<![CDATA[Business]]> <![CDATA[Apple’s egg-freezing plan is simply a way of telling women to be more like men]]> Why would a healthy young woman want to have her eggs frozen? There may be several reasons and, as those are her eggs, it’s none of my business. But why would it be her employer’s business? When I read of the employee egg freezing schemes of Apple and Facebook, that’s the thing I can’t understand.

Or rather, I can but I wish I didn’t. Employers want female employees to function in the same way as male ones. They don’t want them to mess things up by getting pregnant. They’d rather give women the false hope that, years down the line, those frozen eggs might yet produce the child who would have “ruined” things back in the day. Employers want to give women choice but not the choice that comes from living in a world which doesn’t see your failure to be male as an inconvenience.

You can argue that this is about work and reproduction, and partly that’s true, but it’s also about how women are valued. To even approach the worth of men, we’re always in need of some intervention or other.

In The Beauty Myth Naomi Wolf argued that the cosmetic surgery industry grew “by manipulating ideas of health and sickness”:

Women have long been defined as sick as a means of subjecting them to social control. […]The surgical industry has taken over for its own profit motives the ancient medical attitude […] which defines normal, healthy female physiology, drives, and desires as pathological.

With egg freezing schemes, this pathologisation of femaleness itself is being extended into the realm of reproduction. We are dealing with a problem which – in the case of the standard Apple employee’s predicament as opposed to medically defined infertility – is socially constructed, yet the solution is seen to lie in operating on the female body rather than critiquing the society that ignores this body’s lived experience and needs.

Apple’s egg freezing plan doesn’t just tell us about the lengths employers will go to in order avoid treating employees as diverse human beings. It can be placed within the wider context of female bodies routinely being positioned weak and inadequate. Women might find life under patriarchy wanting but patriarchy simply tells us “it’s not me, it’s you”. We’re meant to believe the female body has been tried and found wanting. Need to be treated as a person? Sorry, but you just aren’t built for it. We’re not acceptable as we are and thus an endless succession of “treatments” seems the only option.

We experience physical growth and sexual development as something to be feared, keeping ourselves in check with “health kicks” and “detoxes”.  We experience our reproductive capacities as an intrusion; there’s never enough time and it’s never the right time, so we submit to extreme interventions rather than asking for structural change. We think of ageing as something shameful, a disease to be treated with botox, magic serums and the surgeon’s knife. Even when our bodies and minds could be called healthy, still we remain patients, undergoing therapy for the sickness that is not having been born male.   

Long before she has started to look for grey hairs and wrinkles, before she has even hit puberty, a girl knows that her eyes are too small and need lining in kohl, and that her stomach is too large and needs holding in, and that no hair must ever be known to grow beneath her armpits or on her chin and upper lip. Visit Boots and Superdrug and you will see that most of the shelves are lined, not with treatments for headaches or flu, but with products to deal with the inadequacies of the female form: crash diets, hair removal for bodies, hair dye for scalps, make-up, anti-ageing lotions, face masks, special washes to disguise the smell of your own genitals. Some of these things will even be named and packaged as though they are medical products: Prescriptives, BlissLabs, Dr Ceuticals, Skin Doctors, DERMAdoctor, Remedy Serum.

Buying these treatments, you know the objective is to convince people that you have been “cured”. You’re someone whose armpits never sprout hair, whose vulva never smelled, whose skin never creased and whose hair colour never faded. The expectations become so normalised you can start to believe that most other women are naturally like this; it’s only failures like you who need to the extra support. It becomes shaming. We might discuss whether botox is really necessary or whether a Hollywood is perhaps a step too far beyond a Brazilian, but female facial hair? Shhh! You’re the only one! God forbid that we ever accept this as just what some female faces are like.

And gods forbid that we accept that for some women, having babies in their teens, or their twenties, or their thirties, or their forties ought to be just fine. We’re meant to accept the lie that both inside and out the female body is not performing as it is meant to. We’re taught that male bodies “fit” whereas female bodies get in the way. Yet having and making use of a female reproductive system should not be incompatible with getting an education, earning money or being socially integrated. It should not be incompatible with independence; the unspoken requirement that all mothers either depend on a male partner or suffer financial deprivation is inhumane.

We are forced into a situation where we all have to pretend that so-called family planning is in our control. If you mess up, sorry, that’s just biology. Should’ve got on with that egg freezing. But how can we make the right choices when we’re working within a structure that positions male bodies and male reproductive capacities as the norm? There’s nothing wrong with women, nothing at all. We’re human beings, too. If the world is only recognising the embodied reality of half the human race, then we don’t just have the capacity to change this – it’s our moral obligation to do so.  

In 1970’s The Dialectic of Sex, Shulamith Firestone argued that “though the sex class system may have originated in fundamental biological conditions, this does not guarantee once the biological basis of their oppression has been swept away that women and children will be freed”:

On the contrary, the new technology, especially fertility control, may be used against them to reinforce the entrenched system of exploitation.

44 years later, I can’t help thinking that there is some truth in this. Biology is not, in and of itself, our problem. We’re fine, we women. It’s the perception that we’re not that we have to challenge. I don’t want parts of us needlessly frozen, whether it’s our frown lines or our eggs. I just want a world into which women’s bodies are permitted to fit.

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<![CDATA[Welcome to The Apprentice blog: series 10, episode 1]]> WARNING: This blog is for people watching The Apprentice. Contains spoilers!

It’s the 10th year of The Apprentice. And all through that sweaty, starchy, 110 per cent-executive-decision-making decade, it’s clear the producers have judged its loyal fans correctly. Hardly anything about the format has changed. “You’re tired!” will be the judgment of many snarky viewers as they switch over with a sigh to something more rewarding and less brimming with hollow pastiches of turgid Foxtons estate agents, but for those who love it regardless, there are 12 weeks ahead of pure, idiotic bliss.

The phrase “one hundred per cent” is heard after just nine minutes of watching the first episode, closely followed by “skill-set” at a competitive 17 minutes. “Dog-eat-dog” comes in at a disappointing 58 minutes, but we can forgive the programme makers, because everything else comfortingly follows exactly the premise of all previous series.

Except one thing.

That wicked grizzly business bear Alan Sugar has played a wildcard this year. We now have 20 candidates to mock and despair of, rather than 16 – so there could be more than one firing in each episode.

Dedicated viewers will have witnessed the gibbering drama of a double firing before, of course, but this new factor is intended to spice up the next 12 weeks of the 10th series. As if the show needs it, with the first episode hurtling head-on into classic Apprentice pathos with lines like, “There’s no ‘I’ in ‘team’, but there’s five in ‘individual brilliance’” and “I’m going to make a fundamental decision here – we’re going to the balloon shop.”

Meat and greet. Photo: BBC/The Apprentice

As with every opening episode of an Apprentice series, the men and women are separated into teams, welcomed into a lovely London townhouse where they will stay for the duration, woken up the next morning at 4am by a shrill telephone hurriedly answered by someone unconvincingly semi-clothed clearly with a pair of buffed brogues on out of shot, given 15 minutes to shriek playfully and deploy barbed teambuilding-related asides at each other, and then herded into power-taxis to somewhere gleaming in central London.

There’s a lot of gleaming going on in this episode. Every shot panning London is a series of the capital’s most glistening, vaguely phallic edifices, until the camera reluctantly lands on the Bridge Café ­– the losers’ suburban haunt, which gives away what everyone knows anyway: real business is executed in a hangar in West Acton.

This episode’s task is to do what is apparently “10 years of selling” – I think this is a nod to the sales tasks of the past decade on the Apprentice but I was too excited at this stage to be concentrating in one day.

But first, the girls and boys have to choose a project manager and a team name – a pair of tasks equal in their controversy and hilarity.

When Apprentice candidates choose team names, it’s a bit like watching a circle of intensely competitive apes in tailored suits playing Articulate. They just say words. Wrong words. With conviction. The boys go for “Summit”. “It’s never been done!” cries the man who came up with it. I didn’t note down his name, as I’m pretty sure he’s likely to be tumbling off the summit soon.

Then the girls seem to inadvertently invent the branding for a pre-crash Tory online dating site by going for “Decadence”. “Playing on the word ‘decade’”, says one, hopefully. In an unprecedented intervention, Lord Sugar tells them to come up with another name for the next episode.

