Idea's space

In our society where economy is an important component creating wealth, I often heard critics about the non-profit organizations and associations. People are wondering if the subsides these organizations are receiving are correctly used. In other words, people are wondering if the institutions which do not create economical wealth, are not a charge for the society, and if there are useful. It is of course a pertinent question and people have the right to know how the taxes there are paying are used. People have the feeling that the taxes they are paying are not correctly used, but does it mean that non-profit activities are useless for the society? It should be a quick and wrong conclusion.

Non-profit organizations and associations, in different sectors, cultural or social are playing an important role in the society. We can see different interesting aspects of this sector of activity, but there are also conditions that need to be filled and which are filled in a lot of cases, making that people can have the feeling that their money is correctly used. What are these conditions?

• Selection of project and the benefit they will produce: there are several needs to be covered in the society, needs that the private sector is not covering because there is no link with their activity and because the final goal is not the profitability. A detailed presentation and activity plan, and determined goals need to be presented in order to see what are the positive effects on economical, social and local level. The allocation of subsides need to be voted by a committee including independent members.

• Project management and competences: non-profit organizations and associations are non-profit enterprises. It means that they have to face several challenges and issues on financial, legal and organizational level. In order to reach the goals on an efficient way with the allocated funds, some skills and competences are needed. As investing time myself in non-profit associations, I often see some lacks in term of competences, which has a negative impact in term of sustainability.

• Concrete results: The associations launching projects have to produce concrete results, to justify the allocated amounts. They have the obligation to show the return on invested amounts, not on an economical point of view, but on social, educational, environmental level, depending of the scope of the project.

• Financial sustainability: The allocated funds have to be spent correctly and each association has to implement controlling process in order to maintain the finance in break even. By creating debts and not paying contractors or employees, you do not reach the social goal of such organization. This is in my mind the weakness of some associations. The goal of a non-profit organization is not to make profit, as the name is saying, but it does not mean that the financial management is useless. I often see projects failure due to lack of management, with negative consequences.

These are some conditions needed to ensure that subsides are usefully allocated to projects. The quality of a project can be measured by the provided benefits. These benefits can be found on different levels, and make that non-profit activities are complementary of the economy. What are the benefits?

• A positive contribution for the society: the associations are covering a range of services to the society, services not ensured by the private sector. It goes from social or medical services for aged people, for people facing temporary difficulties, also services in the education giving an access to knowledge and culture for everybody.

• Local employment: this sector is creating local employment. Employment is a important key of social integration.

• Local economical benefits: these associations are using local services. There are in fact a vector of wealth redistribution, as the allocated subsides have to be spent. The money they are receiving do not remain blocked and sleeping on bank accounts. It has a positive impact on local economy.

• Personal positive effects: Some non-profit organization and associations are working with volunteers. Some studies show that people having a volunteer activity are in a better psychological and physical health. As mentioned, age is a question of mind. It is not because you reach a certain age that you are unable to contribute to a project, that you are unable to have activities. The fact to contribute to the community, empower the feeling to be useful and the feeling of social integration. We can see also a positive effect and cost reduction for the social security. If people are going well, they need less medical services. Globally, and as already mentioned in other postings on this blog, people need to have a project, to face challenges. The gained successes are an important factor of self- trust and wellness. Such activities have to be recognized, and encouraged. People should be encouraged to do an activity with the rhythm it agreed to them.

• Social and educational benefits for the community: some social activities, related to education, are contributing positively to a better social and public environment. For instance, structures taking care of the children during holidays or when they are coming back from school and when the parents are still at work. These structures where animators are helping them to do the schoolwork, or by organizing games or activities, avoid these children to stay in the street, abandoned to the boredom, and avoid them to go to delinquency.

By mentioning these points, I tried to show that non-profit organizations and associations have a positive function in the society, on social and economical level. They have to be seen as a complementary activity of the economical activity. Do not forget that the economy is providing taxable wealth and that of course, without a strong economical activity, the public and associative world can not work. It is a question of balance, where each actor has to play the game, by respecting rules and with transparency, where initiatives have to be encouraged and supported.

