Posts in category Business


ApprovedBusinessBusiness and finance

The great divergence

ONE of Joseph Schumpeter’s best-known observations was that successful businesses stand on ground that is “crumbling beneath their feet”. A danger is that standing still and resting on your laurels can precipitate a swift tumble. Rivals, meanwhile, can draw on the available stock of knowledge and technology to catch up with the leaders. To stay ahead, front-runners must keep inventing new things. This means that capitalism is inherently unforgiving: today’s leader is tomorrow’s failure. But it also means that it is inherently progressive, since clever ideas are quickly spread through the economy.

Some striking new research suggests that this Schumpeterian mechanism may have broken down. The leaders are staying ahead much longer than is desirable. A group of researchers at the OECD, a club of mostly rich countries, examined the performance of a representative set of companies in 24 of its 35 member countries between 2001 and 2013. They discovered that the top 5% of them, dubbed “frontier firms”, have continued to increase their productivity while the other 95% (the laggards) have been stagnant in this regard.

Plenty of economists…Continue reading

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System crash

The world according to Thiel

“I’D LIKE to wake up now please,” tweeted Sam Altman, who heads Y Combinator, Silicon Valley’s foremost startup school. The sentence neatly encapsulates the mood in the high-tech hub. To many in the technology industry, America under Donald Trump means dystopia. Perhaps no other sector regards his victory with less enthusiasm.

The main reason is that his stated views are antithetical to the beliefs that most entrepreneurs and tech types hold on a range of topics from trade to offshoring to policy on immigration. By one estimate the tech industry gave nearly $8m to Hillary Clinton’s campaign. Silicon Valley also worries that it will lose its direct lines to the administration in Washington. According to the Campaign for Accountability, a transparency group, no fewer than 22 former White House officials have gone to work for Google since Barack Obama moved in. Under Mrs Clinton the door would have kept revolving.

Only one noted Valleyite is likely to have the president’s ear: Peter Thiel, a venture capitalist. He alone supported Mr Trump, speaking at the Republican convention…Continue reading

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The big sort

“THE vultures all start circling, they’re whispering, ‘You’re out of time’…but I still rise!” Those lyrics, from a song by Katy Perry, an American pop star, sounded often at Hillary Clinton’s campaign rallies but will shortly ring out over a less serious event: a late-night party in Shenzhen to kick off “Singles’ Day”, an online shopping extravaganza that takes place in China on November 11th every year.

The event was not dreamt up by Alibaba, but the e-commerce giant dominates it. Shoppers spent $14.3bn through its portals during last year’s event. That figure, a rise of 60% on a year earlier, was over double the sales racked up on America’s two main retail dates, Black Friday and Cyber Monday, put together. Chinese consumers are still confident, so sales on this Singles’ Day should again break records.  

It points to an intriguing question: how will all of those purchases get to consumers? Around 540m delivery orders were generated during the 24-hour spree last year. That is nearly ten times the average daily volume, but even a slow shopping day in China generates an enormous number. By the reckoning of…Continue reading

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Fighting fit

CONTROVERSY over the relationship between BAE Systems, Europe’s largest defence company, and one of its main customers, Saudi Arabia, was raging when Ian King, its chief executive, started his job in 2008. BAE’s link to Saudi Arabia was forged 30 years ago with the first “al-Yamamah” arms deal. It saved the firm amid a difficult business environment, but embroiled it in a long-running corruption scandal that even led to Mr King’s immediate predecessor, Mike Turner, being briefly detained by America’s Department of Justice just before he stepped down.

The new boss’s mandate eight years ago was to banish BAE’s old, buccaneering ways and make it the acme of squeaky-clean corporate governance. Now, as Mr King prepares to leave and hand over to a successor, the firm is once again under fire for its ties to the house of Saud, this time for supplying its wares to support the kingdom’s war in neighbouring Yemen. A rising chorus accuses the Saudi-led coalition of using its Western-supplied and maintained air power indiscriminately in its campaign against Iranian-backed Houthi rebels.

Human-rights activists are trying to use…Continue reading

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A long road to recovery

THERE are two ways of dealing with a worrying problem in a car engine. One is a complete overhaul; the other is to tinker under the bonnet and hope the trouble goes away. Volkswagen’s efforts to deal with an emissions-cheating scandal that emerged in September 2015 are of the tinkering type. The German carmaker is desperate to draw a line under its ill-fated decision to fit software to 11m diesel cars that detected emissions tests and artificially reduced the amount of nitrogen oxide pumped out. But the disconcerting rumbles continue.