This follows Nick Hewer – who spends the episode looking like a quiet voice in his head is asking him what he’s doing with his life and why he hasn’t found a mild, steady slot on Radio 4 to bed into until retirement – telling the girls “decadence” smacks of “decay, decline, moral turpitude and self-indulgence”. Surely an Apprentice hopeful’s ultimate pitch for appearing on the show, amiright?

Bitter lemons. Photo: BBC/The Apprentice

The boys’ team leader is Felipe – a former lawyer at a magic circle firm, hapless but well-meaning. It’s much worse for the girls, who opt for Sarah, who has depressingly offensive ideas about women in the workplace and chopping up citrus fruit for profit.

There follows a frenzy of suits scampering up and down the nonplussed markets of London, attempting to sell potatoes, spruce up sausages (some ill-conceived Planet Organic guacamole-purchasing occurs, pioneered by the candidate Robert who whacks out some sock-free business loafers and a boating blazer on day one), and print slogan t-shirts (“but ‘Positive Impact’ doesn’t mean anything to people!”).

The girls make a disastrous mistake by forgetting to send their sub-team (ie. group of side-lined and potentially mutinous women) off with the seed capital (ie. some cash) to the t-shirt printers. But the boys do one worse and leave their t-shirts at the printers altogether, throwing £500 away.

There is also a harrowing image, accompanied by the uniquely ominous minor chords reserved on this programme for inadequate entrepreneurs, of a solitary sponge the boys accidentally drop in the road. This doesn’t come up in the boardroom later but it still gave me chills. The girls, in contrast, inexplicably try to sell their sponges, a bucket and some toilet brushes for £250 to some hassled penguin minders at London Zoo.

Felipe’s team loses, but only by about £50. This leads to much soul-searching among the boys, with the perpetually outraged Stephen scapegoated for being a disruptive character. He’s the one who tries to sell spuds with the pitch: “It’s not going to be just a potato, it’s going to be an experience”, and is therefore inevitably saved from the boardroom, probably at the behest of some ratings-racked producers.

In the end, Chiles – the sub-team leader who left the t-shirts behind – is given Lord Sugar’s pointy finger of doom. It was a close one though, with Robert nearly getting the chop for his “arty farty” ideas about dressing up frankfurters. But he was saved too, probably because of the endless material Lord Sugar’s incessant iteration of the word “hotdog” is sure to provide Cassetteboy.

Chiles (right) is the first to be sacrificed on the altar of show-business. Photo: BBC/The Apprentice

The girls, in turn, got to spend half an hour slowly rotating in a claustrophobic pod full of 20 strangers who hate one another, as a treat for winning. Yes, Sir Al in characteristic munificence had “laid on” the London Eye’s VIP capsule for them.

With just the right cocktail of the obnoxious and talentless, and a frantic, meaningless task for them to attempt, this first episode is a reassuringly ridiculous sign of things to come. Let’s just thank Lord Sugar, poor old Nick and top TV Tory Karren Brady for laying on another series for us.

 

Candidates to watch:

Stephen

“If we went to Mars right now, I’d find a way to be excellent”.

He’s an “irritant”, according to Lord Sugar, who saved him. He was also rather unfairly scapegoated by his team. He’s sure to provide further drama, and perhaps even more florid pitches than his potato plea, in weeks to come.

Sarah

She can, inevitably, sell “ice to an eskimo”.

The girls didn’t like her leadership, possibly because she kept telling them to put make-up on and hike their skirts up for the sales task, but she’s likely to cling on for a while because of the morbid fascination factor.

Scott

Who?

 

I'll be blogging The Apprentice each week. Click here to follow it. The next episode is tomorrow evening, so check back on Thursday morning for the next instalment.

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<![CDATA[Female professionals earn 35% less than male colleagues]]> Senior female managers earn 35 per cent less than their male counterparts, according to new figures. Women are now hit hardest by the gender pay gap in the second half of their careers.

Female professionals would have to work until they were almost 80 - that is, 14 extra years - in order to equal the lifetime earnings of a male equivalent in the same role.

The current gender pay gap stands at £9,069, according to the data, but the chasm widens between older men and women.

A mid-life pay crisis has emerged for professionals aged between 46 and 60, where the gender pay gap is at its widest at £16,680.

The gender pay gap is narrower, but still significant, for younger and more junior women, standing at 6 per cent for 20 to 25 year olds, and 8 per cent for 26 to 35 years olds.

The National Management Salary Survey, published by the Chartered Management Institute (CMI) and salary specialists XpertHR, surveyed more than 68,000 professional UK workers.

It revealed that a “bonus gap” has also grown between female and male bosses. The average bonus for a female director stands at £41,956, while for male directors the average pay-out is £53,010.

The differential between average male and female annual salary increases is also affected by age and seniority. Across all levels, the average salary increase stands at 2.3 per cent, but inequality increases at senior levels.

Female directors enjoy, on average, a basic salary increase of just 1.9 per cent, compared to 2.7 per cent for male directors. Including bonuses, on average a male director took home £204,373, while a female director was awarded £171,945.

Gender discrimination in pay packets was outlawed 44 years ago under the Equal Pay Act, but inequalities still persist.

Younger women edge ahead of men in salary terms under one metric. In three of the five most junior job levels, female annual pay awards are an average of 2.4 per cent, compared to 2.3 per cent for men’s.

Ann Francke, Chief Executive of CMI, said: Lower levels of pay for women managers cannot be justified, yet our extensive data shows the pay gap persists…

It’s not right that women would have to work until almost 80 for the same pay rewards as men. We have to stamp out cultures that excuse this as the result of time out for motherhood and tackle gender bias in pay policies that put too much emphasis on time served.”

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<![CDATA[We don't really understand empathy, but we know business could do with a little more]]> Business buzzwords are changing. Pervasive gibberish like “mission-critical optimisation” and “blue-skies thinking” is in decline; instead we’re witnessing the rise – sorry, “phase-in” – of terms like social innovation and sustainability. Corporations now want to show you not just that they care, but that they really care. Empathy is the latest addition to the management dictionary.

There’s a huge profit motive galvanising this change. Belinda Parmar, author of The Empathy Era, thinks we’re on the cusp of a corporate revolution. “Empathy is the key to profit,” she says. “It is a natural social resource that has, for years, been left untapped by an outdated corporate model, hampered and trussed up by its systemising protocol. The corporate world is in need of rehabilitation. It needs to redress its empathy deficit.”

But what actually is it? Derived from the Greek words em (in) and pathos (feeling), empathy was first introduced to English in 1909 by psychologist Edward Titchener in an attempt to translate the rather more aggressive-sounding German equivalent, Einfühlungsvermögen. The idea of “feeling-in” means the ability to understand and share other people’s emotions.

How this works is another question. The neuroscience behind emotions is notoriously complex but one idea that Parmar – who was recently knighted for services to women in technology – cites is the “Empathising-Systemising (E-S) Theory”, proposed by psychologist and autism expert Simon Baron-Cohen. He suggests the male brain is naturally more inclined to systemising – looking for underlying sets of rules and patterns – than to empathising, a trait more common in women.

Based on a questionnaire designed to gauge your “Emotional Quotient”, people with Autism Spectrum Disorders are categorised to represent the “extreme male brain” – sometimes possessing huge talents in maths and physics but struggling with social interaction. The gendered terms represent the frequency with which the characteristics are present in men and women, but Baron-Cohen suggests both genders can have the ‘other’ brain.

It’s still very much a theory – we haven’t, for instance, found any neurological differences using MRI scans to support the idea of empathising or systemising brains, which means much of the behaviour may be down to social conditioning. But it does go some way to explaining other anomalies, like the higher prevalence of autism in boys than girls. Separately, the E-S theory is also a better predictor than gender of who goes on to study STEM subjects.

It sounds a bit pseudo-sciencey but there aren't many better theories out there: empathy research still has a long way to go. Despite this, even these preliminary findings have important ramifications for businesses. Parmar claims systemisers tend to be rewarded for their ability to optimise, particularly in male-dominated sectors like science and technology which are infamous for their lack of empathy. This leads to a culture with little time for feelings, "restricting imagination and creativity in the workplace". You can see why the management is getting worried.