Dominique Strauss-Kahn, director of the IMF

At the opening of the International Forum for Human Development in Agadir (Morocco), Dominique Strauss Kahn, the director of the International Monetary Fund, said that the financial and economical crisis destroyed around 30 millions jobs around the world. He said that in a perspective of a new globalization, the first priority should be the employment.

By reading these figures about employment, could we say that the economical and financial crisis is over, beside the fact that the company results are better than in 2009, and that the stock exchange markets recovered more or less their level from before the crisis? It should be premature to take such conclusions.

I was reading an article about the crisis effects in the United States of America, where there are now the mid-term elections, and where the consequences of the crisis on job market are a real issue for Barack Obama re-election. The particularity of the United States, and also of the United Kingdom, is that people are deeply indebted, and the level of unemployment remains high. People are facing real problem to reimburse their loans and credit card invoices. The risk of personal bankruptcy remains high, and as consequences, the financial system remains fragile. Within these two conditions, it is difficult to re-start the sustainable economical growth. And we have not to forget that main countries are facing to a high public debt, after their monetary intervention to save banks from bankruptcy. To try to restart the economical growth on a sustainable way, by allowing people to contract new debts should not be a good idea. Such strategy would be a risk to weaken the financial system, with the risk that the states could not intervene a second time to rescue the banks.

It does not surprise anybody to see that millions of jobs were lost in these particular exceptional economical circumstances. Companies were obliged to take restructuring measures in order to preserve their profitability. We heard at that time, companies which did not want to take the risk and were unable to make some forecasts in such misty circumstances. But since many years, we can see companies cutting jobs in order to maximize their profits and to give more return to the investors. Is it a sustainable logic?

If you want to create economical growth, it implies that people needs to have revenues in order to contract produced goods and services. Main of the people earn revenues from their work. A company hiring people to produce goods or services, is paying a salary to the employees, and so, is creating a wealth re-distribution mechanism. A company can only be profitable, if people can pay the price of the produced goods or services. This equation is easy to understand. These last years, the maximization of short-term financial profits was the main objective of investors and not a sustainable economical development. The financial and economical crisis induced significant value impairments, and in some case, a negative return on investments.

Here, we can see the major difference between economical growth and economical development. It is not forbidden to think that if companies were more focused on human capital and know-how than on financial profits, they would have probably lost a few percent of profit, but they would have contributed to maintain a purchasing power level for the people, and by consequences, ensure future revenues. They could also preserve the know-how of the company. With the development of the new technologies, each people is playing a key role in the companies, and the replacement of such profiles represents a cost for the company. But this logic is not followed by some investors, more focused on personal interests than common interests. And these speculative logical is a break for the business development. Today, companies are facing difficulties to develop their business, because they can not find credits to finance their development.

In a sustainable economical development model, you are not only focused on profitability, but you are focused on a range of key factors: business development, finance management, marketing, human capital management. As in many projects, it is fundamental to determine what is the real goal. In a sustainable economical model, the goal should be the wellness of the people and the business sustainability, which implies a long term view.

BP's oil spill, an ecological disaster.

The United States of America are facing the worst ecological disaster since more than a month with the BP’s offshore platform accident. The flow was already categorized as the largest offshore oil spill in the American nation’s history, but the new figures are much higher than the previous estimates. President Barack Obama pronounced a speech, saying it is time to develop the field of new and renewable energies, cleaner for the environment.

But the question is to know if there is really a will to develop such energy field? There is a debate and different mind regarding oil reserves. The extraction of oil becomes more complicated as we have to extract it deeper. The development of more sophisticated extraction techniques shows that we are able to find new oil reserves. But this has a cost, not only on an operational level but also on the ecological level. Money is spend to develop more sophisticated extraction techniques, but have we the full control of the process in case of accident, and are the safety measures always followed? The present situation in the Mexican gulf seems to show it is not the case. As often, companies are focused on short-term profit, forgetting the risk management. Oil generates appreciable profits, but in the Gulf oil spill, the ecological and economical cost is probably much higher for the country, compared to the generated profits on the same period. The balance of such disaster is clearly negative, as the estimated cost amounts to 1 billion usd. This oil spill will have short and long term effects on an economical and ecological point of view.

