FT: American executives turn away from globalisation towards a more localised world

Last month the Financial Times’ Gillian Tett met Inge Thulin, the Swedish-born chief executive of 3M, an American conglomerate at the Council on Foreign Relations in New York (below).

She reports that – though 60% of its revenues and 40% of 3M’s workforce are outside American shores – Mr Thulin, when discussing corporate strategy, prefers to talk about “localisation”:

“Our strategy has changed. If you go back [several] years, there was a strategy of producing at huge facilities at certain places around the world, and shipping it to other countries. But now we have a strategy of localisation and regionalisation. We think you should invest in your domestic market as much as you can.”

Instead of “free” trade, American executives are now calling for “fair” trade, along with “reciprocity” and “equalisation” of trade deals.

When Donald Trump started talking about restoring US manufacturing last year, he tapped into a subtle trend that was already emerging. As the West Midlands Producers’ site noted, the reshoring trend, successes and possible pinch points, have been systematically explored and publicised by Aston University’s Professor David Bailey since 2013; two years it quoted Professor Dr Michael D. Johnson, Department of Engineering Technology and Industrial Distribution, Texas A&M University, briefly in the FT:

“My colleagues and I have found that importing goods from China to developed countries (for example, the US) entails numerous increased costs: transportation, inventory carrying, and production and logistics oversight. The combination of these increased costs, just-in-time manufacturing needs, and increased developing country labour rates contribute to the economic viability of localised flexible manufacturing facilities serving developed country markets”.

Ms Tett recommends a survey of US companies conducted by the Boston Consulting Group which showed that as recently as 2012 American companies were busy building cross-border supply chains, 30% with China – but 31% in 2015 planned to boost production in America and only 20% in China.

  • One reason for this shift is a rise in relative wage costs in China.
  • Another is that production costs in the US have fallen because of automation and cheap energy.
  • However, a third point is that chief executives have realised that long supply chains create political and logistical risks.

“The days of outsourcing are declining,” Jeff Immelt, General Electric chief executive, observed late last year. “Chasing the lowest labour costs is yesterday’s model.” even before Mr Trump arrived in office, the C-suite (slang: important senior executives) was losing its blind faith in globalisation. For better or worse, we face a more localised world”.

 

 

 

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Event: launch of post Brexit & Trump report commissioned by MEP

The Brexit vote and the election of Trump have been hailed as marking the reversal of the long trend towards increased globalisation.

These changes possibly also mark the end of neoliberalism as the dominant ideology of our times. For opponents of what globalisation and neoliberalism have meant in practice these developments might be seen as welcome. Yet at the same time Brexit and Trump seem highly problematic for anyone concerned with social justice and ecological sustainability.

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A new report by Green House authors Victor Anderson and Rupert Read, commissioned by MEP Molly Scott Cato will be launched on Tuesday 28 March from 14.00 – 16.30 at Europe House in central London.

The report considers the impact of the UK’s withdrawal from the EU on trading practices and the opportunity to move to a less globalised and more localised economy. It emphasises that there are many different versions of Brexit, and aims to put a green version firmly on the political agenda.

Note: Panel discussion with Nick Dearden (Global Justice Now) and Helena Norberg-Hodge (Local Futures and International Alliance for Localisation of which Localise West Midlands is a member). Helena’s contribution will be by pre-recorded video due to prior commitments.

 

Register and get full details here.

 

 

 

Corbyn focusses on decentralisation: localising energy and transport

corbyn-eee-manifestoJeremy Corbyn has launched an environmental manifesto that outlines plans for the UK to achieve 65% of energy from renewable sources by 2030 – without fracking.

Corbyn proposes to put cities, councils, devolved governments and communities at the heart of an efficient, decentralised energy system by promoting a shift to electric and hydrogen buses and cars; a network of low-emission zones and cycling with safe cycle lanes and hire schemes in every town and city.

The manifesto places social enterprises, including not-for-profits and co-ops at the heart of Corbyn’s plans for a “publicly run, locally accountable energy system”.

A “publicly run, locally accountable energy system”.

In a speech in Nottingham, the Labour leader said, “We want Britain to be the world’s leading producer of renewable technology. To achieve this, we will accelerate the transition to a low-carbon economy, and drive the expansion of the green industries and jobs of the future, using our National Investment Bank to invest in public and community-owned renewable energy. This will deliver clean energy and curb energy bill rises for households; an energy policy for the 60 million, not the Big 6 energy companies.”

