Monday, April 24, 2006

After Objective One

The IPPR has released a new report on what the UK should be doing with the next generation of European Structural Funding, once the current Objective One programme ends. South Yorkshire has had the (yet to be fully quantified) benefit of Objective One since 2000, as has Merseyside (for the second consecutive time), and some of the Celtic fringes. From 2007, South Yorkshire and Merseyside will lose the bulk of their funding, thanks in part to European expansion since the last round. The expansion also means that there's unlikely to be further ESF money for the wealthy UK after this round, so this is, as the IPPR says, 'last orders'.

From the IPPR press release, the new funding for 2007-2013 breaks down thus:
Total UK share of the EU Structural Funds: £6.5 billion.
Convergence objective: £1.8 billion: replaces Objective 1. Only Cornwall and the Isles of Scilly; West Wales and the Valleys; and Scotland’s Highlands and Islands are eligible. No major urban area will benefit – a change from 2000-2006, when both Merseyside and South Yorkshire had Objective 1 status.
Competitiveness and Employment programmes: £4.3 billion. This covers all other areas of the UK, replacing the old Objectives 2 and 3. Merseyside and South Yorkshire will receive ring-fenced funding of £310m and £275m, about one-third of their 2000-2006 EU allocations. The distribution of the remaining £3.5 billion has not yet been decided.
Co-operation programmes: £0.4 billion. This covers cross-border collaboration.
These funds will be spread over seven years, equivalent to around £900 million each year for the whole of the UK. Domestic spending on enterprise and economic development alone amounted to £4.7 billion in 2004-05 (HM Treasury, 2005).

The IPPR's Centre for Cities recommends that the uncommited £3.5 billion be concentrated on city-regions, particularly those away from the affluent (on aggregate) and over-developed South East -
it is the big city-regions outside London – Birmingham, Manchester, Leeds, Tyneside and Glasgow – that can most effectively use limited EU resources to deliver a step-change in economic growth. investment, enterprise, innovation, skills and employment.

Sensible enough, even though the idea of city-regions has yet to win many admirers in the regions rather than the cities - such as Halifax and Calderdale, where the councillors seem to bristle at being made to seem subordinate to Leeds. And given the IPPR's traditional closeness to New Labour, I wouldn't be surprised to see these recommendations being carried through to some greater or lesser extent.

A pdf of the full IPPR report can be downloaded here.

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Thursday, April 20, 2006

The car crash came into its own

Despite appearances, these aren't, strictly speaking, new additions to the Ballardian photo file. The presence of high rise apartment blocks, the skeletal outline of a half-constructed institutional building, the bleak urban highway - these are just coincidence. This is, however, the scene of a crash, though hardly one to excite Dr Vaughan.

At the end of March, immediately after passing over the Brook Hill roundabout by the University of Sheffield, a truck belonging to the venerable H Askey Transport firm (aka Arundel Motors), drifted without singalling from one lane of the Netherthorpe Road dual carriageway to the other, neatly removing the front corner of my Saab. There were fortunately no injuries - and, contrary to the expectations of casual readers of Ballard, no sexual frissons to speak of.
The other party are contesting my claim for repair costs, hence these photos, taking several weeks after the event, for the benefit of the solicitors. The aerial photography available at Google Maps is also proving valuable in countering the other party's claim that lane priorities around the roundabout are other than what they actually are.

The building visible at extreme left of this picture, as it happens, is the new Sheffield Bioincubator, a new "purpose built facility providing the ideal environment for entrepreneurial bioscience to flourish into successful business". It's built in the grounds of the old Jessops Women's Hospital, where I was born. Mr Ballard, I suspect, could hardly have selected a more fitting location for this minorly fateful intersection of trajectories.

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Wednesday, April 19, 2006

An entrepreneur's guide to exits

Now up at the Real Business site (and, of course, in the printed edition) is a lengthy feature I wrote for them on how to sell your business.

While there's no shortage of advice (of varying quality) on how to start a business, there's rather less advice on how to sell it. For many people who start businesses, it's because it's something they want to do and stay with for a long time. But an increasing number, especially those fuelled by VC money, are starting businesses with the aim of rapidly building value, selling them, taking the bulk of the money out and then doing it all over again. Selling out is both the route to riches and a badge of honour.