I would like to make the following comment. Often, ecology and economy are considered as two distinct things, incompatible and with no links between. This is a wrong point of view. Each natural and ecological disaster generates re-construction costs and no added value. In the case of the gulf oil spill, it would have been more interesting to spend the lost money to the development of renewable energy technologies. Research and innovation are an economical motor. The development of sustainable and renewable energies resources provides long terms economical and ecological benefits.

In order to develop a sustainable economy, it is important to analyze the benefits and the risk of each choice, each alternative, but we have also to distinct the difference between growth and development. Let us take an easy example: the growth of the pharmaceutical industry in a country is a good deal for the economical statistics, but it means that the consumption of medicine is increasing, which means that people are not in good health. This is not a really positive situation. On the other side, if the building industry growth is increasing because you build new schools and empowered the education system, this growth contributes to development with future long term economical and social benefits.

Development is the key of sustainable growth. Each crisis we met is destroying values, and the time and energy we spent to recover the lost value, to be again on the start point is a pure waste. A growth based on sustainable value contributes to a long term development, where each step contributes to the next one. It means also that in a development process, each component needs to be taken into account, not only the economical side, but also the social and environmental components, and all these components need to be integrated on a long term view.

During the month of February, the Belgian government published the “green book”, including conclusions about the payment of retirement pension, the challenge for the coming years. The conclusions were not a surprise, but only what everybody already knew, conclusions already done by economists and demographers. The government and some political people begin to admit that if people want to get a decent pension later, they have to save money. The problem of pension payment is due to the pyramid of ages. Indeed, the percentage of retired people is increasing. It means that the weight of pension costs on shoulders of active people will be more important.

An announced conclusion of the study was that people should work 3 years more than the average. It does not mean that the legal pension age would not be 65 years but 68 years. We have to know that in Belgium, only one person over ten who are between 55 and 60 years old is still working. We are one of the European countries where the activity rate of this generation is the lowest.  How to explain such fact? In Belgium the tax level on work is very high. For somebody who spent few years or his full career in the same company, the lay off indemnities are very high. Of course, each employee agrees to have the maximum of indemnities, but should not be better to have less indemnity but to work for a longer time?

In Belgium as in every country, there were several restructuring processes in large companies, creating social disasters. It is always a painful hardship, where people are wondering how they will pay the bills at the end of the month. Most of them, who were more than fifty five years old, were retired anticipatively. By hearing some politicians, I have the feeling they were considering this as a gift, the fact that people who were wrongfully fired, merit to be retired anticipatively. Does it mean that everybody is necessarily happy to stop working when he is fifty five years old? Does it not mean that you are considered as too old, and then useless? Some studies showed that people who were retired anticipatively, by their own or by force, have a lower quality of live after few years. So to be retired anticipatively is not precisely a gift.

It is of course more difficult for people with lower qualifications to find a job when they have a certain age. But on the other side, with such view I explained before, the qualities and knowledge acquired by experience are not valued at all. In a previous posting, I was talking about the employability, meaning that each worker needs to gain in knowledge and expertise in order to move with the environment changes, to acquire tools and develop capabilities in order to face new challenges. The combination of experience and trainings provides added value and know how for each worker and as consequence for the company too.

It has to be remembered that the education is also important, that everybody needs to have enough chances to start in the active life. There is a lot improvement to be done on that level, when we are noting that in a city like Brussels, capital of Europe, there is around 20 percent of workless people, and for young people who are between 15 and 24 years old count around 35 percent of workless people.

Work is a right, and the government should take initiative in order to give chances to everybody to get dignity to have a job, by empowering the education, by promoting entrepreneurship, by encouraging social and economical initiatives. Work is the way to ensure independence to everybody. It is only on this base that we can maintain a sustainable social system.

Work is a right, and should be more considered as this and not as a constraint. It is a constraint if you do not like what you do, or if you are not considered for what you are doing. Confucius said: “Choose a work you like, and you will never have to work a day in your life.”

