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Analysis of the Logistics and Energy Map of the Eurasian Transhipment Lines: Strategic North

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Abstract: Analysing the possible ways to solve the fundamental problem, the author emphasizes the importance of the largest land mass of the globe – Eurasia and transport logistics through it. The study provides an overview of potential CO2 mitigation targets for international railway and maritime transport. The author analyses three possible ways of developing Eurasian transhipment lines in accordance with green standards. The main problems and opportunities of railway roads, Southern warm congested waters are considered. Special attention is paid to the development of Northern waters transhipment lines between the most-producing countries of G-7 and advanced OECD markets.

Today the whole world is aware of the global problem of climate warming. Due to the increase in the concentration of greenhouse gases and harmful emissions into the atmosphere, this problem is getting worse every year. Air pollution occurs due to the development of industry, increased transport, and overall economic growth in countries around the world.

Thinking on the question how we can answer the fundamental challenge of global warming, we should understand that the most inhabitant part of the world and the largest landmass of the Globe is Eurasia. Thus, it is the biggest producer of CO2 and, hence, the most polluted part of the world. Also, important to underline that the biggest countries-producers (China) and countries-consumers (West Europe), producing the biggest economic output, are located on the edge of the Eurasia. These countries, which are states of G-7 (Atlantic states and other European countries) and other advanced OECD economies, drive world’s economies and may play crucial role in improving ecology and environmental standards.

It is equally important to emphasize that the most ambitious logistics and infrastructure project of today – “One Belt – One Road” – runs through the vast expanses of Eurasia. Transportation logistics between Far East and Western Europe is vital for world’s economic development, but today we do not have reliable technologies and transport lines. Due to this it is necessary to think on few aspects, which may determine the development of environmentally friendly economies in future:

–    reliable transportation (safe and environmentally friendly) ;

–    cheapest modes and transhipment lines;

–    fastest modes of transportation

Transportation aspect

The most reliable mode of the transportation is railway. It has certain advantages (compared to air and maritime transport) in the following areas: regularity (rhythmicity), reliability (guaranteed on-schedule delivery and cargo preservation) and the ability to deliver the cargo to any destination.

When comparing cargo transportation from the Far East to West Europe by sea and by rail, the delivery time is often the key argument in favour of the railway. At the same time, the amount of 14 – 15 days is often mentioned. In practice, it takes longer: 35 – 50 days by sea, 28 – 32 days by rail, 6 days by plane and 4 days by roads (See Figure 1). This difference in numbers is caused by the need to form a train, delays at some stations, etc.

Figure 1. Transhipment lines from Far East to Western Europe

Source: IFIMES, 2021

Underlining the reliability of the railway transhipment lines in terms of friendly environmental standards it is assumed that carrying a TEU between the Far East and West Europe using diesel trains would result in emissions of around 0.7 tonnes of greenhouse gas emission. However, the emissions from electric trains could be lower, possibly even falling to zero if they were powered entirely by renewable sources. This suggests that, by using railway mode, the Eurasian transhipment lines are likely to be beneficial to the environment.

While in theory, the implementation of railway electrification and the use of renewable energy sources can reduce greenhouse gas emissions, perhaps even to zero, in practice this process can take decades that our planet is unlikely to have.

This fact makes us think about other possible modes of transportation that are both “convenient” (speed, regularity, and accuracy of delivery), and beneficial to the environment.

The cheapest mode of transportation is by the sea, but it also has some pros and cons. Thus, the warm waters (red) shipping line from Far East to the port of Rotterdam in Netherlands today has great logistics prospects. Currently, 80% of cargo from China to Europe goes through the Atlantic Ocean to the ports of Northern Europe. The warm waters shipping line through the Arabian sea and the Suez Canal to the Balkans reduces the transport time by 7 – 10 days: this is so far the shortest sea route from Far East to Europe (however, to use it to its full capacity, CEE countries need to build the transport infrastructure that the region has a huge need for. This is especially true of the Balkan Peninsula and Ukraine, which are gradually entering a period of stable development after riots and wars that caused serious damage to infrastructure and the economy).