The latest setback came on November 6th, when VW said that a German investigation of market manipulation was examining the role of Hans Dieter Pötsch, chairman of its supervisory board. The probe, which began in June, is looking at whether Martin Winterkorn, VW’s former chief executive, and Herbert Diess, who oversees the core VW brand, should have disclosed the emissions cheating before the company publicly admitted wrongdoing. This is deeply uncomfortable for both VW and Mr Pötsch, who used to be the chief financial officer and was nominated to become chairman on the day the crisis began. It is also a reminder…Continue reading

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African potholes

“I WAS lucky my customers were three big white guys,” says Themba, an Uber driver in Johannesburg recounting a close call with taxi-drivers who tried to block him from collecting passengers at the airport that serves South Africa’s economic hub. “They pushed them out the way and we managed to drive off.”

The ride-hailing app has made a splashy if slow start in Africa. Of the 529 cities in which Uber connects riders with drivers, just 14 are on the continent. Yet Africa is fertile ground for a firm offering cheap and safe transport. Most passengers have to spring for overpriced cabs or catch a white-knuckled ride on the back of a motorcycle taxi.

In Abuja, locals have long used a low-tech version of ride-sharing. Many folk simply stick out a hand at the roadside to hail any passing car before negotiating a fare. Yet locals warn that fake taxis cruise the streets with robbers hiding in the boot, ready to jump out at a traffic light. In Lagos some taxi-drivers are even thought to be in cahoots with kidnappers. Not surprisingly, Uber seems to be growing quickly in the few cities where it has launched. In many places rides cost less…Continue reading

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ApprovedBusinessBusiness and finance

Meet the new boss

ALTHOUGH he styles himself as a chief executive who can turn the country around, Donald Trump is an outsider in the world of American business. His commercial operation is tiny by the standards of the country’s mega-firms and few of their bosses have ever viewed the president-elect as an equal or ally. He has “no friends” among the business elite, sniffed a private-equity baron a few weeks ago, who will doubtless now join a queue of executives waiting at Trump Tower to curry favour and to assess the new man’s priorities before he assumes office.

Those supplicants will soon discover that Mr Trump’s attitude towards business has three contradictory strands. He is passionate about unleashing the might of the private sector in order to revive growth. There is certainly plenty of scope: last year listed American companies invested a mediocre 46% of their total cashflow. Yet he is also a populist who thinks the economy is rigged in favour of big business and crony capitalists, and he is a protectionist. In the coming months these three different strands will respectively excite, worry and scare the business world.

Start, first, with the…Continue reading

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China’s big aerospace ambitions are delayed

I think we need to make it bigger

STEALTH fighter jets are designed to be as furtive as possible and sneak through radar without being noticed. China’s new J-20 stealth fighter demanded plenty of attention as it roared over the heads of spectators during its public debut at the Zhuhai air show this week. The message was clear: China is aiming high in the aerospace business. That ambition, though, is as much about commercial aircraft as it is about fighter jets, and in particular one model was noticeably absent from the show: the C919, a single-aisle short-haul passenger jet which China is developing to take on Airbus and Boeing.

\Over the next 20 years both the European and the American aerospace giants forecast that China will become their biggest single market due to demand for new aircraft by Chinese airlines keen to meet the rising middle classes’ desire for air travel. Boeing estimates that…Continue reading

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Digital advertisers battle over online privacy

ONLINE advertising is booming. Digital-ad revenues in America in the first half of the year reached a record $32.7bn, according to the latest figures from the Interactive Advertising Bureau, a trade group. For marketing folk, digital ads have great appeal because consumers’ online data can be used to direct what they think are the right advertisements to the right shoppers. But tracking has become increasingly contentious in both America and Europe.

On October 27th America’s Federal Communications Commission (FCC) announced a new rule to protect personal privacy online. Internet-service providers, such as AT&T and Comcast, must now ask consumers for permission if they want to gather and share data deemed to be sensitive, including financial information and users’ browsing history.

However, the FCC’s rule is notable not for settling a debate, but stirring it. Marketers and digital-ad firms insist that they already police themselves well. They consider data on browsing and apps, in particular, to be essential for targeted advertising. Under the FCC’s rule consumers can “opt in” to share this information, but firms fear that many will not.