Picture source: http://www.summersdale.com/images

The fall of Lehman Brothers on 15th of september 2008

Most of you probably know through the media the solvability problems some countries are facing, like Greece. And some speculators are finding an opportunity to make money by creating additional problems in an already difficult environment. And Greece is not the only country facing to budget deficit. Let us remember that with the financial crisis and the uncontrolled risks taken by some banks, a lot of countries over the world have to make actions by funds injections, in order to save then and to save the money of their customers. The consequence is that the private debts of the banks became public debts, it means a charge for each citizen.

This subject was discussed by the finance ministers of the G7, but until now, it is the status quo! And it seems that the game of speculation and risky investments started again. The problem is that in such games, like in most of games, they are winners and losers. But what is unacceptable is that the losers are not part of the game, I mean the people who will have to support the increase of the national debt and who will suffer of the consequences of budget deficits. For who is the crime profitable?

I can notice that today, in such context, there is a confusion between the speculators and the entrepreneurs. The financial and economical world is considered in a negative way. In this difficult time, it is not a good thing, as we absolutely need the creation of companies and activities in order to compensate the jobs losses. In order to maintain a social environment, we need to have a strong economy where everybody can play a role and live with dignity. But to have a strong economy, we need entrepreneurs with innovative projects and activities, and the essential tools, financing sources, to develop such projects and activities.

By meeting recently some entrepreneurs, there were mentioning to me the financing problems they were facing. They were wondering how to find financing sources and partners without dealing with sharks? The traditional banks are not enthusiastic to finance such projects, because they have not enough return on investment on it. But how could we explain and understand that they are investing in more lucrative investments but much more risky too? The explanation could be the following:  if things go wrong again for the banks, they count to the government to make new capital injections. But with the debts the governments contracted to save banks, will their still have the capacities to perform another capital injection? And what could be the economical, social and political consequences of such new intervention?

Is the human being able to learn from his mistakes? Yes, he is, but on another way, he thinks that things are linear, that he can always have control on things, and that there will be always a solution to solve a problem without too much consequence, that he can always escape to critical situations and not be concerned by then. That is what was probably thinking a certain..Bernard Madoff !

Picture source: http://www.etftrends.com

Thomas Leysen, president of the FEB (Fédération des Entreprises de Belgique)

End of January, the Belgian employer’s organizations were shouting of alarm, by setting up a petition named “Let us Start up”. As most of countries, Belgium did not escape to the financial and economical crisis. But this initiative was launched after the announcement of General Motors restructuring plan in her European subsidiary Opel. It means the closing of the Antwerp factory with 2300 axed direct jobs and negative economical consequences for the country.  Belgium is a country where the production of cars was important, and this sector was providing a lot of jobs. But since many years, the jobs in the automotive sector are decreasing after several restructuring and delocalization plans.

But automotive is not the only sector where the number of jobs in the big companies is decreasing. The Belgian economy, as it is the case in other countries, is in a transformation process. But some statistics are showing that Belgium is one of the European countries where the creation of companies is the lowest. In such economical circumstances, some leaders are thinking that it is time now to do something in order to reverse this negative trend.

Why have we reached such situation? There are few elements to explain this. It is important to understand that the economical picture of the two regions of the country is not the same. In the south of country, there was a huge presence of steel industry and coalmine. In the year seventies, these industries declined, and the number of unemployed people increased constantly. Some economist are saying that the mistake of the authorities is that they invest a lot in social measure, which is good on a short term basis, but not enough in economical measure in order to boost the economy. In the north of the country, the industry was most diversified, but since few years, the trend of the economy begins to be the same, with the restructuring of the automotive industry.

The petition launched by the employers organizations intend to make people sensitive to the fact we need to create incentives for people who want to create their own business. One of the major obstacles is a high tax level. Regarding that point, everybody does not share the same point of view.  We have to know that the applicable tax rate for companies amounted to 34%. This is the theoretical tax rate. But some measures were voted by the government some years ago, in order to attract some investors and companies from foreign countries. One of these measures, which are discussed presently, is the “notional interests”. These notional interests are deductible from the taxable income, and are calculated on the equity of the companies. The goal of such measure was to reduce the tax charge, and on the other side, to encourage companies to create jobs with the realized savings. But in fact, a lot of big companies realized tax and charges savings, but never created new jobs. The unions want to suppress such measures as the initial goal of these was not respected.

