of domestic fiscal conditions could throw growth off course. Brazil is expected to pick up to 2 percent in 2018, from an estimated 1 percent in 2017. Mexico is anticipated to accelerate to 2.1 percent this year, from an estimated 1.9 percent last year.

A structural slowdown in China is seen offsetting a modest cyclical pickup in the rest of the region.

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upswing in global financial volatility could slow growth. India is expected to pick up to a 7.3 percent rate in fiscal year 2018/19, which begins April 1, from 6.7 percent in FY 2017/18. Pakistan is anticipated to accelerate to 5.8 percent in FY 2018/19, which begins July 1, from 5.5 percent in FY 2017/18.

Sub-Saharan Africa: Growth in the region is anticipated to pick up to 3.2 percent in 2018 from 2.4 percent in 2017. Stronger growth will depend on a firming of commodity prices and implementation of reforms. A drop in commodity prices, steeper-than-anticipated global interest rate increases and inadequate efforts to ameliorate debt dynamics could set back economic growth. South Africa is forecast to tick up to 1.1 percent growth in 2018 from 0.8 percent in 2017. Nigeria is anticipated to accelerate to a 2.5 percent expansion this year from 1 percent in the year just ended.

(In South Asia) investment is on track to revive as a result of policy reforms and infrastructure upgrades.

—Cairo, Egypt.

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With much of the mining sector in the midst of a prolonged economic drought that has seen falling commodity prices,

reduced investment and a lack of new viable discoveries, it is gasping for good news. Yet with targeted ore bodies scarcer, typically of lower grade and increasingly challenging to extract, there is little to suggest an imminent return to the heady days of yesteryear, when cost control was for pedants and large profits were almost a given.

Cost then, has become everything. Yet, rather than looking at the Total Cost of Ownership (TCO) and mitigating the impact of Opex as the best way of wringing the most from existing assets, the drive to cut Capex, come what may, remains the chief influence on purchasing decisions, with even modest savings on initial capital outlay considered good business. The consequence of such a singular assessment of value has been a race to the bottom, with the introduction of kit ill-suited for the purpose at hand, having increased bottlenecks and downtime, whilst reducing the capacity to maintain the optimal productivity of plant sites. An industry that is feeling the pinch, where maintenance can constitute up to 50% of operating costs, must learn fast that focusing on upfront cost is a false economy. “Buy now, pay later” never sounded so bleak.

For suppliers of plants, systems and services, such an approach may seem at first glance like the gift that keeps on giving, as sales of spares increase and the cash keeps rolling in. Reputationally,

Focusing on upfront cost is a false economy.

tCo is the Way to go by James Wilson

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ining

Bringing data to bear will become easier as its availability increases.

however, it is risky business, for in promoting cheap, off-the-shelf solutions, they are, in fact, promoting inefficiency. Moreover, the cumulative effect of accelerated operational inefficiencies over a period of time, risks seeing projects suspended, mothballed or permanently shut down, which benefits neither side.

This state of affairs, meanwhile, is exacerbated by mining’s inherent conservatism and silo mentality, where data and information on best practice is not shared and innovation is viewed with suspicion, not just between competing suppliers, but within the mining set-up itself. Suppliers will denigrate the competition in an effort to secure sales and cement relationships, while plant operators can be more concerned with passing the buck, than enhancing productivity. So, each stage of the plant is seemingly focused on its own niche remit, role and mandate, rather than recognising its status as part of an interconnected system. Consequently, equipment is more likely to fail before problems are picked up, meaning downtime is increased and productivity takes a hit.

How then, to incentivise collaboration and breed a culture of cooperation, where each function and operational area understands the wider strategic objectives and that systems work better when viewed as a whole?

One measure could involve enhanced mandatory training that encourages the cross-fertilisation of ideas, thereby giving rise to a culture where each cog in the system has a better big picture understanding. To really drive this step-change, however, may require results-driven financial incentivisation that encompasses the whole staff spectrum from top to bottom, so that everyone involved has a vested interest in optimising productivity, in keeping with their pay grade.

Meanwhile, there is, at present, a distinct paucity of quantifiable data on the merits of viewing cost in terms of TCO and that which is available either does not flow freely, or is not well understood. This means it can be difficult to determine how best to reconcile cost efficiencies with increased output.