He has promised to promote over a thousand local energy companies in the next parliament and legislate to give community energy co-operatives the right to sell energy directly to the communities they serve.

Housing

It would launch a National Home Insulation plan to insulate at least 4 million homes and phase out coal-fired power by 2025. The Labour leader estimates over 300,000 jobs would be created in the renewables sector as a result of these measures.

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Labour would reinstate the department for energy and climate change in its first month of going back into government, as part of its plan to rebuild and transform Britain, “so that no-one and no community is left behind,” he said at the event in Nottingham.

Jeremy Corbyn also encourages the British public to take action as individuals to help to meet the Paris climate agreement. He proposes to use the precautionary principle to protect the environment and people from harm – not a pay-to-pollute approach allowing the richest corporations and individuals to wreck our planet.

 

 

 

Transport for the West Midlands?

transportlogosWhat will the Combined Authority mean for transport?

What things do we want to see from the Metro Mayor?

How might you like to get involved in shaping this agenda?

An opportunity to find out about the new transport powers and budgets held by the West Midlands Combined Authority, and consider and discuss what this could mean for communities across the West Midlands…

Wednesday 14th September, 6pm to 8pm

The Warehouse (Birmingham Friends of the Earth), 54-57 Allison Street, Digbeth, Birmingham, B5 5TH

An evening open to anyone who wants to find out more and may have things to say or ideas to share about developing the excellent transport system that this region needs.

For further information, contact joe@greentravel.org.uk

America: six big shifts towards an economy that distributes economic benefits widely and minimizes damage to the environment

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sarah van gelderSarah van Gelder (right) is co-founder and executive editor of YES! Magazine which feature powerful ideas and practical actions towards a more just and sustainable world. She has co-founded a cohousing community, organized tenants and built a produce cooperative, providing local, sustainably grown whole foods, at affordable prices, to residents who want local, sustainable food sourced within walking distance of their homes.

Sarah points out that, in America as in Britain, corporations and the wealthy are recovering well after the collapse of the global economy in 2008. This is confirmed by Nomi Prins, (left, a senior fellow at America’s Demos) who has worked as a managing director at Goldman-Sachs, a Senior Managing Director at Bear Stearns and senior strategist at Lehman Brothers.

nomi prinsShe records that corporate profits have jumped back to near-historical highs, and banks are hoarding an extra $1 trillion in reserve at the Fed. However, Ms Prins points out that over 90% of the population have “an overhang of debt, stagnant wages and inferior jobs, all exacerbating income inequality”.

Sarah asserts that many people are losing patience with the corporate economy—and turning to initiatives that build a new economy. Grassroots groups, local entrepreneurs and broad-based coalitions are building the foundations of an economy that distributes economic benefits widely and minimizes damage to the environment. She lists six big shifts (the links are very well worth following):

  1. Local food, once a tiny niche market, has gone mainstream. The growing, processing, and marketing of local foods is booming in many areas, including the eastern U.S., abandoned neighborhoods in Detroit, Michigan and towns and cities throughout the country. Via farmers markets and direct purchases from growers, the food travels quickly from farm to table, keeping it fresh and nutritious. Local food isn’t always greener, but a local diet does reduce emissions from food transportation, support local jobs, and connect people to their neighbors and local environment.
  1. More workers own their jobs. Worker-owned co-ops have been spreading, particularly since the recession. While they, like all businesses, can struggle, they also can help keep good jobs stable and keep money in the community. In the Bronx in New York City, the 2,300 employees who work at Cooperative Home Health Care Associates get better pay, more job security, and more training for career advancement than their counterparts at competing firms. In Chicago, workers at a manufacturing plant who were laid off when the plant was shut down bought out the factory and now operate it as New Era Window and Doors. The most famous example of worker ownership, however, is in the Basque region of Spain, which has more than 70,000 worker-owners in more than 200 enterprises. Labor unions and community activists in the United States are beginning to emulate the success of Spain’s Mondragon Cooperatives, especially in hard-hit rust belt regions.