The problem is that the suppression of such measures represents a difficulty for the small and medium sized companies which have less equity and have to face bigger difficulties to finance their growth and to develop new channels of products. For such companies, which are taxed with a theoretical rate amounted to 34%, the effective rate is sometimes higher than the theoretical rate, after excluding the non deductible expenses from the taxable basis. By suppressing the notional interests for these companies, the effects will be the opposites of the expected and needed ones.

What I explained here is about the income tax. But we have to speak also about the employee’s taxation. When a people receive 50 Euros as net salary, it cost around 135 Euros to the company. This amount does not include the possible redundancy indemnities. The social securities expenses are heavy.

By explaining these different points, I want to explain that the conditions to create companies in Belgium are not optimum. And these last years, the government invests a lot of money in different employment plans in order to create jobs for unskilled workers, which is a good point, but these jobs are precarious. The government should invest first in the education, in order to revalue professions which for we are missing qualified workers, mainly in the sector of construction.  They should also invest in the universities in order to sustain the research and development which are the pillars of new economical developments. By developing our economy with small and medium companies, we can ensure a sustainable social system where everybody could act following his expectation. We have to encourage people to do what they want to do, and not only to look after job security. But to encourage people to create their own business, we need to give them real incentives. It is important to have public infrastructures and an efficient administration, but a strong social system could only be financed by a strong economy.

It is for sure that everybody can not create a company. Each of us, we have different capacities, our strengths and our weaknesses. There are people who could become entrepreneurs, other who will become brilliant scientists, efficient state employees, but I am convinced that there are a lot of people who do not use their potential and who ignores the talents they could have. Most of the time, it is because the prevailing attitude does not incite to use their potential. If you tell somebody he is stupid during all his life, he will be stupid.

What we need today, is people who wants to start up, with the sense of ethics. To start up is a way to conquer our freedom, and we do not have to be afraid of our freedom. But the authorities have to give us that freedom. So, …..Let us start up!

Petition website: http://www.laisseznousentreprendre.be/ -  http://www.laatonsondernemen.be/

Group on LinkedIn: http://www.linkedin.com/groups?gid=2694300&trk=anetsrch_name&goback=%2Egdr_1265061522642_1

Unemployed people

This week, listening to the news of the French Belgian radio (RTBF), I heard a new about a pessimistic forecast about the unemployment in Belgium for 2010. Following a study led by Philippe Defeyt, economist and member of the board of directors of the IDR – Institut pour un développement durable (Sustainable development institute), the unemployment rate in Belgium should reach a historical level in 2010 compare to 1970, with a rate of 14,6% of the working population, representing a number of 750.000 unemployed people.

The IDR analyzed few macroeconomics variables from 1970 until now. If the number of jobs increased of 17% compared to 1970, the total number of working hours done by this working power is lower compare to the number in 1970 (less 5% in 2010 compare to 1970). During 31 years, the working population increased of 1,3 million of people, but the available jobs increased only of 650.000 units, it means only the mid of what should be necessary to give a job to everybody.

These are few elements included in the study. But what was amazing, is the reaction of the minister of employment, Joëlle Milquet about the figures related to the unemployment forecast. She told that these figures were totally overestimated, giving a worse picture of the situation. Really ?

Here is the question about the definition of an unemployed people. Following the minister of employment, the definition of unemployed people includes the workless people looking for a new job. It means that the unemployed people who are 58 -60 years but not looking for a job because considered as too old, are not taken into account.  Following Philippe Defeyt, the two categories are included in the statistics, as they are facing the same problems when they are looking to their bank account at the end of the month.

It is a bit difficult to understand why a category of unemployed people are not taken into account by the statistics of the government, when such government includes political parties defending social values, and when they are claiming to develop social politics to decrease the poverty. Belgian is one of the countries where the rate of unemployed 50-60 years old people is the lowest. It is totally senseless to ignore such people from official statistics.

By reading this, I remember my studies, where one of my professor of statistics defining statistics as ‘the Best way to lie”.