Another significant reason that slows down the speed of transportation, and thus increases CO2 emissions and reduces the level of „convenience” of warm waters transhipment lines – is the high level of congestion in reservoirs. The low cost and the higher degree of safety compared to transportation by land, has led to an increased number of commercial fleets over the past few decades. Thus, the biggest challenge is the problem of the high level of congestion in warm waters. Currently there are several maritime zones of bottlenecks (see Figure 2):

Figure 2. Main maritime shipping routes

Source: Dept. Of Global Studies and Geography, Hofstra University, 2018

  • The Straits of Malacca and Singapore (hereinafter SOMS) is the second most important global chokepoint, with over 16 million barrels per day (120,000 ships passes this route each year). It is a vital strategic region for seaborne trade since it is the shortest route between the Pacific and Indian Oceans. This narrow, 550-mile strait is also a major route for oil transportation, hence creating a danger of potential oil spills or collisions, significantly damaging the biodiversity and the marine environment. Moreover, the SOMS is polluted not only by the oil and ships, but also by enormous noise, influencing the marine bio-life. The transhipment line in addition is not considered as a safe pass, since it is beset with challenges, natural (during frequent squalls from the Indian Ocean, visibility can decrease considerably to make it difficult for mariners to navigate) and man-made (piracy).
  • The Phillips Channel in the Singapore Strait is just 2.7km wide making it another maritime zone of bottlenecks and potential oil spills. With so many vessels in the crowded Singapore Strait, there is often an increase of incidents.
  • From the Straits of Malacca and Singapore, ships make their way to the South China Sea, another zone of unstable waters in the South – East of the Indian ocean. The South China Sea is a prominent shipping passage with $5.3 trillion (nearly one-third of all global maritime trade) worth of trade cruising through its waters every year. Since this zone has emerged as one of the most dangerous flashpoints in the Indo – Pacific over the last decade, the transhipment here is rather unsafe, not mentioning the ecological disasters which are emerging currently there.
  • The Strait of Bab-El-Mandeb, one of the World’s Most Dangerous Straits (situated in the high conflict zone between Yemen and Somalia), is also the shortest trade route between the Mediterranean region, the Indian Ocean, and the rest of East Asia. Oil-rich Arabian Gulf nations rely heavily on it: approximately 57 giant oil vessels from these countries pass through the strait each day, over 21.000 each year. This fact makes the straight not only the zone of interests of main powers (and hence high tension in the region), but a big threat to the environment (oil spills).
  • The Strait of Hormuz is a strategically important strait or narrow strip of water that links the Persian Gulf with the Arabian Sea and the Gulf of Oman. As one of the busiest shipping lanes in the world, is also one of the most essential ones, due to the amount of oil tankers that navigate these waters daily. Around one third of the world’s oil is transported through this strait, making it essential not only for trade, but for the global economy. The same fact is making this route one of the most dangerous to the environment, considering existent oil spills or collisions.
  • The Suez Canal (Including Strait of Gubal) provides the shortest route between the Atlantic and Indian oceans (saves 7000 Km of extra travel). The 120-mile pass goes between Israel and Egypt and passes from the Red Sea to the Mediterranean Sea. 100 boats travel the canal daily and 3.9 million oil barrels travelled daily. Thus Around 8% of global sea-borne trade takes place through it. Despite the projects of Canal’s extension, it’ s waters are still congested, making the usage less safe, extending the time, and raising the costs of transhipments. 
  • Connecting the Atlantic Ocean and the Mediterranean Sea, the Strait of Gibraltar (including 20 nm either side of Europa Point) is one of the most used shipping routes in the world. The strait is only seven nautical miles (13 kilometres) across at its narrowest and 23.7 nautical miles (44 kilometres) at its widest. Approximately 300 ships cross it every day, about one ship every five minutes, which causes a high amplitude internal wave, upwelling of nutrient-rich water and affecting bio-life, not mentioning the noise pollution and heavy maritime traffic.
  • The Bosporus and Dardanelles Straits separate the Sea of Marmara from the Aegean and Black Seas. Both straights are on the Europe – Asia boundary and lie within Turkey. The Bosporus is located on the northern edge of the Maramara and southwestern edge of the Black Sea. Turkish Straits provide the only access between the Black Sea and the Aegean Sea. The Dardanelles, on the southern tip of the Marmara and north-eastern coast of the Aegean Sea (which is connected to the Mediterranean) is wider than its northern counterpart. More than 40,000 vessels are passing through these waters per year, transporting almost 650 million tons of cargo. Located in the conflict of the power’s interests, this zone has been always considered vulnerable in terms of safety, not mentioning significant damaging of local maritime bio life.