And it isn’t just business which lacks the ability to empathise. Before becoming president, Barack Obama described the great need for compassion in times of economic crisis. "There's a lot of talk in this country about the federal deficit,” he said. “But I think we should talk more about our empathy deficit - the ability to put ourselves in someone else's shoes; to see the world through those who are different from us – the child who's hungry, the laid-off steelworker, the immigrant woman cleaning your dorm room.”

He’s not alone. Even our politicians are beginning to realise the need to – at the very least – appear empathic. Ed Miliband referred to empathy seven times in a recent speech at the Royal Institute of British Architects as he claimed it was one of the “most underrated virtues” in politics. According to the Sunday Times the Labour leader has been meeting up with Baron-Cohen in an attempt to better connect with the public. Political stunt it may be – but if it works, then empathy might be more than just a buzzword.

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<![CDATA[Ed Smith: Megabucks executive pay isn’t a reward for excellence – it’s a corporate contagion]]> Take a bow, Burberry shareholders. Their rejection of the £28m pay package offered to the company’s chief executive, Christopher Bailey, is a rare example of common sense pricking the bubble of executive pay. The shareholders’ wishes may yet be ignored but they will remain right.

Three issues should make us doubt that an employee, however talented, is worth almost £30m (the package included an “annual allowance” of £440,000 on top of a £1.1m basic salary and shares worth millions of pounds). First, we overestimate our capacity to distinguish between luck and skill. Second, in a competitive industry, the gap between executive pay and average salaries is far from logical. It is a relatively new invention, designed by and for the managerial class. Third, exorbitant salaries, routinely justified as inevitable due to “competition”, are better explained in terms of contagion. A few absurd salaries become the justification for ludicrous pay across a whole industry.

In pointing out that it is hard to disentangle luck from skill, I am not arguing that Bailey is merely lucky. Yet precisely identifying causality in business is difficult. As Phil Rosenzweig describes in The Halo Effect, we tend to rush to anoint superheroes, even on shaky evidence. The truth is that the origins of success often pre-date the people who get all the credit. Conversely, some executives get fired before their legacy has come to light. The film executive Mark Canton was reportedly sacked by Columbia Pictures in 1996 for being “incapable of distinguishing the winners from the losers”. In reality, five huge hits (with combined box-office revenues of over $1.5bn) were in the pipeline. The assumption that success is inevitably caused by current senior management is misleading. Personally, when I am sceptical, I am more inclined to withhold a £30m cheque.

The American banker J P Morgan argued that a company’s top brass should never earn more than 20 times what those at the bottom do. Such a ratio now sounds laughably idealistic. In the first decade of this century, the average pay ratio of CEO to employee climbed from 47 to 128. This was not because they were doing a brilliant job. Even in downturns, top earners have continued to streak away from the field. Between 2000 and 2008, when the FTSE fell by 30 per cent, cash payments to executives increased by 80 per cent. It is not inevitable progress: it is fashion. At other moments in the history of business, the pie has been cut up differently. Between 1930 and 1960, the real income of top US managers fell. It is possible – as well as desirable – that inequality of income, now at an all-time high, could come back to more sensible levels.

As Ferdinand Mount pointed out in The New Few, his study of inequality, the galloping strides of today’s executive pay cannot be explained by supply and demand. Talent is always competing, whatever the era or arena. It is culture, not competition, that explains why pay gets out of hand. Recent studies of high pay explored how excessive rewards create a contagion effect. Boards of directors usually look at what other com­panies are paying, then set their own remuneration accordingly (Burberry’s outgoing chief executive, Angela Ahrendts, was poached by Apple for a £35m package). The researchers demonstrated that if 10 per cent of companies initially pay CEOs twice as much as competitors, compensation eventually doubles for all CEOs.

Those defending Bailey’s proposed pay have typically used sporting analogies. Why shouldn’t business stars get paid the same as sports heroes? They argue that Bailey, who will remain chief creative officer as well as being chief executive, is both the CEO and the star player. What’s fair in sport, his apologists say, should be fair in fashion.

There are several problems with this argument. Even as an ex-sportsman, I’m far from convinced that top athletes deserve – or need – such outlandish rewards. I am also quite certain that if top footballers were paid half as much, the level of their game would not deteriorate at all. Beyond a certain level, money is a very weak source of inspiration. What motivates players to squeeze yet more cash out of their employers is pride or ego: it gives them a certain strut in the changing room. The money is just a number.

And there are more central problems with the sport-business analogy. If you are interested in the ways that sport is like life, then you must also be vigilant about the ways in which it isn’t. The level of transparency about how good you are is a perfect example of the latter. There can be no doubt about the achievements of a great athlete, especially in an individual sport. His or her career is revealed in its entirety on television for us to scrutinise and judge. How good is Novak Djokovic at tennis? There is no element of guesswork about the answer. We can be certain – more certain, surely, than we can be about the value added to a company by a business executive.

If Djokovic’s performances deteriorate, we will know about it as quickly as the Serb himself. Nor can he gain directly from any unearned and invisible inheritance from the previous Wimbledon champion. He has to win the prize money by explicitly defeating the competition – there are no cosy stock options that, in good economic times, will float upwards on a rising tide that raises all ships. Djokovic’s situation is different from that of a CEO who may benefit from opaque factors influencing his “track record”. This total transparency sustains sport’s ruthlessness. There is no soft landing in sport: you lose, pack your bags and go home.

Christopher Bailey is probably very good at his job. That doesn’t mean he must therefore deserve £30m. 

Ed Smith’s latest book is “Luck: a Fresh Look at Fortune” (Bloomsbury, £8.99)

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<![CDATA[New perceptions]]> Transport Secretary Patrick McLoughlin must be thanking his lucky stars that he took up office at such a promising time for British infrastructure. Back in the depths of the financial downturn, just a few short years ago, his predecessors could scarcely have dreamt of presiding over such a potential upturn in the nation’s transport system.

Today, plans for HS2 are steaming ahead and the coalition government is putting together an Infrastructure Act to kickstart major projects amounting to £36bn. Innovative forms of project finance are expected, which should attract significant funding from overseas investors.

While I share Mr McLoughlin’s general optimism, there are, however, some big questions that may be easily overlooked in the broader public debate about Britain’s hoped-for transport renaissance.

First, how committed is the government to taking a more long-term approach to infrastructure planning? Can it escape the understandable short-term demands of party politics? We will hopefully hear more about the government’s broader approach in the forthcoming Infrastructure Act, or indeed in the 2014 Autumn Statement, expected in early December.

Second, and of equal importance, where are we going to find the army of highly qualified British engineers needed to build all these ambitious projects? The challenges of long-term infrastructure development go far beyond transport policy. Both phases of HS2 are unlikely to be completed before the early 2030s, for example, and if ministers are looking at projects with outcomes measured in decades, it is critical that we address an education system that is apparently failing to interest young people in engineering.

The UK faces a growing shortage of suitably qualified graduates. And the skills shortfall will continue to deteriorate, with an estimated 2.2 million entrants to the industry needed nationally over the next five to ten years. That is what it will take to satisfy a projected 40 per cent growth rate in a sector that already makes up nearly a fifth of the total UK workforce.

Slim chance, however, that our schools are well positioned to meet this demand when, according to industry surveys, only half of 11 to 14-year-olds would consider engineering as a career, and only around 7 per cent aspire to join the profession.

Efforts, admittedly, are being made, through initiatives such as Tomorrow’s Engineers, which seeks to incorporate engineering into school curricula. Yet the challenge goes, perhaps, far deeper than education policy. It touches the entire way in which the profession is viewed by the general public. Astonishingly, around 60 per cent of Britain’s engineers believe that the term “engineer” is not properly understood in the wider world. It is hard to imagine doctors or lawyers feeling the same level of misunderstanding.

Changing such deep-rooted perceptions will be no easy task. But such an important issue surely merits a reappraisal of our approach to education if Britain is to fully exploit the job-creating potential of long-term infrastructure projects. And that needs to start in the classroom. Initiatives to promote engineering ought to be considered as a core plank of curriculum planning, backed up by a campaign of mentoring and special financial incentives to promote interest in degrees.