Institut pour un développement durable – http://www.iddweb.eu

 (Picture source : http://www.onlineforextrading.com/blog/wp-content/uploads/2009/02/html-for-food-292×300.jpg)

Silicon Valley, land of innovation

In my previous posting, I was talking about the social economy as an alternative. Of course, to face such complex problem, there is not only one solution, but different ways of alternatives. If I am coming back to this subject, it is because when some indicators are showing that the recession seems to be over, other consequences of the economical crisis are still there, to prompt us to stay moderately optimistic ….or pessimistic. That is what we could see in the news these last days.

Few days ago, there were around seven hundred people losing their job in the Brussels region. A major media distributor felt in bankruptcy and around four hundred people will lose their job. Another pharmaceutical group announced a new restructuring process, by cutting one hundred and seventy jobs. A press group, facing to a decrease of advertising revenues announced also a job cutting of seventy six employees. These tree companies were obliged to axe jobs for different reasons. There are circumstances where we have no choice to cut jobs in order to ensure the company continuity.

Regarding this problematic, I would like to talk about the axed jobs as consequences of merging and acquisitions processes. We can hear very often companies explaining that they acquired other companies or merged with other companies because there are synergies and complementarities between activities. In my mind it should mean that the combination of different activities should provide new opportunities and generate more revenues. It makes sense for small companies who have similar or complementary activities but which can not reach a critical size in their market. But for bigger companies, like international groups, it appears that most of the time, the purpose of such operation is often a financial goal. Most of the time, after such operations, it follows a restructuring wave and a lot of jobs are axed. As already mentioned in other postings, how can this economy survive, when the principle seems to be “do more with less people”? If people are losing their purchasing power, how can we sustain a growing economy? Are merges and acquisitions always necessary to ensure a business? Some years ago, a Belgian fashion designer, Olivier Strelli decided to expand his activities in Japan. After some problems of unfair concurrency and piracy, he decided to stop his activities in this country. Finally, such decisions did not have a negative impact on his business.

It is not forbidden to believe that our economy needs to move to a SME economy, where there is more flexibility in terms of organization, in term of creativity and innovation. I was reading recently in a book written by Philippe Buschini (*) about Personal Branding, a sentence of Nathan Rosenberg saying that “The innovation appears often outside of the existing organizations, partly because the winning organizations are staying in the status quo and are resisting to the ideas which could affect then”. A lot of new high valued activities were created by start up companies, with high potential of development. Let us think for example to the IT industry.

But the interesting point is that in the actual environment, where things becomes more and more complex, these small companies needs to get high value advices and services but on a temporary or part time basis. This could be a real opportunity for other companies and people, to create not only commercial and technical relations, but real business partnerships. This kind of services are already existing, with the field of interim management or project consulting, but we could also consider that people could become partners in several companies, and participate of the development processes for each of then. People would work as freelance, which is still seen as more risky than an employee position, but the advantage could be to gain more experiences by working on different projects and in this way, to ensure their employability.

By thinking about this, it seems that the story is a process of constant renewal. Some small companies grew, became giants and then disappeared. It could be that finally, small could be still beautiful.

(*) Philippe Buschini website: http://www.buschini.com/

Picture from http://www.flickr.com/photos/explorer/112761636

In Gironde, consumers are financing the installations of a "bio" market gardner for a local direct sale.

Today, the social economy seems to gain interests. The main principle of this concept is to create an economical model showing more solidarity. When I read these words, I am wondering if we are not busy to re-invent what should be the ideal model?

If you think about the economy, it has to be to the service of the people, and not the opposite. By mentionning this, it implies that the economy has a social dimension…or should have it.  But today, the concerns are more to maximize the profit of the companies in order to create value for the shareholders. But for how many time? In these particular difficult times, people lost their jobs. Sometimes, it was the only solution in order to maintain the continuity of economical activity. But we can see also in many countries, increasing difference between higher and lower salaries. When some people could not spend the money they are earning during all their live, other people try to survive.

Do not forget that some people have high responsibilities and need to be paid for. But until which salary level does it still make cense? When I remember by the past, some salaries and bonuses earned by some directors of companies which did not show exceptional performances or falling in bankruptcy, I see that more as an incompetence premium. Everybody would be ready to miss a target of to fail a project and receive a salary or bonus which allows you to have a comfortable live. Where is the risk?