The feature was written as sponsored by business sale specialists Cavendish Corporate Finance, who necessarily feature heavily in the piece.

Direct [updated] link here, but use the link above to go to the main page. There's plenty of other good stuff there, including another look at the progress of the Regional Venture Capital Funds. I've written another Doing Deals feature for the next edition of the mag, exploring the wider dearth of early stage VC in the UK.

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Daddies' boys

More economic research from Robin Naylor at the University of Warwick on intergenerational social mobility. He finds that Western societies show a strong correlation between the earnings of a father and his son, implying low social mobility - and the effect is strongest in the supposedly classless US.

Despite the commonly-perceived view of the US as an 'open' society with ready opportunities for individuals to rise from poverty to affluence (from 'rags to riches'), the evidence shows that the opposite is true. On average, a son's earnings are more closely related to his father's earnings in the United States than in any of the other countries.
In the UK, the connection between sons' earnings and fathers' earnings is weaker than in the United States, but stronger than in the Nordic countries. There is substantial earnings 'persistence' across the generations in all countries.

So, discounting any (very faintly) possible genetic factors, all the blether about the 'land of opportunity' over there or the 'meritocracy' here is exactly that. Unsurprising, but nice to have the confirmation.

Another finding:
In all of the countries, intergenerational earnings persistence is most pronounced in the 'tails' of the distributions. In other words, the likelihood of a son having earnings similar to his father's is greater for those born into particularly poor or particularly affluent backgrounds.
What this implies is that in the long term, the middle classes between these two extremes will bifurcate between the very rich and the very poor, as social mobility out of the middle is greater than mobility out of the extremes. This then implies an increasingly polarised society, as can be seen to some extent in the US and UK. The long term prospects for stability (and thus for continued growth) are not bright.


Big swinging dicks

Some fun (if not entirely surprising) research in behavioural economics reported in the Guardian - men with high testosterone are more likely to make bad financial decisions when they're sexually distracted.

Bram van den Bergh and Siegfried Dewitte at the University of Leuven in Belgium set 44 student volunteers aged 18 to 28 a financial game to test how they reacted to fair play. The game required the students to split into pairs and before half of the games, one of each pair was shown images of a sexy woman or asked to rate how much they liked a variety of lingerie.
The results showed that men exposed to what the researchers call "sexual cues" accepted unfair play far more than men who were not. The researchers later ranked the men according to their testosterone levels and found that the more testosterone a man had the worse he fared in the tests, they report in the journal, Proceedings of the Royal Society B.

The implications for the macho, 'big swinging dick' world of the City and Wall Street demand to be explored. Maybe the investment houses should start slipping bromide into the trading floor watercoolers - or at least, crack down on corporate junkets to Spearmint Rhino.


Tuesday, April 18, 2006

Architectural conjecture

I've contributed a few questions to a forthcoming interview for with Geoff Manaugh of the excellent BLDG BLOG site.

BLDG BLOG describes itself as concerned with architectural conjecture, urban speculation and landscape futures - often beautifully illustrated ruminations on (post)modernist, derelict and speculative architecture, its social and psychological implications, and the ineffable beauty thereof. A mission statement of sorts:
We have more to learn from the fiction of J.G. Ballard and the international warehousing strategies of Bechtel than we do from Le Corbusier. The good city form of tomorrow is a refugee camp built by Brown & Root; the world’s largest architectural client is the U.S. Department of Defense. More people now live in overseas military camps than in houses designed by Mies van der Rohe – yet we study Mies van der Rohe.

The interview will be concentrating, mostly, on exploring Manaugh's admirable fixation on Ballard, and the psychopathological implications of architecture as explored in his prophetic novel High Rise. Does the angle between two walls have a happy ending? Find out when the full interview appears on shortly.

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Friday, April 07, 2006

Spring break

I'll be away for the next week, tramping the hills round Loch Ness. Normal service will be resumed straight after Easter - if you need to get in touch, drop us an email and I'll get back to you asap.