Finance Monthly October 2019 Edition

9 www.finance-monthly.com NEWS - MONTHLY ROUND-UP News you Can’t Afford to Miss GDP IS NO LONGER THE DEFINING MEASURE OF A POWERFUL COUNTRY New research has revealed that people are increasingly less willing to follow the mon- ey to big economic and ur- ban centres and are instead choosing to live, work and in- vest in places that give them better quality of life – and in turn the money is following them. Here Enshalla Ander- son, Chief Strategy Officer at FutureBrand North America, provides her thoughts on the changing economic land- scape. This recalibration of global economies and workforces has come to light in our latest Country Brand Index, which re-orders the World Bank’s top-ranking 75 countries (in terms of GDP) by how well they’re perceived against an alternative set of factors, such as value system, busi- ness potential, environmen- tal friendliness, culture and tourism. In the index, ‘quality of life’ was the attribute that aver- aged the highest in the top 10 countries, and averaged low- est in the bottom 10. In line with this are the findings that people are placing increas- ing importance on tolerance and environmental factors in the choices that they make about where they work, live, and visit. This is set to radi- cally change how countries and companies organize themselves to attract talent, tourism and investment. In the meantime, the so- called Fourth Industrial Rev- olution, defined by the arrival of substantial technological change, has transformed our day-to-day reality. Individuals now have more freedom to choose where they live and how they work, and they’re exercising that choice. The arrival of 5G marks a tipping point in all of this and as telco companies roll out 5G ser- vices, we’re likely to see a spreading out of the intellec- tual capital across the coun- try, instead of being isolated to the key economic hubs. Meanwhile, we’ve observed businesses with aspirations for global growth actively avoid expanding in the ex- pected international locations and instead set-up in rela- tively obscure or peripheral locations. They’re looking ahead and taking advantage of this diversifying workforce – tapping new talent, creating new opportunities for people who don’t want to live in the big cities and desire to work remotely, and benefitting from favourable tax rates and perks from regional govern- ments along the way. The groundswell of environ- mentalism is also fuelling this shifting balance of power. People are finally beginning to look beyond their house- hold and increasingly mak- ing more personal choices of scale and import based on environmental impact and concern. This often means prioritizing ways of living and working that are less harmful to the environment, and in turn better for people’s physi- cal and emotional wellbeing. It can also mean choosing an employer because of their stance on sustainability. By necessity, big corporates, and in turn governments, are having to prioritize facilitating this shift if they want to attract and retain the best talent. Most recently, New Zealand (ranked no.11 in the index) has been one of the major examples of the big rebal- ance in power that’s taking place. Prime Minister Jacin- da Ardern’s national budget balances goals that encour- age the well-being of citizens (such as tackling mental health, child poverty, inequal- ity and the environment) with traditional measures such as productivity and economic growth. Her rapid response to gun control following the Christchurch attack also as- serted a genuine and urgent focus on safety and wellbe- ing that has set a new prec- edent and benchmark for other governments around the world. There’s a growing opportu- nity for countries like New Zealand, and also smaller nations and cities, to com- pete with bigger counterparts who have more economic might than them on attributes like quality of life, tolerance and environmental concerts to attract greater tourism, trade and investment. It also serves as a warning sign for countries such as China, US and UK, who’ve scored lower in some or all of these crucial measurements, that if they don’t follow suit they’ll have to rely on doubling-down on economic might and power, which citizens, tourists and investors alike are growing increasingly less attracted to as a sole measure of country strength. ALISON ROSE CONFIRMED AS THE FIRST WOMAN TO LEAD ONE OF THE UK’S TOP BANKS Alison Rose will become the first woman to lead one of the UK’s top banks - the Royal Bank of Scotland. Her appointment makes the Royal Bank of Scotland the only FTSE100 company to have women in both its top two executive positions as Katie Murray, as of last year, is their Chief Financial Of- ficer. Alison’s appointment comes as new research into the benefits of having gender di- versity on boards has found that the insolvency rate is 49% higher for businesses with an all-male board than mixed boards. This isn’t the first time that financial rewards have been attrib- uted to greater diversity. Research by Morgan Stan- ley found that companies who took a more holistic approach towards gender diversity outperformed their less diverse peers by 2.8% per annum over the past eight years. Additionally, statistics by McKinsey found that companies in the top quartile for racial and eth- nic diversity are 35% more likely to have financial re- turns above their respective national industry medians. Given these statistics and the breadth of evidence that supports the relationship between increased diversity at board level and business success, Equality Group Founder, Hephzi Pemberton - Founder of Equality Group - is of the following opinion: ‘Diversity and equal oppor- tunities are no longer buz- zwords or optional extras in the workplace: employers can’t afford to ignore them because they affect the bot- tom line. It is great that the Royal Bank of Scotland is setting a precedent for all other institutions as to the value of their female staff and their contribution to the sector. Study after study has shown that diverse teams improve financial results with the higher the percent- age of women in manage- ment positions, the greater the returns. This is because more diverse companies can attract, develop and retain a broader talent pool and because of this, are able to serve niche markets with a better understanding of their customers. It also allows companies to tailor their approach to every fac- et of society, improves their image, staff satisfaction and net income. Ultimately, di- verse businesses do better and all companies should strive for diversity, not sim- ply to meet implemented tar- gets, but to reap the rewards that increased diversity will enable.’