As a first step, I’d call for a dedicated steering group of industry figures, education leaders and relevant government figures to tackle this important challenge.

Perhaps such a proposal could be integrated into the kind of independent commission on infrastructure proposed by Sir John Armitt, the chairman of the Olympic Delivery Authority and former chief executive of Network Rail? In many respects, Sir John’s thinking helps address my concern about Britain’s ability to benefit from all the advantages of a growing transport infrastructure. I support his proposals to focus our strategic thinking on transport requirements over the next 25 to 30 years, in a way which transcends party political boundaries.

As things stand, there is a risk of investment priorities being chopped and changed with every new government. Hence, how then can the big engineering employers plan for the future? How can the dependent supply chains look for any sustainable long-term revenue growth, recruiting to their fullest with real confidence that the demand for new jobs will be maintained?

With these uncertainties, one begins to see why engineering is struggling to win over potential recruits.

Unless steps are taken to shore up the long-term sustainability of the industry, the nation’s talented youngsters will continue to choose more reliable careers.

I have no doubt that our Transport Secretary can contribute much to this debate. But cross-party consensus is vital if we are to build a deep-rooted infrastructure policy that is truly fit for the future.

Tom Bishop is executive chairman for Europe, Middle East and India at URS

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<![CDATA[The site of the world’s tallest skyscraper is currently a melon patch]]> Sky City, a skyscraper in Changsha, China, was meant to be the tallest building in the world by now. Construction began on 20 July last year; it was originally meant to be finished by April.

In a startling display of optimism, its builders, Broad Group, claimed it could construct all 838m of the skyscraper’s frame in just 90 days, using a technique whereby steel parts are made individually and then stacked together. This is not quite as crazy as it sounds: the firm has successfully used the same technique to construct at 30-storey hotel in just 15 days.

Needless to say, 90 days has come and gone, and SkyCity has yet to reach the heavens. In fact, National Business Daily, a Shanghai newspaper, reported this week that the 20-30 per cent of the 100 acre site is now covered in water; the rest has been planted with watermelons and corn. That’s hard to visualise, so here’s a breakdown:

Construction on the site actually halted less than a month after it started. At the time Zhang Yue, the Broad Group’s chairman, told the New York Times that, despite the hiccup, he expected to finish the building in June or July 2014. He did, however, hint that all was not well, saying: "Ordinary people do not know the challenges and issues I face every single day. There are so many issues. 24 hours in a day are not enough for me to deal with all of them." 

One of these challenges must be keeping him up at night even now. The National Business Daily also quoted officials from a “local communal administrative committee”, who said that, a year on, Broad Group still lacks the permits it needs to continue building.

If Sky City is ever completed, it will stand 8.2m higher than Dubai’s Burj Khalifa, which is currently the tallest skyscraper in the world. The Kingdom Tower in Saudi Arabia is expected to stretch to 1000m, but that won’t be completed until 2019.

So Broad Group could still snatch the “world’s tallest” crown. Just give them 90 days. 

This is a preview of our new sister publication, CityMetric. We'll be launching its website soon - in the meantime, you can follow it on Twitter and Facebook.

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<![CDATA[A 3D printer is building a canalhouse in Amsterdam ]]> Building a house is quite the production. There’s the time, the expense, the dust, and the leftover building materials that hang around in the garden for years after the builders clear off.

Unless, that is, you print it. From its home in a Dutch shipping container, a giant 3D printer, the KamerMaker (“room builder”), is currently spurting out globs of molten bioplastic to form walls. The honeycomb-esque design leaves room for pipes and wiring to be installed later.

KamerMaker is the brainchild of Amsterdam-based DUS Architects, which is using it to build a 15m high, 6m wide house on the banks of a canal in the city. The house’s 13 rooms will be printed individually and slotted together to form each floor; the floors will then be stacked on top of each other to create the final building. The whole thing’s a bit like giant, inhabitable lego. Construction kicked off on 1 March, and the house should be finished in, er, three years’ time. You can see their rendering of the finished building above – just don't ask us what the weird ghost buildings on either side are about. 

So, if the process is still so slow, what exactly are the advantages of printing a house? For a start, there’s no waste, as the printer uses raw materials and only prints what’s needed; plastic waste from other industries can be recycled as “ink”. As long as a house can be printed near its final location, transport costs are low. And this prototype has no foundation, so that’ll cut down on costs, too. (Although a team is currently on the problem of how to stop it toppling into the canal once it’s constructed; the current plan is to fix it in place with long metal poles.) When it’s no longer needed, the building can be shredded and its materials reused.

Hans Vemeulen, the project’s co-founder, told UrbanLand magazine that he was inspired by our need for ever-faster building strategies: “We need a rapid building technique to keep pace with the growth of megacities.” This seems a little improbable given that this first project will take three years to complete, but Vemeulen claims rooms could be printed on the printer and installed in the space of 24 hours. The project’s website also claims that we’ll soon be downloading and personalising designs for our dream house, then sending them to a KarmerMaker contractor to print and construct.

DUS aren’t the first company to print out properties. Win Sun, a Chinese firm, claimed back in April to have printed 10 buildings in one day using concrete and waste materials, although local building regulations prohibit printing structures of more than one storey. Technologies like this could certainly be of use in constructing shelters after natural disasters, or during refugee crises. Whether the rest of us will ever be happy to live in a plastic house, however good the view of the canal, remains to be seen.

This is a preview of our new sister publication, CityMetric. We'll be launching its website soon - in the meantime, you can follow it on Twitter and Facebook.

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<![CDATA[Biz Stone: the Californian who flew the Twitter nest]]> The Google buses that circle San Francisco usually pick up employees to take to their Silicon Valley HQ, but in December they were held up in a series of protests by citizens disgruntled at the elite separatism they embodied. Naturally, the Google employees tweeted about their desperation. This, I imagine, was a problem for Biz Stone.

One of Twitter’s co-founders, Stone makes a strong case in his recent book, Things a Little Bird Told Me, for a “new definition of capitalism”, one in which money is made and consumers pleased but that also has “a positive impact on the world”. For Twitter to be used as the medium of the oppressor, even a Google-bound techie one, must have made his conscience prickle.

When I talk to him on the phone about the rise of social inequality, he seems resigned to it: the split “seems to be happening in a concentrated form around here [San Francisco] and then in a more diluted form across the US and potentially the world, and that may just be systemic, the way that we pursue our lives, the way that business works now”. Stone has played his own small role in this trend. Just before he left Twitter in 2011 he moved the company into a rundown part of San Francisco; the regeneration has been good for the area, but expensive, too – rents have flown up and Twitter got a $56m local tax break to do it.

Stone’s attitude doesn’t quite chime with the optimism of his book, in which he talks about how he learned from all his childhood knocks to become the bold innovator he portrays today. Growing up in shabby-genteel poverty in Massachusetts – he recalls the government-issued cheese his mother gave him – his first strike against the system was his no homework policy, which to him was productively rebellious but was no doubt tiresome to both classmates and teachers. The book moves on like this: seen in another light, what Stone thinks of as assertive could be coloured obnoxious.

After joining Evan Williams at Google, the pair left for the company that would eventually produce Twitter. Stone’s concrete contribution to Twitter beyond the “Follow” button and the site’s initial designs is unclear. The idea and technology were Jack Dorsey’s and the money Williams’s; Stone seems to have been a frontman-cum-guru, infusing the project with West Coast vibes, hence the book’s reach-for-the-stars tone.

Yet Stone clearly left some libertarian coding in Twitter’s DNA. Following Edward Snowden’s revelations about the National Security Agency’s Prism surveillance programme, a comprehensive trawl for personal data and communications, Twitter could proudly say that it had not co-operated. Stone clearly prized this response. “It’s very important,” he says, “that companies like Twitter continue to make it difficult for any government to request something that doesn’t belong to them.” Yet when he talks about how the rules of the internet are still being formed – “all of us are pushing on it and pulling on it and tying to figure out where it breaks and where it bends” – he seems to concede that we should expect more government interference.

As Stone is rushed off the call, I slip in a final question about whether we need to be worried about the diminution of freedom in the name of security. “Some of us should be. I’m just saying that I don’t worry about it every day because I focus on different things, but some of us should be, yes.” For someone whose book makes such play of his love of liberty, his equivocation seems #lame.