There is a limit to the FCC’s order, which perversely makes it only more controversial. It will restrict data collection by internet providers, but have little impact on broader online tracking….Continue reading

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How to rev up Japanese startups

Naka does it her way

WANTEDLY, a LinkedIn for Japan’s millennials, would not be out of place in California. The thriving firm’s offices feature trendy furniture and a ping-pong table. Akiko Naka, the 32-year-old chief executive leads a young team that forgoes the usual black-and-white attire of Japanese business to pad around in jeans and socks. Meeting rooms are named after characters from a famous manga comic.

Yet Wantedly is a rarity. Since the fertile years of the 1980s, and a brief dotcom boom that began in the late 1990s, Japan has fared badly in encouraging similar startups. Just 31% of Japanese think being an entrepreneur is a good career choice, beating only Puerto Rico at the bottom of a study carried out in 2014 by Global Entrepreneurship Monitor (GEM), a report compiled by a group of universities worldwide. By comparison, America scored 65%, China 66% and the Netherlands 79%. Shinzo Abe, Japan’s prime minister, has tried to encourage people to start new businesses to help revive the economy. Startups create more jobs, and more productive ones—something Japan desperately needs. (Its…Continue reading

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ApprovedBusinessBusiness and finance

Tech firms shell out to hire and hoard talent

LARGE technology firms used to hold on to their high-flying employees by agreeing not to poach them from each other. “If you hire a single one of these people, that means war,” Steve Jobs, Apple’s then boss, warned Sergey Brin, a founder of Google, in 2005. That was an illegal arrangement, and in 2015 Apple, Google, Adobe and Intel paid a $415m settlement to engineers whose pay had been held down as a result.

Today wage suppression in Silicon Valley is even more of a distant memory than dial-up internet and mainframe computers. Last year technology companies in America recorded expenses of more than $40bn in stock-based compensation. Exact comparisons are difficult, but to put that sum in perspective it is roughly 60% more than the bonus pool paid to the New York employees of Wall Street banks.

The money tech firms throw at employees has ballooned as competition to hire and hang on to top talent in engineering, data science, artificial intelligence and digital marketing has soared. Even entry-level engineers can easily earn $120,000 a year, more than most people their age can make on Wall Street; mid-career executives with technical…Continue reading

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The niche in phones that are different

You’ll have to speak up, I’m on my niche phone

ON JANUARY 9th 2007 Steve Jobs stood before an audience of some 45,000 people in San Francisco and announced a “revolutionary and magical product”: a slight slab of expansive black touchscreen with just a single button. Compared with the ugly, cluttered devices of the day, the iPhone was revolutionary. It was also hugely influential. A technicolour pageant of rival designs—the clamshell, the slide, the banana, the candybar and the BlackBerry—resolved into a uniform black mirror. And nearly every smartphone on the planet still looks like the device which Jobs revealed that day.

Nor is that similarity to be found just in hardware design. Nearly a fifth of smartphones sold last year operate on Apple’s iOS software. The rest run variations of Android, an open-source operating system provided by Google. Just two companies—Apple and Samsung—accounted for over 40% of smartphones sold in 2015, according to CCS Insight, a research firm. Huawei came in a distant third with 8%.

In this bland and uniform market some producers spy an opportunity. One of those is…Continue reading

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Los Angeles booms as startup hub

Better than surfing down Sand Hill Road

HOLLYWOOD has produced plenty of films about underdogs rising to claim the limelight. Now Los Angeles is experiencing its own real-life Cinderella story, as the area’s technology scene has been transformed from backwater to boomtown in just a few years. Hordes of venture capitalists from northern California, once long dismissive of their southern neighbour, now regularly commute in search of deals in a less heavily hunted spot than the Bay Area. In 2016 the city’s startups received around $3bn in funding, around six times more than in 2012, according to CB Insights, a research firm.

Evan Spiegel went to Stanford University in the heart of Silicon Valley, but he wanted to live and work close to the sea. So he based his new company one block from the Pacific in Venice Beach, which is better known in Los Angeles for its silicone-enhanced bodies than the silicon chips that gave the Valley its name. Mr Spiegel’s firm, Snap, is best known for its ephemeral Snapchat social-media messages and is now valued at a whopping $18bn. Other successful technology firms are thriving nearby, including…Continue reading

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ApprovedBusinessBusiness and finance

Political business

AS AMERICA’S presidential election approaches the country’s business class is in its weakest political position for decades. Twenty years ago both parties competed to be the most pro-business. Today they compete to denounce the malefactors of great wealth. The most startling change is that business has lost control of its ancestral party, the Republicans. Donald Trump may well embody many an American business type: somebody who inherits a fortune and goes on to make it even bigger. But he has taken over the Republican Party by channelling blue-collar anger against all elites.