By reducing the lower salaries, how can we ensure an economical growing, if people can not pay for goods or services? By contracting debts? That is what  happened these last years, and created the financial crisis.

We can not create a social environment in an economical desert, but we can not also develop a sustainable economy without a sustainable social model.

Today, it seems we are trying to find new technical solutions in order to re-start the economy, while it is much more a mentality change which needs to happen. Let us take the example of the automotive industry. Today, in order to save this industry and to boost the car sales, many countries are giving allowance to people buying a “green” car. When we know that the automotive industry is in overcapacity since few years and that this industry is producing more with less people than before, this kind of measure will only produce short term effect, but fundamentally will not solve the problem.

In a sustainable economy model, the profit should only ensure the continuity of the company, giving the capability to finance new projects development. The profit is one of the components, the human resource is another. Maintain the number and the quality of the jobs contributes to maintain the know-how of your company. And this know-how is increasing everyday as long as same people are staying in the company. People should not be considered as employee, but as partners of the company. Reduce the people turnover contributes also to reduce recruitment fees and avoid to lose productivity.

To preserve the environment contributes also to a more social environment and develop a sustainable economy. By producing less and recycling more, by developing new activity fields respecting environment, we can develop a social economy giving opportunities to lower qualified people, to contribute to a high valued environmental project. We can already see such programs, gaining successful results.

Personally, I believe that a social economy is possible. It implies innovation and creativity. Creativity does not mean only to invent new things, but also to do things, to think on another way. But such transformation is possible if it is driven by the common good. It is just a question of will and intellectual honesty, to move to a society where people do not exist only by using a credit card.

General Motors assembly line

These times, we are hearing that the economical recession is finished and everybody seems to be happy to see the business restarting….as usual ! I have no habit to be pessimistic. It is a fact that in such time, it is better to have a positive mind in order to start new challenges and to influence positively the market. But for all the people who lost their jobs and who have difficulties to pay their bills at month end, to feed their children, to pay medical costs, the recession is not finished at all.

One of the major activity sectors which was hit by the economical crisis is the automotive industry. With the GM bankruptcy, we saw the American government trying to find solutions in order to save the company and in order to limit the social disaster of such bankruptcy. Other governments in Europe, like Germany and Belgium, are ready too to bring some financial helps to Opel. Nevertheless, is it a good idea to invest so much money in a industry where there is an overproduction of 35% ? If there is overproduction, it means in this case that there is too much player in this industry segment. Should not be interesting to invest in industrial segments which present good potential for the future, like renewable energies?

The problem is that governments have to face to a dilemma. They have to struggle with budget deficit. In order to limit the social expenses, and to find a short term solution, they are intervening financially in order to sustain some industries, like automotive industry. But by investing in some industries having structural problems, they are reducing their capacity to invest and to sustain long term projects developments.

How did we come to such situation?

We can observe that when some government find important source of revenue, they do not think for how much time this source will make earning money. Let us take an example related to the automotive sector. For instance, in Belgium, around 50% of cars are company cars. Company cars are given to employees as a less taxable benefit than an equivalent gross salary complement. These leased cars are important sources of revenues for the government, and the gas used by these cars too. Nevertheless, they have three major problems related to this. First, it is a fact it will be more and more difficult to extract petroleum, as a result of which, the price will increase progressively. It will represent a cost increase for companies, and will affect they results. The companies will have to replace such benefit by another. But if the number of company cars is decreasing, how the government will compensate the revenues decrease? The second problem is the one of mobility as in many cities and countries. The traffic jams are constantly increasing, and it represents also a cost for companies. Do not forget the third problem of  the environment. We are consuming more petroleum than the earth produces, and there is a negative impact with CO2 rejections.

It seems that governments have short term views, and as far as they find some important source of revenues, they have the feeling that it will be forever. Now, it becomes more complicated to finance long term project developments, when you have even not enough money to close your annual budget.

This remembers us that when the problem appears, sometimes, it is already too late. We have not only to consider things as definitively acquired, and not only to think about tomorrow, but also the day after tomorrow.

(Picture source: www.e24.fr)