Josh Spero is the editor of Spear’s magazine

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<![CDATA[Get the frack off my land: reform of trespass laws explained]]> The government gave fracking companies the green light in the Queen’s speech this week, crucially removing the requirement for firms to gain permission from home-owners to drill under their land.

Although ministers claimed a final decision would depend on the outcome of a recently-launched public consultation, they signalled their firm intention to smooth the path for firms to exploit Britain’s shale gas reserve.

Much has been made of this permission waiver, which was first floated by the government in January, and which is likely to be included in an Infrastructure Bill during this Parliament.

The trespass exemption for fracking firms sits uncomfortably with most people’s intuitive interpretation of land ownership, but also their legal understanding of the matter too.

After all, the most common definition of land rights and a central principle of property law, states: “cuius est solum, eius est usque ad coelum et ad inferos”. 

Or, for non-Latinists, this translates roughly* as: “he who owns soil does so up to the heavens and down to the centre of the earth”.

Well, up to a point. Admittedly, the legal principle, which entered common law during the reign of Edward I, is still accepted in limited form today in modern law.

But there are many exceptions, including airspace, water, trees, plants and flowers, wild animals, and, crucially, mines and minerals.

So the implication, frequently appealed to in the current furore over fracking, that horizontal drilling under a private owner’s land is a unique exception to, or transgression against, the owner’s legal land rights is misleading.

That said, it is true that up until now, current laws of trespass have required fracking firms to gain permission from land owners to drill under their land. Drilling can extend up to 3km horizontally underground from a central well pad.

This has held true for all historical landward oil and gas exploration in the UK. Companies seeking conventional energy sources on land require a license from the Department of Business, Innovation and Skills, which grants exclusive rights to explore for and exploit onshore oil and gas.

The license has never included any rights of access, however, nor does it waive the need for the company to gain planning permission and any other consent needed under current legislation.

Further complications arise if a company wants to drill through a coal seam in search of gas – they need the permission of the Coal Authority, which has been the rights holder of all British coal since the valuable sedimentary rock was nationalised in 1994.

Which brings us to the other question of ownership of minerals in the UK. Firstly, to define minerals. According to the Town and Country Planning legislation, minerals are “all substances in or under land of a kind ordinarily worked for removal by underground or surface working, except that it does not include peat cut for purposes other than for sale.”

Essentially, a home- or land-owner holds the rights (which should be registered in the Land Registry along with details of surface land rights) to all the minerals in their land, with the important exceptions of gold, silver, coal, oil and gas.

Land-owners would still require planning permission, however, from a mineral planning authority to extract any of these minerals that they technically own from their land.

As for the ownership of oil and gas, the Petroleum (Production) Act 1934 granted all onshore rights to the Crown. A different act presides over rights in the UK Continental Shelf outside UK territorial waters, but again these are vested in the Crown.

So, the fact that the state owns any shale gas that might under your land is not out of keeping with rights to conventional fuels.  And while the proposed reform of trespass laws charts new territory for land-owners' legal rights, there are many other exemptions to these rights as they stand.

The nub of it is that fracking firms can already drill under your land without your permission. The new legislation will only make the process easier.

As Energy Minister Michael Fallon pointed out this week: “At the moment, a developer can apply to the courts for permission to drill a horizontal pipe a mile down underneath your house and needs to go to the Secretary of State to get that permission. We've got a solution that we think simplifies that."

 

 

* Four years reading for a classics degree well spent then

 

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<![CDATA[The bizarre secret of London’s buried diggers]]> I’ve made a discovery about what is buried under the swimming pools and basement conversions of wealthy west London. This booty is worth about £5m. More revealing, however, is another fact: this £5m was tossed away like small change tipped into a busker’s hat. It is not Nazi art, or plutonium that has been used to kill the enemies of Russian oligarchs. It is a fleet of diggers.

Beginning in the 1990s, buyers of London’s most expensive addresses began to feel a little hemmed in, even claustrophobic, inside their houses. Where could one take a swim, for example? Or watch a film on a cinema-size screen? Obviously, the idea of leaving the house to pursue such pastimes – and thus engaging with the human colour and spectacle that were once considered inextricably bound up with living in a city – was too ghastly to countenance. No, all pleasures had to be brought within the boundaries of one’s house, thus protecting the owner from the dangers of face-to-face interaction with normal civilians.

So, many of the squares of the capital’s super-prime real estate, from Belgravia and Chelsea to Mayfair and Notting Hill, have been reconfigured house by house. Given that London’s strict planning rules restrict building upwards, digging downwards has been the solution for owners who want to expand their property’s square-footage.

The challenge of adding new subterranean floors to London houses has become a highly lucrative business. The heavy lifting – or, in this case, the heavy digging – is usually contracted out to basement-conversion specialists. These firms discovered that it was reasonably easy to get a small digger (occasionally two) into the rear garden of a house on an exclusive 19th-century square. Sometimes they simply knock a hole in the wall and drive the diggers straight through the house. In other cases, the windows are so large that a digger can squeeze through without dismantling the bricks and mortar.

The difficulty is in getting the digger out again. To construct a no-expense-spared new basement, the digger has to go so deep into the London earth that it is unable to drive out again. What could be done?

Initially, the developers would often use a large crane to scoop up the digger, which was by now nestled almost out of sight at the bottom of a deep hole. Then they began to calculate the cost-benefit equation of this procedure. First, a crane would have to be hired; second, the entire street would need to be closed for a day while the crane was manoeuvred into place. Both of these stages were very expensive, not to mention unpopular among the distinguished local residents.

A new solution emerged: simply bury the digger in its own hole. Given the exceptional profits of London property development, why bother with the expense and hassle of retrieving a used digger – worth only £5,000 or £6,000 – from the back of a house that would soon be sold for several million? The time and money expended on rescuing a digger were better spent moving on to the next big deal.

The new method, now considered standard operating practice, is to cover the digger with “hardcore”, a mixture of sand and gravel. Then a layer of concrete is simply poured over the top. Digger? What digger? The digger has literally dug its own grave – just as the boring machines that excavated the Channel Tunnel were abandoned beneath the passage they had just created.

How many of these once perfectly functioning and possibly still serviceable diggers are petrified underneath central London, like those Romans preserved cowering in the corners of houses in Pompeii? Estimates vary. One property developer I asked reckoned at least 1,000; another put the figure at more like 500. In some of London’s newest luxury conversions, “sub-basements” are being tucked beneath the existing basement conversions. But developers are stumbling on a new kind of obstacle as they burrow deeper still: abandoned diggers from the last round of improvements.

On one level, the series of calculations that ends with hundreds of vehicles concreted underneath basements is entirely rational. On another level, it is a postcard from the front line of one of the craziest stories of our age: the global struggle to own elite London property.

In 1985, Michael Wood presented In Search of the Trojan War for the BBC. For many of us brought up in the 1980s, this was our first taste of archaeology. At times, the methodology seemed intriguing. Wandering around classical Asia Minor, the irrepressibly enthusiastic Wood would pick up a coin or trinket, or perhaps stumble on what might have been a foundation stone. He would then stare deeply into the camera and suggest something like, “Here, surely, lies the inner sanctum, the very essence of the seventh great Trojan civilisation.”

Three millennia from now, when Wood’s successors are excavating the dazzling ruins of west London, they will surely decipher a correlation between London’s richest corners and the presence of these buried diggers. The atrium of the British Museum, around 5000AD, will feature a digger prominently as the central icon of elite, 21st-century living.

What will the explanatory caption say? “Situated immediately adjacent to the heated underground swimming pool and cinema at the back of the house, no superior London address was complete without one of these highly desirable icons, sometimes nicknamed ‘the Compact Cat’. This metallic icon was a special sacrificial gesture, a symbol of deep thanks to the most discussed, revered and pre-eminent god of the age, worshipped around the world: London Property.” 

Ed Smith’s latest book is “Luck: a Fresh Look at Fortune” (Bloomsbury, £8.99)

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<![CDATA[With so many measures and initiatives, why is boardroom diversity taking so long?]]> There has been plenty of talk about the need for greater board diversity in recent years. With so many measures and initiatives being touted, why is it all happening so slowly?