Thus, it can be traced that the current sea arteries of warm waters are not just seriously congested, but also dangerous not only for the ecology and because of security reasons (robbery, piracy etc), but also for the stable development of trade and economy. The consequences of these dangers may be fatal in few years, unless the measurements of improving the maritime transhipment infrastructure are not taken.

Thus, the cheapest in the cost, this transhipment line is not beneficial in terms of second criteria – timeframe (See Figure 1).

Another shipping line (cold water – blue line), which arose because of the rapid melting of the Arctic ice cap, opens prospects for the reduction of transport waterways in areas free of ice. Thus, it is another alternative to the main transcontinental routes that pass-through Eurasia, namely land rail (green line), air (white line) and warm southern waters of Eurasia and further to Africa through the Suez Canal (red shipping line). There are basically three possible routes, each of significance:

  • the Northwest Passage, connecting the American Continent and Far East Asia;
  • the Northern Sea Route, offering a shorter way from Europe to Asia along the Russian Arctic coastline; and
  • the Arctic Bridge, connecting Canada and Russia (See Figure 3).

Geographically the position of the North waterways is very beneficial. The Northwest Passage connects the Atlantic and Pacific along the northern coast of North America through the Arctic waters from the Davis straits and Baffin Bay all the way to the Bering Sea shortens the distance between Far East Asia and the American East coast (via Panama) by approximately 7,000 kilometres.

Figure 3. Northern shipping. Major transport routes through the Arctic

Source: Centre Port Canada, 2008.

The Northeast Passage, which connects the Atlantic coast of Western and Northern Europe with the Pacific coast of Northeast Asia via the Russian Arctic coastline, is cutting the distance between the edges of two continents, making it shorter by about 40% in comparison to the traditional, warm seas transport routes via the Suez or Panama Canal.

As it is highlighted in the analysis entitled “IFIMES for the Global Greening Economy (A Brief Impact Study)”, the Arctic Bridge is a seasonal route which shortens the connection between the North American and European continents via the Arctic Ocean. Observation shows that the transhipment route between the North Atlantic and the Pacific Ocean straight over the Central Arctic Ocean (the so-called Arctic Bridge) might be in reach earlier than expected due to climate change. In this case Iceland’s strategic position will change dramatically and could turn the island into an economic hub – a power base for transportation-related services, bringing along a whole new range of economic activities to the Europe.

Thus, in terms of logistics, the cold waters shipping line (blue – Northern sea or Arctic passage) will allow to deliver cargo to Europe by sea faster than the 48 days (that it takes on average) to travel from the Northern ports of the Far East to Rotterdam via the Suez canal, considering that the passage of a cargo ship from Shanghai to Hamburg along the North sea route is 2.8 thousand miles shorter than the route through Suez canal. (i.e., in 2019 the Russian Arctic gas tanker “Christophe de Margerie” reached South Korea from Norway without an icebreaker escort in only 15 days) (See Figure 1).

Another advantage, which play into the hands of the blue transhipment routes is the decrease of using of harmful to the environment material – cement. Building new land infrastructure (especially roads) requires cement, a material that contributes more than 6 per cent of global carbon emissions. Shifting the transportation mode to the sea, therefore, will reduce the amount of roads constructions on the land.

In addition to the time criterion, cold water shipping line is beneficial in terms of capability. It is usually characterized as the shortest sea route between Europe and Asia, the safest (i.e., the problem of Somali pirates) and has no restrictions on the size of the ship, unlike the route through the Suez Canal. Thus, the Arctic route will allow to deliver cargo to Europe faster by sea, reducing the route by 20 – 30%, and hence being more environment friendly (by using less fuel and decreasing CO2 emission) and saving human resources. Nevertheless, the capitalizing on that opportunity requires much work in terms of improved navigation procedure and installation of safety-related infrastructure.

Energy aspect

But the shortening of the transhipment routes and hence slight decreasing of CO2 emissions will not solve the problem completely. The global environmental issue of CO2 consumption should be treated starting from the main root of the problem and in regards with it, Arctic may play the key role.