Bringing such data to bear will become easier as its availability increases, while there is no doubt it is set to become hugely important for informing and supporting strategy and in ensuring that disparate KPIs are linked to and reflect that strategy. It has the capacity to do no less than prove the route to optimisation, in so doing, eliminating hearsay and conjecture and allowing for enhanced real-time management, analytics and intelligence to be applied.

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W hen a board behaves dysfunctionally, the reverberations are felt throughout an organisation, as conflicting

agendas create cliques and an inability to realise effective strategy. With boards increasingly accountable, the importance of getting their composition right is paramount. Being able to draw on each directorial asset affords the greatest opportunity to do, rather than simply being seen to do the right thing.

A prime example of dysfunctional behaviour is critical information being withheld due to a lack of trust between the CEO and the Chair. Another is board members’ reluctance to challenge conventional wisdom with the result that ‘groupthink’ takes hold. Others include pushing personal agendas, contrariness, domineeringness, blame apportioning, hubris

investing in the boarD by James Wilson

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Maintaining and building relationships is crucial to ensuring the board functions well. Meeting outside the boardroom to get the true measure of a fellow board member can help here, but it must be a strictly social occasion to avoid being compromised. Moreover, an astute director will help to encourage differing views, seek the counsel of each board member and make sure to validate their input.

The most important relationship is that between chief executive and chairperson. A power struggle here can lead to adversarial behaviour across the board and side-track an organisation from other pressing matters at hand. Since the Cadbury Report on corporate governance of 1992 there has been a drive to keep these roles separate to ensure greater transparency and checks on power. As 2013’s How to Make Boards Work: An International Overview notes, ‘the CEO plays a very important role as the mediator between the management and the board, (while) the chairperson’s role is more of a moderator between shareholders, other board committees’ members and the CEO.’

The Cadbury Report, since acted upon across the globe, also argued that independent directors should predominate, as they are less bound by obligation. Conversely, the perils of patronage are keenly illustrated by the emissions scandal that has engulfed Volkswagen AG (VW). As the Financial Times pointed out in October 2015, ‘the cheating was predictable because of VW’s lax boardroom controls and peculiar corporate culture.’

Nor has VW learned its lesson. Hans Dieter Poetsch, CFO at the time of the scandal, now oversees the subsequent post-mortem as chairman. Markus Dufner, managing director of the German Association of Ethical Shareholders described him as ‘a conflict of interest personified’ at the Group’s agm.

The carmaker appears blind to the fact that disagreement is not dysfunctional, unlike its continued behaviour.

Diversified boards make for effective boards.

The most important relationship is that between chief executive and chairperson.

and megalomania, as well as an inability by some to value critique or support outcomes. All such behaviours risk leading to poor strategic decision-making, so reducing competitive advantage.

The key to remedying such behaviour is to prevent it happening in the first place. While it is important to achieve a blend of the right skills, character should also determine board composition, since bad character can act to paralyse a board, regardless of the formal processes in place.

Diversified boards make for effective boards. Strong female representation, an ethnic mix and a range of skills and experiences offer the greatest scope to meet any challenge. If an organisation has global interests, this too should be reflected.

photo cc by Art Library Fundação C

alouste Gulbenkia

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by James Wilson

F or some four thousand years, gold has held a unique allure, due to its scarcity, almost complete indestructibility and malleability.

Early societies operating independently of each other bestowed upon it the status of beauty, leading to its use as an adornment, so that when it came time to move beyond barter exchange, the usefulness of which was limited by its dependence on a coincidence of wants, these same qualities ensured it also became the natural choice as a currency, long before the introduction of paper money.

Despite its tangible physical properties, gold’s ancient historical pedigree, cultural cachet and association with splendour, has undoubtedly lent it a mystique. Yet, the spell that it casts has, in much of the modern world at least, also acted to retard its integration into the more abstract investment space.

On the one hand then, the fact that gold has been all too often ignored and overlooked over the years from an investment perspective can be attributed to market snobbery. On the other, gold has also been a victim of its own seemingly unique behaviour, for the yellow metal appears to behave differently to other asset classes and takes time to know.