Diversity should be an attribute of a balanced and capable board and, in itself, is not a new concept. However, calls for more diverse boards have grown louder in the wake of the 2008 financial crisis. Against a backdrop of bank failures and bail-outs, concerns about executive pay and aggressive tax planning, the public have looked at company boards and taken the view that their shortcomings might be connected to a lack of diversity in board membership. And it is not just companies. Other bodies, including governments, have faced similar scrutiny. Board diversity has become an issue for mainstream governance.

But how does diversity improve a board, or company's, performance? Corporate governance has historically emphasised the need for a balance between executives and non-executives to ensure that boards have the skills, experience, independence and knowledge required to enable them to carry out their responsibilities effectively. This might not be enough. To achieve long-term business success, companies have to take a wider view on how they interact with the markets in which they operate, and meet a range of sometimes conflicting responsibilities. They have to achieve a business purpose, behave in a way that is acceptable; meet legal and regulatory requirements and be accountable for their activities. Having a diverse boardroom can help.

For example, it helps for the company to be in tune with its key internal and external stakeholders, and see business opportunities and threats through their eyes. Board diversity can help boards understand their customer, supplier, employer and other relevant perspectives better. As companies become more international, this adds another dimension.

In order to behave in a socially acceptable way, the board may wish to consider the message they send about their company - if members look like each other rather than like society, for example, this can undermine people's confidence. Furthermore, diversity encourages rigour in the boardroom. Although a tightly knit group of like-minded people, with common experiences can take decisions quickly and efficiently, there is always the risk of groupthink. The problems here are well documented. An over-riding objective of sticking together may also mean that common limitations and biases go unchallenged. Better decisions are made by a board with members who are prepared to consider a wider range of alternatives.

This is easier said than done. We know that there are practical challenges. A board cannot accommodate an endless number of people representing different stakeholder groups in order to mirror society at large. Also, having a diverse board does not automatically mean that diverse viewpoints will shape company behaviour and decisions. Board members need to work hard to enable a robust process that allows different views to be expressed, heard and considered. They will still need to work as a team, serving the interests of the company and sharing responsibility for its decisions. It will take effort and commitment by board members to develop a mutual respect for each other and to recognise the value of an open exchange of diverse views.

The pipeline issue is also receiving more attention today. Building a pool of diverse and talented individuals across an organisation is important and often more difficult than introducing diversity through board appointments. Some challenges have deeper roots in institutions and society more generally, and cannot be resolved by a company alone. For example, if certain groups are fundamentally disadvantaged within the education system, it will be difficult in the short term for companies to identify suitable members of those groups for board positions, or to make sure that they are properly represented in the company's talent pipeline. But then again, the diversity debate is giving us an opportunity to raise public awareness of such issues.

There is no one-size-fits-all answer to the question of board diversity, and a company needs to reflect on its business purpose, the society where it operates and the stage of development it has reached. It will also take a lot of effort for companies to find ways to take account of many different perspectives, while keeping the board a practicable size. Diversity in substance, not just in appearance, brings benefits to boards.

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<![CDATA[Quids in: how Poundland conquered the British high street]]>

Pile 'em high, sell 'em low: the chain's winning formula stems from knowing exactly what we need. Photo: Amit Lennon

At the very back of the shop, far behind the stacks of Fairy Liquid and Dettol in the window, and the rows of pet food, confectionery and Tupperware, is Poundland’s book section: a couple of narrow shelves on which a few copies of a Kingsley Amis biography are strategically wedged between The Official Ollie Murs 2014 Annual and a self-help book on coping with childlessness.

In its early years, the whole of Poundland was as weird and wonderful as its bookshelves. But now, although it can still be relied on to stock some odd products (my recent finds include a lime-green bottle of aftershave called “The Edge” and a bag of “man flu” lozenges – the perfect passive-aggressive gift) it increasingly resembles a more conventional grocery or supermarket. The aisles are arranged logically, there’s a small fridge filled with drinks and snacks near the tills, most of the brands are recognisable and twice a shop assistant comes over to ask if he can help me with anything.

Poundland has smartened up its act. Its founder, Steve Smith, who opened the first shop in Burton-on-Trent in 1990 with a £50,000 loan from his father, likes to refer to the chain’s ISE, its “irresistible shopping experience”. You might snigger at the jargon but Poundland’s growth has been impressive. The firm trades through 517 shops across the country, and it plans to expand the number to 1,000. It sold £997.8m of goods in the year to April 2014 and on 12 March began trading on the London Stock Exchange, floating at £750m. How did a budget store in Burton-on-Trent selling (let’s face it) a lot of cheap junk grow so big?

Fixed-price shops and discount retailers have been the winners of the downturn. While sales at the big supermarkets are falling, the German budget stores Aldi and Lidl increased their sales by one-third and 14 per cent, respectively, in the third quarter of last year. Their success is triggering a price war on the high street: in March, Morrisons announced that it would invest £1bn in price cuts over the next three years, and Tesco and Asda quickly followed suit.

In 2008 the likes of Poundworld, 99p Stores and Poundland filled the gap in the market after Woolworths collapsed – and did so often literally, by taking over old Woolworths shops. My local Poundland, on Seven Sisters Road in Holloway, north London, occupies a familiar if depressing landscape, surrounded by empty lots, pawnbrokers and betting shops and standing opposite the distinctly scruffier MightyPound. (I went into MightyPound with the intention of interviewing a few customers for this article, but when I tried to snap a picture of a plastic handbag emblazoned with the friendly slogan “Keep calm and f*** off”, lying next to some furry toilet seat covers, a shop assistant barked, “No photos!” and ejected me.)

I can’t imagine this kind of customer service at Poundland. One intriguing aspect of the chain’s growth has been its success in attracting more affluent, middle-class shoppers. A friend of mine, a secondary school teacher, is obsessed with the place. “Guess where I got this?” she’ll say gleefully, waving a spiky plastic ball designed to stop clothes sticking together in the tumble dryer. The company boasts that a quarter of its shoppers are from the AB social group, broadly defined as those working in administrative and professional roles, or in mid-level management and above. Its most profitable stores are located in wealthier towns, such as Cambridge, Stratford-upon-Avon, Guildford and Bath.

We’re all becoming much less snobby about discount retailers. According to the research group Kantar, half of Britain now shops at Aldi and Lidl. They’re deliberately catering to middle-class tastes: at Christmas, Aldi sold lobsters for £5.99, award-winning champagne for £10 and cheap Serrano ham. With standards of living still below 2008 levels, middle-class shoppers are being more open-minded about where they buy.

Poundland doesn’t sell any £1 lobster or champagne – which is probably a good thing (I was not convinced by its faux-European champagne truffles) – but it has fought doggedly to gain social acceptance, among shoppers and mainstream brands alike, as Steve Smith tells me when we speak on the phone. His original business idea was inspired by his memories of helping out on his father’s market stall. His father kept a box on the stall for products with damaged packaging, all priced at 10p, and often that box made more money than anything else. This insight into the psychological power of fixed-price retail, married with the launch of the new £1 coin and his father’s decision to sell his cash-and-carry business and move to Majorca, lies behind his move in April 1990 to set up Poundland. When the first shop opened eight months later, it made £13,000 on the first day of trading. But Smith understood that these sales could be maintained only if he could encourage big brands to supply him with the goods to stock his shelves.

Smith says he faithfully attended buying shows for three years, but the sales representatives for major brands refused to meet him: they weren’t interested in filling the shelves of somewhere as low-market as Poundland. Eventually, he recalls, he “got a bit mad” at the stand for WD-40, the lubricant oil, and found himself agreeing to a price so high that Poundland would lose 3p on every can of the product sold. It flew off the shelves, and when WD-40 realised that Poundland had grown into one of its largest global retailers Smith was able to bargain down the price. He went on to strike a deal with Cadbury, and soon other big brands followed.

Poundland’s stock buyers are shrewd negotiators: not only are they able to bargain down prices, but they frequently talk companies into selling their product in odd-sized packages to keep the retail price under £1. While loaves of Warburtons bread sell at Tesco and Sainsbury’s in either 400 gram or 800 gram packages, Poundland stocks 600 gram loaves. Mainstream supermarkets sell Walkers crisps in multipacks of six or 12 but Poundland sells five-packs.