Mr Trump has trashed free trade, liberal immigration rules and other corporate non-negotiables. Big companies have shied away from donating to his campaign. Meg Whitman, the boss of Hewlett Packard Enterprise, has called him “reckless and uninformed”. Tom Donohue, head of the United States Chamber of Commerce, has described his policies as “pretty sort of stupid”.

All this has driven lots of business people to cross the political aisle: an Ipsos poll shows that 53% of those earning $250,000 or more (the top 5% of households) plan to vote for Hillary Clinton,…Continue reading

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Brazilian firms emerge from the gloom

“BRAZIL is back in business,” proclaimed Abílio Diniz, chairman of BRF, a Brazilian pork and poultry giant, at a recent investor shindig. Really? The economy, mired in recession since mid-2014, is not expected to stir before the end of the year—and then only sluggishly. After rebounding in the first half of 2016, industrial production plummeted again in August. Retail sales fell by more than forecast. Firms expect to hire just 100,000 temporary workers in the run-up to Christmas, 3% fewer than last year’s already low tally. BRF’s own domestic operations are hardly a picture of health. Sales dropped by 5% in the second quarter, year on year (though this was offset by rising global revenues).

For all that, Mr Diniz is not alone in his optimism. Surveys point to rising confidence among bosses and consumers alike (see chart). Investors’ spirits are up—and with them the São Paulo stockmarket, which has returned to levels last seen in 2012. The real has strengthened by a third against the dollar since January.

The collective mood swing has less to do with the real economy, and more with realpolitik. In August the…Continue reading

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Big tobacco’s new ambitions

Innovator at work

BIG Tobacco is about to get even bigger. On October 21st British American Tobacco (BAT) announced that it had bid $47bn for the 58% of Reynolds American that it does not already own. Though Brexit has weighed on some British companies, BAT is unencumbered, with most of its revenue earned overseas. Many investors expect the deal to go ahead, although BAT might need to puff up its offer. BAT would then become the world’s largest tobacco company by sales and profits.

As in other volume businesses, like beer, some of the merger logic is simply to cut costs. With consolidation, BAT reckons its deal would generate $400m of annual savings. However, it also underscores two big, long-term changes for cigarette-makers.

The first is that America has become an attractive market for tobacco firms and buying Reynolds, whose brands include Camel and Newport, is the easiest way for BAT to grow there. This is a reversal from the recent past. Not long ago America seemed stale and overrun by lawsuits, particularly compared with fast-growing economies. Cigarette firms quarantined their American businesses. In 2004…Continue reading

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New York deflates Airbnb

No rules broken here

IN 2007, Brian Chesky and Joe Gebbia came up with a wheeze to rent out two air beds in their San Francisco apartment, because a conference had left the local hotels full-to-overflowing. Thus, Airbed & Breakfast was born. Since then, the firm’s only contraction has been its name. Today, Airbnb’s website lists over 2m properties for short-term let in 191 countries. Piper Jaffray, an investment bank, estimates that bookings through the firm will reach $14.4bn in 2016, compared with $52m in 2010. Analysts think the upstart might fetch $30bn were it to be taken public. That would make Airbnb worth more than Marriott, the world’s largest hotel chain.

But legislation signed in New York state on October 21st has taken some of the puff out of Airbnb’s mattress. New York City is the firm’s largest market in America, with around 35,000 properties available for rent. But many of the hosts offer their apartments illegally. In 2010, the state passed a law banning rentals of whole units in residential blocks for less than 30 days. (It is legal to do so if the tenant is living there at the same time.) To…Continue reading

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How to confront a dark corporate past

“WE THOUGHT we knew our story, and we knew it wasn’t great,” says Maurice Brenninkmeijer, chairman of COFRA Holding, which owns C&A, a 175-year-old Dutch clothing retailer with over 2,000 stores globally. Yet the full account of how the German branch of his family behaved in the second world war “tore through your heart when you heard it”, he adds. Mr Brenninkmeijer’s ancestors—considered to be genial, virtuous, Catholic and reserved—turned out to have been avid Nazi collaborators. Old letters revealed cosy, corrupt, ties to Hermann Goering. From 1942 onwards C&A and Siemens, a German engineering firm, together exploited forced Eastern European labourers in Germany, keeping them in such a wretched state that malnutrition killed several women and children. C&A profited from “Aryanisation”, grabbing business and property from terrified Jewish owners. Perhaps worst, it used Jewish tailors and leather-workers, corralled in Lodz, a dreadful ghetto in Poland. Of some 200,000 people trapped in inhumane conditions there, only 1,000 survived to liberation.