The befuddlement over its identity, bearing and role has seen those in positions to accelerate its fortunes, exercise extreme caution. Just think of the SEC in the early 2000s, which, for a long time, could not get its head around gold exchange traded funds.

golD’s fortunes

The yellow metal takes time to know.

photo cc by deutsche bundesbamk

Investors are coming to realise the extent to which gold retains its purchasing power.

However, while thirty years ago, gold was an irrelevance in the investment space, today it is becoming increasingly ubiquitous, treated like a currency and established into the financial system, its qualities as a portfolio diversifier, a hedge and a safe haven, having never before been so widely recognised.

With investors coming to realise the extent to which gold retains its purchasing power, as outlined by Roy Jastram in his seminal work The Golden Constant, word on its ability to safeguard wealth through crises has spread. As Dr Alan Greenspan, former Chair of the US Federal Reserve, recently commented, ‘credit instruments and fiat currency depend on the credit worthiness of a counterparty, (but) gold…has an intrinsic value.’

As demographics have shifted and markets opened up, investors are increasingly able to disconnect

gold from its bar and coin physicality. This means it is not so readily viewed as an alternative asset, but more as a wealth preserver, so affording the confidence to invest in riskier assets.

Mainstream Gold

For many, gold remains peripheral to the financial architecture.

The key to widening participation and increasing allocations to gold, lies in policy makers and investment leaders coming to recognise that the yellow metal is a by-word for safety, security and stability. Moreover, the instruments for investment must be current and fit for purpose and the necessary information to hand to support its well-articulated investment case.

The message that gold is not just for the turbulent times is yet to get through, perhaps because it

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appears to run contrary to the established narrative. In the public relations space, nothing resonates like a straightforward soundbite. Think: ‘Make America Great Again.’

Given pension funds’ decades-long life cycles, gold has a very credible role to play in this space, for so long as there is an appreciation of some level of volatility over that period, history to date shows gold delivering preservation of the underlying value of the asset, risk mitigation and income generation. In addition, gold’s credibility will be given a boost as the world economy re-balances towards a multi-currency reserve system.

Gold is not just for the turbulent times.

It should be noted, however, that gold has already travelled some considerable distance on the road to mainstream status, most notably via Gold ETFs in mature western markets and Gold Accumulation Plans in China. Meanwhile, institutional investors in Japan are signalling the future, as they increase their gold holdings. This is a state of affairs likely to be echoed in the West in the years ahead, as those with long-dated investment horizons are compelled to rethink strategic asset allocation strategies in the face of enduring head winds.

Meanwhile, the retail and mass affluent end of the market also get that gold is an unparalleled

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Gold’s shift from West to East is set to continue.

insurance asset and alternative to cash to protect their wealth and pensions in difficult times.

With global financial markets cumulatively valued at well in excess of $150 trillion and gold accounting for less than 1% of that total, raising portfolio allocations, even fractionally, would have a significant effect on demand

West to East

Gold’s shift from West to East is set to continue unabated, with China and India’s dominance becoming, if anything, even more pronounced, driven by the type of continued economic growth

the West can only dream of, although others, such as Myanmar, Laos and Vietnam, are also set to make their mark.

As RMB globalisation gathers apace, the world will see the PBoC loosen its vice-like grip over gold imports and exports. That this will happen is not in doubt, it is only when that is open to debate. Gold has a major role to play in this story, which will ultimately see China having a bigger voice in price setting. As the world’s largest producer, consumer and exporter, this is as it should be.

photo cc by deutsche bundesbamk

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W

here the goal is to keep operations moving as swiftly and efficiently as possible, reliability and productivity are

key. A just in time approach, though dispensing with the need to carry large inventories, carries instead, inherent downtime risks, for when the thing that needs to be there ends up not being there ‘just in time’, the whole operation can quickly grind to a halt. Thus, the anticipated cost efficiencies associated with receiving goods only as they are needed can quickly be wiped out.

A pivotal part of managing and optimising just in time environments involves driving continuous innovation and improvement in material handling. Noteworthy developments on this front include increased automation, cleaner fuels, connectivity and smart factors, with telematics increasingly allowing for real time responsiveness both in-plant and across the supply chain.