It also helps that these deals are seen as a useful way for companies to shift excess stock, which explains some of Poundland’s more unusual products: Smith cites among his victories the time he sold £1 golf clubs and a £1 six-foot desk. You might not think there’s much room for profit if you’re pricing everything for a pound, but Poundland makes bigger margins on its goods than higher-cost supermarkets. According to Kantar’s figures, Poundland averages a 36.9 per cent margin on its goods, compared to 25.7 per cent at Tesco and 24.5 per cent at both Sainsbury’s and Morrisons. “They negotiate really hard . . . they are ruthless,” says Simon Johnstone, an analyst at Kantar. No matter how great a bargain you think you’ve found on its shelves, the chances are that Poundland struck a bigger one.

Smith has benefited from the firm’s tough negotiating. He sold his business to the private equity firm Advent for £50m in 2002 (another private equity firm, Warburg Pincus, bought a majority share eight years later for £200m). Today, the 52-year-old, who has the broad physique and close-cut crop of a club bouncer, owns a 50-acre estate in Shropshire, complete with helipad and pet llamas. Does he still shop at Poundland? There’s a pause. “Yes, of course.” What does he buy there? Another pause. “Batteries . . . my wife bought some batteries there the other day.” Even Britney Spears shops at Poundland, he reminds me: she apparently visited the shop in October to stock up on matches. “They’re, like, the tiniest matches you’ve ever seen . . . they’re so cute,” the pop star told the chat-show host Alan Carr.

Discount retail in the UK is a profitable business: of the 1,000 people on the 2014 Sunday Times Rich List, those who made a fortune in this sector include Galen and Hilary Weston (who ran discount stores before buying up Selfridges in the UK, and are now worth £5.75bn); the Sports Direct founder, Mike Ashley (£3.75bn); and the Home Bargains founder, Tom Morris (£2bn). Many of them, like Smith, built their business from nothing and so have first-hand understanding of their cash-conscious customer base. Chris Edwards, who founded Poundworld, started out working on his parents’ market stall. The Lalanis, who launched 99p Stores, are first-generation Asian immigrants from Tanzania who moved to London in the 1970s after running a cash-and-carry near Lake Victoria. Even the current chief executive of Poundland is a self-made man. Jim McCarthy is the son of a window cleaner. He grew up in a council house in a Warwickshire mining village and rose through the ranks after joining Dillons Newsagents as a retail trainee aged 17.

McCarthy and the rest of the senior management at Poundland own 25 per cent of the firm, so they will have profited considerably from the flotation. What the sale of shares will mean for its shareholders and customers is a little harder to pin down. Was the decision by Warburg Pincus (which owned 75 per cent of the company) to take it public motivated by a desire to cash out while Poundland profits are at their peak? When the economy recovers, will middle-class shoppers retreat to the genteel, clutter-free aisles of Waitrose?

Weathering an economic recovery is, perversely, the first of Poundland’s three big challenges. The second is how to keep its products under £1, as each year of inflation puts more pressure on pricing. Finally it needs to compete in an increasingly crowded discount market: how much should Poundland fear Aldi, Lidl and even the 99p and 98p shops?

Unsurprisingly, the press team at Poundland brushed off my suggestion that shoppers might turn away as the economy improves. Perhaps they are right: all those Guardian articles promoting thrift, with their generous use of irritating terms such as “recessionista” and “credit crunch chic”, might have helped make it cool to be cheap. Hipsters now wear their charity shop purchases with pride, and self-consciously trendy restaurants serve foraged food and promote “head-to-tail” dining. Even the UK’s historic luxury stores want in on the trend. Fortnum & Mason, the London department store known for its overpriced preserves, fine wines and teas in Victoriana packaging, holds an annual Food and Drink Awards; last year it offered a special judges’ prize to Jack Monroe, who launched a popular food blog by posting low-cost, healthy recipes while struggling to feed her family on benefits.

Poundland declined an interview but agreed to answer questions by email, saying that consumer habits are “sticky and once customers experience the value on offer they are likely to keep coming back, even as the economy improves”. Perhaps, however, thriftiness will prove a fad. Simon Johnstone at Kantar said that, to hedge against a rise in disposable incomes, Poundland was investing in better-looking outlets and a wider range of groceries.

Alongside new lines of Poundland sandwiches and milk, you can expect more unusual packaging as the company struggles with changes in the economic climate. “Looking at the market in the United States, where the single-price dollar stores have been growing profitably for the past 60 years, we are confident that we can continue to manage inflationary pressures effectively for decades to come,” the company said in its statement. And yet, if you do cast your gaze on America, this year both McDonald’s and the fast-food chain Wendy’s have dropped their dollar menu, and a number of dollar stores have scrapped their fixed-price policy. At some point Poundland, too, will have to reconsider its “Yes! Everything’s £1!” slogan – or else sell single digestive biscuits and thimbles of Fairy Liquid.

But undoubtedly the biggest challenge will be to keep up with the competition. Determined bargain-hunters have never had more choice. A 2012 Channel 4 Dispatches documentary, Secrets of Poundland, exposed how the size of the firm’s packaging has shrunk over the years, how packets are labelled with offers such as “50% extra free” to convince shoppers they are getting value for money, and how some of its own-brand goods are of poor quality – yet the creative labelling appears to have had little effect on sales.

Many Poundland shoppers are too canny to be hoodwinked by the £1 label. The shoppers I chatted to at Poundland in Holloway weren’t mindlessly filling up their baskets with junk. Some, like Paul, who has been out of work for several years with a “gammy leg”, meticulously research the offers at their local discount shops. He recited the prices for two litres of milk from five local supermarkets (perhaps it’s not enough now to ask politicians to state the price of a pint of milk; a surer sign of the common touch would be an MP being able to recite the price of milk from several stores) and told me that today he’d buy his dog food at Poundland but milk at Morrisons. Robin, a retired former Tube driver, had visited all of his local pound shops in the past few days. “That’s what the government is telling us to do, to shop around,” he said. Poundland doesn’t only have to contend with price-cutting competitors, it needs to retain customers with little sense of brand loyalty who are willing to hunt around for a bargain.

As well as colonising the high street, pound shops are moving online. In February, Steve Smith launched his latest venture, in partnership with his former rival Poundworld, called poundshop.com – a garish orange website selling anything from £1 bras to baby rattles. He says the website is so popular that when it launched it crashed because of the high volume of web traffic. Within hours, 30,000 people had registered to use the site and Smith had made sales of £12,000. Once he begins reading out emails he has received from grateful online shoppers (“Thank God, we can’t carry all that stuff back on the bus, now we can!”) he is temporarily unstoppable. A week earlier, hereforapound.com also launched. It remains to be seen how well they do on the web in the long term – you’re less likely to impulse-buy an armful of cheap things when you’re sitting at your laptop – but the move suggests that they are increasingly catering to everyday shoppers rather than the bottom of the market.

Pound shops might be an eyesore on Britain’s high streets, yet unlike betting shops or pawnbrokers, their expansion could be a good thing for consumers: never before has the discount market been quite so intensely competitive. And although that bizarre bookshelf in Holloway seems a relic of the old Poundland, before private equity funding helped turn its quirky, cluttered stores into a relatively sleek operation, it also reflects the range of customers the shop now attracts.

Which means that even though Poundland is becoming increasingly common on high streets, it remains an unusual place. Where else will you find the long-term unemployed and overworked management consultants, fashion students and science teachers, diehard bargain-hunters and curious yummy mummies rubbing shoulders as they jostle for that final out-of-season chocolate Santa, ten-pack of Space Raiders or giant pot of penny sweets?

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<![CDATA[Do women really need extra help managing their money?]]> A picture has been recently circulating online of a bearded, tattooed man wearing nothing but a white vest. With one hand he pulls the front of the vest down to expose his hairy cleavage, with the other he tugs a triangle of white cotton over his crotch. He is mouth hangs open, his expression is slightly vacant, and needless to say he looks ridiculous. The image is a parody by the Bondi Hipsters of a GQ shoot with the Australian model Miranda Kerr, and it provided a neat, internet-friendly comment on the way in which women are used to sell men’s glossies.