Such grim details are now public thanks to Mark Spoerer, a historian in Regensburg who specialises in archival research to assess companies’ dark pasts, putting “immoral business behaviour” into historical context. Remarkably, his new book “C&A: A family business in Germany, the…Continue reading

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Angling for the future of TV

IMAGINE a television which, as in the old days, has only a handful of channels to choose from instead of hundreds, as a typical cable set-up might offer today. In a decade or so TVs will once again have only a few channels, but each will run miles deep, with content that can be viewed on demand. Netflix might be one such offering; Amazon another. Both firms are spending billions of dollars making and buying TV shows and films to sell directly to viewers to watch when they like, and on devices other than the box in the corner of the room. And other rich tech firms may join them.

It is this vision that is now driving the direction of television and media. Broadcasters are willing to pay more to show live sporting events, and to invest more in producing TV shows, to make their networks the must-see choice for viewers. This trend has spurred the largest-ever merger of a telecommunications company with a media firm. AT&T, America’s wireless and pay-TV giant, announced on October 22nd an offer for Time Warner, the owner of HBO, CNN and Warner Brothers studio, worth $109bn. In doing so AT&T is betting that a few vertically integrated platforms will…Continue reading

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Jail bait

ONE thing right-wing populists and left-wing progressives can agree on is that society is too soft on white-collar crime. Conservatives abandon their admiration for business when it comes to “crooked bankers”. Left-wingers forget their qualms if locking up “corporate evil-doers”. Hillary Clinton’s line that “there should be no bank too big to fail but no individual too big to jail” would go down equally well at a Donald Trump rally.

But is society really soft on corporate wrongdoing? And would locking up bankers and businessmen and throwing away the key really solve any problems? Two new books try to inject reason and evidence into a discussion more commonly driven by emotion and hearsay: “Why They Do It: Inside the Mind of the White Collar Criminal” by Eugene Soltes, of Harvard Business School, and “Capital Offenses: Business Crime and Punishment in America’s Corporate Age” by Samuel Buell, the lead prosecutor in the Enron case, who now teaches at Duke University.

Messrs Soltes and Buell both demonstrate that America is getting tougher on business crime. Between 2002 and 2007 federal prosecutors convicted more than 200…Continue reading

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Cyrus Mistry hits back at being ousted from Tata

THERE have only been six chairmen of the Tata Group since it was founded in 1868. There will soon be a seventh after Cyrus Mistry, the first boss of the conglomerate not connected to the founding family, was ousted after less than four years in charge. Even though he undertook few of the reforms needed to bring vast swathes of the Tata empire to profitability, he will prove a difficult act to follow. That the ousted man has now embarked on an extraordinary rampage against his old employer will scarcely help.

Mr Mistry might reasonably have expected to serve for a couple of decades at the helm of India’s biggest group, with interests from IT to cars, hotels, salt, steel and much else besides. His departure on October 24th was a surprise. For a company with a culture of consensus, the abruptness of his sacking—the board did not even give him the option of stepping down, and the purging of many of the top executives he had hired—is about as brutal as it comes. Ratan Tata, his predecessor, will take over while a new boss is found.

The catalyst for the defenestration was the lack of performance at some of the group’s big companies….Continue reading

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AT&T and Time Warner plot a blockbuster media future

A DEAL worth $85.4bn is by any standards a blockbuster. The agreement by wireless and pay-television giant AT&T to buy Time Warner, owner of Warner Bros, HBO and a trove of hit films and TV shows, is the biggest bet yet that the future of media will be dictated by massive companies that best marry distribution with content.

The merger, announced by the two companies in the evening on October 22nd, does not ensure that AT&T, a traditional telecommunications company, will end up as one of those winners. But Randall Stephenson, who as AT&T’s chief executive will steer the combined company, is assembling the pieces he believes he needs to get there.

AT&T just last year completed the $48.5bn purchase of DirecTV, a satellite provider, making the company the largest pay-TV distributor in America with 25m subscribers. AT&T is also the country’s second-largest wireless carrier, behind Verizon Communications. The company now is set to add one of Hollywood’s most storied studios in the form of Warner Bros, a prestigious cable network in HBO, valuable cable channels like TNT, TBS and CNN, and a rich library of film and…Continue reading

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The trials of Juno

IN THE pharma business, Juno Therapeutics, a small firm based in Seattle, is just a stripling. It is three years old, has not a single drug approval to its name but is nonetheless valued at $2.8 billion. That value is derived from the fact that it is on the forefront of the most promising area of cancer treatments in decades: immuno-oncology.