karma kitchen

  1. The economy goes DIY. Making, DIY, and sharing culture: ethic of reuse and no waste, a bias for local and small-scale, and a preference for generosity is blossoming. Young people especially are building tiny houses and writing open source software. Online platforms like Couchsurfing let people share their homes with travelers. Others have started “pay-it-forward” restaurants where you pay not for your own meal, but for the person behind you in the line.
  1. Money grows more responsible. Campaigners in 22 states aim to open government-owned banks at the state, county or municipal level to finance local economies and keep profits nearby. The latest trend, in light of the threat of climate disruption, is to divest from holdings in coal, oil, and gas companies. To date, more than 800 global investors have pledged to divest over $50 billion. Redirecting assets from big corporations and Wall Street to sustainable local enterprises is providing investment capital needed to fuel the new economy.
  1. clt berkshiresSome homes stay affordable. A small percentage of people are living in community land trust homes – affordable by design – and foreclosure rates were one-tenth of the national level. This success is causing cities and advocates for the poor elsewhere to look at this as a model of permanently affordable housing. Keeping basic necessities, like our homes, out of the speculative market helps stabilize the economy and averts the disruption and impoverishment that results from predatory real estate and lending practices.
  1. Innovation emerges to protect our resources. The new economy draws on the wealth of common assets, including fresh water, the Internet, green spaces in our cities, and the storehouse of knowledge we inherit from previous generations.

It does so in a way that neither depletes them nor excludes others. That means protecting water quality, keeping the Internet open, protecting the stability of the climate, and ensuring access to a good education—for ourselves and for those not yet born.

The new economy is being built on grassroots-led, pragmatic actions that people around the U.S. and around the world are taking to create widely shared, sustainable prosperity.

Read Sarah’s article here: http://www.yesmagazine.org/new-economy/six-ways-the-us-is-building-a-people-powered-economy

 

Think global, act local – H.T. Brigham, Coleshill

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Where did you buy your groceries from this week? Did you visit the independent traders on your local high street, or the one-stop-shop supermarket just down the road?

Which you choose will probably come down to several factors including, price, quality, variety, convenience, and not least, whether you even have a local high street anymore.

We are often told about the benefits of sourcing locally for the local economy, the environment and for ourselves. In reality, we probably end up striking a balance between the two, in order to get the variety of goods we need, at the price that we want to pay, whilst still sourcing more specialist items from local suppliers . . .

This is certainly true for HT Brigham. In fact, even though HTB supplies metal components on a global scale, the emphasis on sourcing locally is probably more prominent than you may expect.

And why not? The benefits of having a localised supply chain can be considerable and with over 70 % of HTB’s suppliers based in the West Midlands area, we are taking full advantage of the skill base which is right on our doorstep.

One major benefit for businesses who decide to source locally is undeniably in the area of logistics. At a time when the trend for OEM’s sourcing from the Far East appears to be reversing, it is obvious that there is more on the purchasing wish list than just cost:

  • In business, time can often be in short supply, making supplier response crucial. The focus on time to market, quick turnarounds and short lead-times is extremely prominent. A local company which will take less time to deliver the goods required, at a lower logistical cost than a company which is further away, may well have the edge.
  • On top of shorter lead-times and lower delivery costs, our local suppliers can often provide a more responsive service too. Their locality means that they can be more reactive to our changing demands and any urgent requirements which we may have.
  • They are also able to be more flexible with batch sizes and delivery schedules, as well as being able to act responsively to rectify any issues, should they occur.
  • In addition, the relationships which form between companies within a close knit supply network can be extremely valuable. With simple chains of communication, personal contact and simply being near by, local suppliers can often work closely with customers, providing a level of support which can make all the difference.

On occasion, there may be reason for some degree of caution. It may be convenient and comfortable to choose a supplier based just down the road or which you have used for forever and a day, but what if that supplier is not competitive on price or quality? We cannot allow our local suppliers to become complacent. Keep them on their toes with regular benchmark exercises.

made in the midlands header

HT Brigham is a founding member of the Made in the Midlands initiative, a business network representing approximately 250 manufacturing SMEs in the Midlands area. The group acts as a platform for firms to source and supply with each other, and collaborate in order to improve their businesses. HT Brigham is actively practicing this ethos, having recently embarked on a significant expansion programme, to accommodate an increase in workload from the USA.

With work being awarded to Midlands based architects and contractors to complete this expansion, the knock on effect from this increase in revenue from overseas, will filter through to the local economy, with the benefits being kept in the Midlands.

 

 

Read in full: http://www.htbrigham.co.uk/blog/2014/01/think-global-act-local/

Swadeshi movement, which ‘prefers the neighbourhood over the remote’, affects Indian government policy

 

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New Delhi Television online reports that the Swadeshi Jagran Manch and a farmers’ organisation met India’s Environment Minister today to protest against the go-ahead given by the Genetic Engineering Approval Committee on July 18 to field trials of 15 GM crops, including rice, mustard, cotton, chickpea and brinjal. The Environment Minister, in a statement issued later by the SJM said “the decision about field trials of GM crops had been put on hold.” More on this issue here.