Sometimes an easy way to expose sexism is to flip the genders round. This, at least, is why the Bondi Hipsters image sprung to mind when a new book by the Financial Times columnist Mrs Moneypenny landed on my desk. It’s called Financial Advice for Independent Women. No one would write a book of Financial Advice for Independent Men – the assumption is that adult men are inherently independent. Apparently only some women are, and they should buy a special book on finance illustrated with an old fashioned old lady's purse and with chapter titles like “Your Financial Goals (or Money is Not Boring)”.

But ignoring the unfortunate title, is Mrs Moneypenny right, do women need different financial advice from men? She gives a few sensible reasons why they might. For a start, women live longer than men – the average woman in the UK will live 2.8 years longer than the average man. Women are also more likely to be caring for dependents, whether they are children or older relatives. And globally they earn less than men:  in the UK the gender pay gap is 18.2 per cent (check out this interactive on how the UK compares internationally.) 70 per cent of the world’s poor are women.

Considered as a general group, women are under more financial strain than men – they have to support more people with less money – which suggests perhaps they do need different advice from most men. At the same time, in the UK only 11 per cent of senior managers in banking are women – and a male-dominated banking sector is less likely to be sensitive to the specific needs of women customers, whether they are single mothers, caring for older relatives, or simply struggling along on four-fifths of the salary of their male colleague. 

Mrs Moneypenny then gives an entirely ludicrous reason for offering women separate financial advice: they “lack confidence” and so “in the areas of finance – so set about by jargon and idiosyncrasies – it’s all too easy to become intimidated” – a sentiment that sounds dangerously close to suggesting that women are scared by long words. (If this isn't patronising enough, check out Mrs Moneypenny's advice on how to read a newspaper.) 

It’s become quite fashionable recently to point out women’s lack of confidence – it’s a running theme in Facebook COO Sheryl Sandberg’s Lean In, and in a new book called The Confidence Code by Katty Kay and Claire Shipman.  It might be true that a (rational and socially enforced) lack of confidence can prevent woman from successfully negotiating pay rises and climbing the greasy corporate pole, but that doesn’t mean they are less financially astute than men.

There's plenty of evidence to suggest that – even if they lack "financial literacy" (another popular buzzword at the moment) - women are better than men at managing money, and are reliable customers for banks. Charities and microfinance institutions often find it’s more effective to give loans or cash grants to women, because they are more likely to pay back the money and less likely to squander it.

Despite this, in the US, women are consistently charged higher interest on their credit cards than men. And although a UK government review of women and banking concluded in 2013 that there was no evidence of banks discriminating against women when it comes to accessing credit (refuting an earlier IPPR report), it did suggest banks need to do more to engage women. A lack of discrimination doesn't mean that the UK banking sector is attuned to women's specific financial needs.

Yet perhaps the gender divide in finance reflects a bigger, and more important point: financial advice is usually least available to those who need it most, whatever their gender. It’s more expensive to access cash if you’re poor in the UK, because more than 300,000 of the UK’s poorest live more than 1km away from a free-to-use cash machine.

The UK’s wealthiest have access to private bankers who can give them personalised advice, but the poorest have to make do with mainstream banking services with a box-ticking attitude towards giving out loans and with little time to consider individual circumstanes. Campaigners like Faisel Rahman of the UK-based microfinance institution Fair Finance believe the least well-off need the same personal attention as the wealthiest. His organisation lends to those who have been excluded by mainstream banks, and by assessing each individual’s finances on a case-by-case basis he can make loans that are affordable and life-changing for his customers.

Given that women are disproportionately more likely to live in poverty, a banking sector that is more responsive to the needs of the least-well off will also disproportionately benefit women. Confidence and jargon has very little to do with it. 

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<![CDATA[HFT: the latest scam devised by Wall Street and the City]]> Flash Boys, the new book by Michael Lewis, America’s explainer- in-chief of all things financial, is an account of “high-frequency trading” (HFT) – a technique developed by financial firms that deploys vast computing power to trade electronically on the world’s stock exchanges at extreme speed.

That may sound pretty esoteric. However, the book is generating an enormous amount of attention because it argues that HFT is the latest in the litany of scams that Wall Street and the City have devised to relieve unwitting investors of their money.

Whenever you hit Enter to buy shares through an online brokerage, Lewis shows, your order does not go straight to the stock exchange as you might think. Instead, HFT firms get a look-in first – and they use their superior speed to “front-run” your order by buying the shares ahead of time and then offloading them into the market at a marginally higher price. The resulting profits are tiny on any individual order but they run into the billions when you add them up. And they are made at your expense. Given how many people have a stake in the stock market these days with their Isas and their Sipps, this is certainly a disturbing revelation. Lewis deserves all the praise he is getting for exposing it.

Yet, to my mind, Flash Boys is even more important than this. For it exposes HFT as a prime example of one of the major problems of our age: the unintended consequences of technological innovation. Technologists, regardless of their political bent, tend to be idealists – it probably requires a healthy dose of idealism to take the risks required to innovate. But all too often, idealism can slip into naivety. The unstated assumption is that if new technology can be used to better the lot of the individual, it will. Everything will be OK so long as you “don’t be evil”.

Unfortunately, it doesn’t always work like that in the real world. The new technologies developed by well-intentioned young geeks in Silicon Valley and Old Street get grafted on to an economy that is still dominated by big, profit-seeking corporations run by shrewd old-economy dinosaurs. Innovation is driven by the admirable belief that new technology is a tool for the emancipation of human creativity and self-fulfilment. Less thought is given to what might happen after, say, News International buys your app.

The point is more general than just the compromises that come with commercialisation by big business. What the technologists are missing is the crucial importance of the social context in which new technology is deployed and, above all, the role of that most reliable of social scientific regularities, the law of unintended consequences.

The canonical problem is that we design some new technology to solve a problem but in doing so we make a crucial assumption: that everything else will remain unchanged and in particular the way that people interact, the social context, will be unaltered. What happens is that behaviour adapts. The technology succeeds – the old problem is eliminated – but new problems arise.

An example that is almost guaranteed to have infuriated anyone reading this at some time or other is the computerisation of personal credit scoring. Companies such as Experian or Equifax apply information technology to the problem of deciding who should and should not get loans.

In an economy where mortgages and mobile-phone contracts are considered essentials, the decisions that their computers churn out are important. Their claim is that their algorithms are not just cheaper than the Captain Mainwaring-style bank manager of old but also more objective and therefore fairer.

If it were true that people’s behaviour had remained constant after the introduction of computerised credit scoring systems, that might be the case. But in reality, people game the system. Personal finance articles and chatrooms warn them that cappuccinos and city breaks flag them for a downgrade, so they take a breather for three months before applying for a mortgage – and then they start up again as soon as the ink on the contract is dry.

It is no different from the snag that the Soviet Union discovered with a planned economy. You could solve the problem of low productivity – at least as the bean-counters captured it – with more demanding targets. The underlying disease of demotivation proved more resilient, however. As an aphorism of the period had it: “They pretend to pay us and we pretend to work.”

The story that Lewis tells of HFT is a perfect example of the law of unintended consequences at work in the technological transformation of the stock market, one of the most basic institutions of our capitalist economies. The computerisation of stock exchanges that began in 1986 promised to make them simpler and more efficient. The world of barrow-boy traders bellowing at one another in the pit and the old-boys network of City stockbrokers was abolished in favour of anonymous electronic trading on a virtual exchange.

The intention was to stop investors being ripped off by an uncompetitive industry. However, this assumed that behaviour would not adapt. The stockbrokers and pit traders did hang up their red braces and garish blazers but a new generation of rent-seekers emerged in their place. As Flash Boys documents, the fixed commissions levied by the stockbrokers of yesterday were replaced by the cuts taken by the HFT firms of today.

So, what is the lesson to be learned from Lewis’s latest blockbuster? Well: this past week, the government’s ambassador for digital industries announced that schoolchildren should learn less French and more code. Maybe. But the lesson of the burgeoning HFT scandal is that the naive application of technology can be a uniquely dangerous force. We should be teaching our budding technologists not just code – but the law of unintended consequences.

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