Juno’s edge comes from its attempts to master one of the most important parts of the immune system: the T-cell. It is developing a so-called CAR-T therapy, in which its scientists extract T-cells from a cancer patient, modify them with gene therapy so that they can recognise cancer cells, and then put them back in the patient’s body ready to attack. The process has a reputation for inducing rapid remissions in cancers of the blood for patients who have exhausted all other options.

Small, innovative biotech firms such as Juno are intriguing because nowadays they are the main engine of global drug innovation. Alexis Borisy, a partner in Third Rock Ventures, a venture-capital firm in Boston, notes that pharma companies now buy in three-quarters of their pipelines, and develop only…Continue reading

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Well-connected

INSIDE the atrium of a gleaming new building on the outskirts of Addis Ababa, trainee air stewards flit between the classrooms and aeroplane simulators that surround a large indoor swimming pool. The expensive aviation academy belongs to Ethiopian Airlines, and seems a world away from the unrest that on October 9th prompted the government to declare a national state of emergency. The firm’s CEO, Tewolde Gebremariam, brushes off the idea that the airline will be affected. “We are not concerned,” he shrugs.

He has reason to be confident about the business. Ethiopian is Africa’s largest and most profitable airline, earning more than its rivals on the continent combined. Its expansion has been rapid: by 2015 it served 82 international destinations, with 13 more added this year. According to unaudited figures, it nearly doubled its profits in the last financial year (see chart). And that is amid national turmoil.

It helps that its regional rivals are competing only feebly on routes in Africa. According to the International Air Transport Association, African carriers are likely collectively to record a net loss of $500m this year….Continue reading

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Turning the tables

All wood, few trees

WALK through the workshop of Vinayak Home, a furniture-making outfit based in the outskirts of Jodhpur in the state of Rajasthan in north-west India, and the results of globalisation are evident. Sleek hardwood furniture that would suit Scandinavian interiors is being readied for shipment; carpenters distress the paint on a newly-made chest of drawers to make it look as if it has come straight from a flea market in Brooklyn. But the company’s order book suggests that globalisation is fading. Vinayak Home is one of a cluster of Rajasthan furniture-makers that used to do nothing except export to Europe and America, but nearly all of what they make today they ship into Indian living rooms.

Jodhpur, on the edge of a desert with few trees to feed sawmills, is an unlikely woodworking hub. But when tourists came to survey the arid landscape and the 15th-century fort that overlooks the city, many also admired the hardwood carvings by skilled artisans (pictured). When India liberalised its economy in the early 1990s, a small group of European exporting agents encouraged independent furniture-makers. Then volumes…Continue reading

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Countdown

LIKE most technology tycoons, Elon Musk exudes disdain for finance. Convertible bonds and lease accounting are problems for Wall Street, while the visionaries in California focus on driverless cars and space travel. Yet while he might be loth to admit it, Mr Musk has become America’s most audacious corporate financier as well as its best-known entrepreneur. In just over a decade he has created an empire valued at a cool $44 billion despite its heavy losses (see chart). A blend of financial laboratory, corporate labyrinth and buttock-clenching thrill ride, Musk Inc has pushed the boundary of what was thought possible.

As has been the case for a decade, Mr Musk’s businesses face a difficult struggle to sustain their market valuations over the next 18 months, and to bolster confidence he is expected to unveil new financial measures and also new products over the next few weeks. Mr Musk has repeatedly defied the odds. But…Continue reading

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Channelling Trump

Hot property

AS HIS chances of making it to the White House have narrowed in recent weeks, another avenue has opened for Donald Trump. The notion that he might start his own media network has been the subject of speculation for months. Now industry executives are discussing the possibility in some detail.

In September the Republican candidate’s son-in-law, Jared Kushner, owner of the New York Observer, asked his friend Aryeh Bourkoff, a banker who has been a dealmaker in the media industry, for advice. (A source close to Mr Bourkoff said he personally had no interest in such a project). Mr Trump himself has denied any intention to start a network. But a look at the numbers suggests that Trump TV could be a success, media folk say—far from a juggernaut like Fox News, which has revenues of more than $2 billion a year, but lucrative nonetheless.

Such a product would have a good shot at going mainstream because Mr Trump could sell it directly to consumers over the internet, as a subscription streaming service. The Trump brand may now be too toxic for a publicly-owned media company to go…Continue reading

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