The writer met several SJM members in India and was prompted by this report to summarise their approach.

Swadeshi believes that the unbalanced individualism of the West is destructive of community living. The individual requires the mutually complementary and interactive relationship of the community.

The market has to be an instrument and not the master of the people. The smaller the size of the market, the better. The Swadeshi approach is to limit the size of the market not to eliminate it as communism does. The Swadeshi global view is ” let a thousand markets bloom – not merge into one global market “.

Swadeshi prefers the neighbourhood over the remote and accepts only need-based transnationalism.

It prioritises the satisfaction of practical human needs – food, clothing, housing, education, healthcare, drinking water, energy and transport – values frugality, savings, thrift etc. and seeks to remove the distortion of defining economics as multiplication of wants and efforts to satisfy them, powered by greed.

Swadeshi advocates that income-inequalities remain within reasonable limits. Like the early co-operatives, it believes that the ratio of income of the top 20% and bottom 20% should not exceed 10:1.

The Swadeshi philosophy is not against creation of wealth – merely an injunction against unlimited consumption; a mandate for conservation and preservation of national assets and resources; an emphasis on personal and family savings and an injunction against wasteful and needless expenditure.

Research findings: allotments have good food yields without sacrificing soil quality

Fruit growing on Hall Green allotment
Fruit growing on Hall Green allotment

There are around 330,000 allotment plots in the UK, covering more than 8000 hectares and demand is growing, with more than 90,000 people currently on allotment waiting lists in the UK. 

Findings of a study published in the Journal of Applied Ecology

  • Soils under Britain’s allotments are significantly healthier than intensively farmed soils.
  • By growing on a small-scale in urban areas, it is possible to produce food sustainably without damaging the soil.

Science Daily reports that ecologist Dr Jill Edmondson from the University of Sheffield took soil samples from 27 plots on 15 allotment sites, local parks, gardens across the city of Leicester and surrounding agricultural land. She measured a range of soil properties, including soil organic carbon levels, total nitrogen, and the ratio between carbon and nitrogen (all directly related to the amount and quality of organic matter in the soil) as well as soil bulk density, an indicator of soil compaction.

Intensive farming often results in significant declines in soil organic carbon stocks, as well as reducing the ability of soils to store water and nutrients, and damaging soil structure, on which food production — and other services such as carbon storage, flood mitigation and locking up pollutants — depends.

Compared with local arable fields, the allotment soil was significantly healthier: allotment soil had 32% more organic carbon, 36% higher carbon to nitrogen ratios, 25% higher nitrogen, and was significantly less compacted. Dr Edmondson says:

University of Reading study
University of Reading study

“We found remarkable differences in soil quality between allotments and arable fields. Our study shows how effectively own-growers manage soils, and it demonstrates how much modern agricultural practices damage soils.

“Allotment holders are able to produce good food yields without sacrificing soil quality because they use sustainable management techniques. 95% of allotment holders compost their allotment waste, so they recycle nutrients and carbon back to their soil more effectively.

“An estimated 800 million city dwellers across the world participate in urban food production, which makes a vital contribution to food security. Our results suggest that in order to protect our soils, planning and policy making should promote urban own-growing rather than further intensification of conventional agriculture as a more sustainable way of meeting increasing food demand.

Vegetables growing on Hall Green allotment
Vegetables growing on Hall Green allotment

“Using urban land, including domestic gardens, allotments and community gardens for own-growing is an important and often overlooked way of increasing productivity whilst also reconnecting urban dwellers with food production.

“As well as improving food security, studies show that own-growing has direct physical and mental health benefits, and can provide access to sustainably produced fruit and vegetable crops without the associated food miles.”

As a result of the findings, the authors say that planners and policy makers should increase the number of allotments available.


Jill L. Edmondson, Zoe G. Davies, Kevin J. Gaston, Jonathan R. Leake. Urban cultivation in allotments maintains soil qualities adversely affected by conventional agriculture. Journal of Applied Ecology, 2014; DOI: 10.1111/1365-2664.12254 – gives link to pdf.