Industry is excited about this capacity to harness the tracking and analysis of data, as it allows for significantly more accurate forecasting, something that has traditionally been a rather imprecise science. Cumulatively, applying such measures to the material handling side of a business can allow firms to harness the full potential of just in time and see productivity and profits soar.

Just in time demands intricate planning if its implementation is to be a success, for while the

Just in time, not Just in Case

Just in time demands intricate planning.

Driving continuous improvement in material handling is helping to meet the challenges of just in time across a range of industries.

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photo cc by moonez

advantages may be many, so also are the risks. On the plus side, with less stock being held, not only should insurance premiums go down, but better use can also be made of available space, and in some cases smaller, cheaper premises may suffice. In addition, waste is reduced, since obsolete or expired inventory ceases to be an issue. Moreover, less working capital is required to finance procurement, since only essential stocks for matters at hand are held, while an on-demand model eliminates over-production and its associated costs. Just in time also encourages best practice, as there is so little room for error when the model is applied, in addition to breeding improved relationships across the supply chain and with customers, given the requirement for close communication.

Yet, savings from just in time stock control must be weighed up against the cost of frequent deliveries, which equates to a loss of production economies of scale from bulk buying discounts and increased transaction fees. However, the principal disadvantage of just in time is a flip side of one of its plus points. Namely, that same zero tolerance for mistakes can also be the system’s downfall, whereby a manufacturer may be running the tightest of ships, yet its suppliers are marching

Scrimping on preventive measures is a false economy.

to a different beat. This can be compounded by unreliable or inefficient material handling operations, which have the capacity to knock just in time off kilter. Given the lack of slack in the system to accommodate delays by way of line balancing, what can quickly follow is costly production downtime. There are also concerns around who owns the data harvested, as well as how best to access, store and manage that data so that the benefits and actionable insights can be realised cost-effectively.

How then, to best reduce or eliminate the risks associated with just in time?

Fortunately, technological advancements can aid immensely in this endeavour, while a trend towards increased standardisation across supply chains is also set to pay dividends.

As Asvin Goel remarks in his book Fleet Telematics, ‘With reduced inventory buffers and narrow time windows for delivery, any mismatch between supply and demand can result in significant disturbances of manufacturing processes. Thus, manufacturing companies become increasingly dependent on punctual and reliable transportation.’

photo cc by rob young

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Man and Machine

It’s true that a big step towards meeting expectations of flexibility, punctuality and reliability which come with just in time, can be made by attending to the material handling fleet. Where drivers are involved, this should include ensuring warehouse conditions are up to scratch, drivers are suitably and continuously trained and vehicles both regularly inspected and adaptable to the requirements of different operators.

In attaching a high level of importance to the role of the operator, firms are likely to retain staff in greater numbers and get the best out of them, since they feel valued. With so little margin for error, and businesses reliant on material handling operators to consistently perform at their peak, such a mindset is essential if just in time is to fulfil its potential.

Scrimping on preventive measures, such as training, maintenance, using quality fuels or unassessed agency staff, is a false economy where just in time’s concerned. Similarly, a lack of investment in the right vehicles for the right job will deliver a poor price to performance ratio, while getting sloppy on procedure and best practice, such as minimum aisle widths, will

Material handling is increasingly marked by automation.

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soon translate to increased accidents and reduced productivity.

Cleaner fuels

While battery powered forklifts are increasingly popular for their clean fuel credentials, their selling points must be balanced against the need to regularly recharge, so temporarily taking equipment out of service and eating into productivity and profit. In addition, one must factor in the degree of fossil fuel burning required to make the electricity that recharges the battery. This downtime can, however, be substantially reduced through the deployment of CNG, LNG, LPG, or hydrogen fuel-cell-powered fleets.

Automation

Material handling is increasingly marked by automation, thereby freeing up workers for more value-added tasks and improving working and safety conditions.

Such Automated Guided Vehicles (AGVs) come in many forms, but what they have shared in common to date is the following of pre-defined routes. This, however, is set to change, thanks to the introduction of robotics, which through

Telematics represents the future of material handling.

sensors and self-driving technology will allow for autonomous movement between workstations for maximum efficiency.