 

The University of Reading studies of soil erosion on farmland: see picture above left and http://www.ecifm.rdg.ac.uk/erosion.htm

Dr Paul Salveson: directly-elected regional government

hannahmitchell foundation logoDr Paul Salveson, like LWM’s George Morran and Cllr. Phil Davis, campaigns for directly-elected regional government. He and others from the North met on November 11th in the station pub at Sowerby Bridge, near to the Lancashire/Yorkshire border, and agreed to form a Northern ‘think tank’ to develop the case for directly-elected regional government for the North of England – either as a whole or for the three regions which make up ‘the North’.

It has been named after Hannah Mitchell, an outstanding Northern socialist, feminist and co-operator. The Hannah Mitchell Foundation is not a ‘party’ organisation: members now include Labour, Greens, Lib Dems – and lots of non-aligned people, rooted in ethical socialist traditions of mutuality, co-operation, community and internationalism.

paul salveson

Dr Salveson, its General Secretary, is visiting professor at the University of Huddersfield, in the Department of Transport and Logistics. This involves some lecturing and developing projects such as the recent conference on HS2 The North on November 15th. He was awarded an MBE for services to the rail industry, originated and developed ‘community rail’ and was directly involved in the establishment of over twenty community-rail partnerships, leading to increased use of local and regional railways and additional investment.

The Hannah Mitchell Foundation campaigns for a devolved structure of governance for the North, based on the key principles of democracy and subsidiarity, social equity and justice, and sustainable development in its social, environmental and economic senses.

Time to change: Professor Lang’s challenge: embrace local sourcing

tim langSusan Press in the Co-operative News reports a challenge issued by Professor Tim Lang, Head of City University London’s Centre for Food Policy, to the Co-operative Group. It is time to radically change the way food is delivered and distributed to the Group’s 4,800 retail outlets:

“At a time of growing interest in locally sourced food, he thinks there should be far more support for producers supplying direct to local stores. He says: “I think the co-op has lost its way a bit. Back in the 19th century, the first co-operators led the movement against the adulteration of our food and sourced local food which everyone could afford.

Unfortunately, the Co-operative Group has gone down the road of emulating the supply chain model of its major competitors with regional distribution centres and centralised supplies . . .

“But our food supply is being more and more standardised by very big and powerful companies. There are more local artisan and special interest foods, so we have come a long way, but small producers are held back by lack of access to land, ownership of which is dominated by large landowners.”

One of Professor Lang’s current concerns is the growing concern around food security – the availability of food and access to it

He points out that worldwide, figures show around two billion people are going hungry and for the first time in decades the number of food banks in the UK has tripled in the last 12 months.

Lang says: “For the first time since 1945 we are living at a time of rapidly rising inequality, with around five million people living in poverty according to the recent report from the Social Mobility and Child Poverty Commission”. He looked at the history of the co-operative movement:

“In 1994, the Group set up the Responsible Retailing Code, building fair and sustainable relationships with suppliers across its whole supply chain across the world, also leading the way on Fairtrade. It was pioneering stuff, but we need to be building upon that knowledge and working for more sustainable food thinking concerned with the future of biodiversity and our eco-systems . . .

“Like the other major retailers, the Co-operative Group goes for cheap meat reared on cereals. Around 40 to 50 per cent of our cereals are fed to animals. We need more grass-fed meat and dairy and we all need to eat less meat and double consumption of fruit and vegetables because we are storing up huge problems for the future  . . .

“We don’t need supermarkets offering 35,000 lines or people working hard to earn enough money to buy a car so they can drive to the local hypermarket. We need to look at what things will be like in 2050; the effects of climate change and the billions more people there will be on the planet. We need to establish a good food culture which is also good for the environment.

“Stores have to have better access to local food with a shorter supply chain and we have got to re-design the whole food system because frankly it is environmentally crazy.”

Read the whole article here: http://www.thenews.coop/article/time-change-food-professor-issues-challenge-embrace-local-sourcing

 

Professor Lang was the first to coin the term ‘food miles’ – in the 1990s – to describe the distance groceries have to travel to reach us. He was invited to set up the London Food Commission in the 1980s with the Greater London Council, which did some of the earliest work on the effect of food poverty. He pointed out the damage done to school and hospital meal services by government policy, making a major contribution to the Food Safety Act (1990) and the creation of the Food Standards Agency (2000). He has been a consultant to the World Health Organisation, a special advisor to four House of Commons select committee inquiries on food standards globalisation and obesity and was on the Council of Food Policy Advisors to DEFRA.

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