The technology is already being put to good use by BMW, which has put to work a number of Smart Transport Robots (STRs) at one of its logistics centres in Germany. The Group’s Board Member for Production, Oliver Zipse explained it thus at a logistics conference in 2016: “In the long term, we want to move away from central steering towards the self-steering of objects in the supply chain.”

Other developments include autonomous tugger trains, which navigate by laser signals and are particularly suited to longer journeys such as those between buildings, as well as the introduction of 3D cameras to enhance navigation yet further.

It is important to note that companies such as BMW see these automation developments complementing, rather than replacing their staff, and with ever-ageing workforces and employee shortages in respect of material handling, it would appear to be a wise strategy.

As transportation management solutions provider Cerasis notes, ‘the advantages of automation are many: Improved production quality, improved

working and safety conditions, maximized floor space, increased level of profits—the list goes on.’

Connectivity

The ongoing evolution of the Internet of Things (IoT), which has enabled devices embedded in everyday objects to send and receive data, has given rise to the growth of telematics.

Literally, the merging of telecommunications and infomatics, telematics undoubtedly represents the future of material handling. Not only does it provide data to assist drivers in their work, but also allows for the widespread use of driverless vehicles and real time management of the fleet in its purest form. It is all part of the ceaseless quest for maximum productivity and minimum wastage that just in time demands. Furthermore, by monitoring the equipment in use, and managing and improving the driving style of its operators, it affords the opportunity for companies to access reduced premiums and maintenance costs.

While telematics is not new, for it to have integrated application across the supply chain, it must have the ability to transcend brand-specific proprietary software systems through a process of standardisation, which will allow for enhanced operational decision-making across mixed fleets, so helping to save both time and money. As EquipmentShare President Willy Schlacks notes, “If you’re attempting to optimise fleet operations and are only collecting or evaluating data on portions of the fleet at a time, that data is almost worthless.”

Telematics can deliver comprehensive data on everything from geolocation to engine performance and operating hours. When managed and interpreted correctly, this data can drive improvements in fuel efficiency, service life and safety, while working to fine-tune maintenance schedules and enhance work flow. Meanwhile, OEMs can use the data to inform R&D and provide bespoke accountable solutions to customers.

As Chris Wood from Construction Dive points out, “Telematics improves profitability by eliminating unplanned downtime for corrective maintenance, identifying excessive runtime and engine stress leading to fuel waste and otherwise keeping equipment fine-tuned and ready to roll.”

Just in time is all about optimising asset utilisation. Telematics takes the headache out of this by providing data that will identify unused equipment that can be re-assigned. In addition, it can assist in coordinating in- and outbound forklift

photo cc by MB

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truck journeys, so that the asset is constantly being utilised. When each journey counts, fuel, vehicle and driver costs are reduced and just in time works.

Supply chain

While a business may be able to streamline its own operations, its ability to influence up the supply chain has traditionally been limited to threats of lost business. However, with connectivity and smart technology improving all the time, and a thrust towards standardised software, telematics has the potential to create the conditions for a holistic view of operations all across the supply chain, so increasing responsiveness. Realising this potential, however, requires all parties to surrender a degree of autonomy to technology; something of an inevitability if competitiveness is to be maintained.

It is happening already, as a piece in the Financial Times notes: ‘Commercial fleet operators report that the development of single data and control

centres, which can integrate the operations of individual depots, is helping improve business efficiency.’

Such advances work wonders for just in time environments, since they increase efficiency and decrease waste by doing away with the need to forecast demand on the basis of conjecture. For a revolution in just in time to occur, however, it will require a universal subscription to a uniform open source platform, and thus a collective resolve from industry to collaborate.

With applications not just in-plant, but also to inbound, outbound and international logistics, the era of the fully connected supply chain is surely not far away, where digital technologies will seamlessly govern complex logistics processes. Moreover, cloud-based data management will ensure connectedness between OEMs, suppliers, logistics providers and customers, thereby allowing organisations to be both flexible and responsive in meeting the customers ever more exacting customisation requirements.

‘The era of the fully connected supply chain is surely not far away.’

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photo cc by haru q

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