The projects launched in the Arctic (i.e., project Yamal LNG) meets the goal of reducing the share of coal in total energy consumption in the world’s largest greenhouse gas emitters below 58% by the end of 2020, as this project allows to diversify countries’ energy sources, contributing to its withdrawal from coal use. This, in turn, reduces CO2 emissions within the country and may contribute to the implementation of the same scheme in the framework of the building of the transhipment routes.

The goal to reduce a dependence on coal and fossil fuels requires a huge surge in the use of natural gas, and the adoption of renewable energy. Which is resulting in not only infrastructure constrictions, but also the development of the projects connected with energy (See Figure 4). One of the key factors driving the implementation of this projects is that, unlike traditional fossil fuels, renewable energy sources are widely available around the world. Whether it is solar or wind power, tidal energy or hydroelectric plants, most countries have the potential to develop some clean energy.

Figure 4. Investments into the Renewable energy projects

Source: Boston University Global Development Policy Centre, 2019.

The region covered by new transhipment routes (esp. South – Eastern Europe, Eurasia and South – Eastern Asia covered by Eurasian transhipment lines) has significant potential to be powered by solar energy. Thus, it is estimated that less than 4 percent of the maximum solar potential of the region could meet the countries’ electricity demand for 2030 which gives the world a possible solution to reduce the countries’ need for fossil fuels as they develop.

Only in Europe, due to the implementation of renewable energy projects (i.e., Francisco Pizarro plant in Spain, Nikopol Solar Power Plant, Ukraine, Cestas Solar Farm in Bordeaux, France etc) the solar capacity increased by 36% to 8 GW in 2018. By 2020, several members stated in the European Union pushed to meet their 2020 renewable energy targets. 

Along with solar projects, wind onshore wind farms projects (i.e., southeast region of Ukraine, the Fantanele – Cogealac wind park, Romania etc) are also destined to meet increased national energy needs in the wake of phasing out fossil fuel power plants. Thus, the renewable energy potential and cooperation opportunities is a chance for the countries to leapfrog from their carbon-intensive trajectories to low-carbon futures.

Conclusions

Summing up, for now it can be seen that there are two possibilities for developing transport systems and economies in accordance with green standards:

  • Transcontinental railroad system (which requires huge amount of investments);
  • Optimization of the cheapest mode of transportation (maritime warm waters transhipment lines) (See Figure 3).

But while thinking on the best ways of the decarbonizing of transport connections between the most-producing countries of G-7 (Atlantic states and other European countries) with other advanced OECD economies, all the existing risks (such as “convenience”, roads “safety” (piracy, oil spills), water congestion levels and maritime traffic) should be considered. As it was mentioned above, warm waters transhipment lines (See Figure 1) currently present certain dangers, being high congested and unsafe (both for trade security and environment), and hence rather vulnerable. Due to this fact, it is crucial to consider other alternatives of connecting the biggest countries-producers (China) and countries-consumers (West Europe).

Statistical data on logistics proves, that the development of the cold waters (i.e., Arctic passage or blue line shipping line) route (See Figure 1) drastically reduce the time and distance between the largest G-7 producers and developed OECD markets. Nevertheless, though there is high potential to slash international shipping distances by opening shorter routes in the north, the high risks on these alternative routes are keeping most traffic running over the classic transport routes like the Suez and Panama Canals.

But when building and improving the continent’s logistics chains, it is also important to consider the standardization aspect along the One Belt One Road initiative.

Today countries of Eurasia, not including China, account for about 18% of global GDP and 26% of global carbon dioxide emissions. Current transhipment lines going through these countries are estimated to increase carbon dioxide emissions by at least 0.3% worldwide – but by 7% or more in some countries as production expands in sectors with higher emissions, unless the measures to decarbonize the initiatives are taking. The window for action is narrow: investment decisions made in the coming few years will determine the carbon intensity of critical infrastructure and major real-estate assets that will operate for decades. Thus, by linking policy, finance, and the international community’s expertise and technological resources, it is possible to lay the groundwork for low-carbon development in the countries’ economies. To ensure that development in the transhipment lines does not undermine the global climate agenda, meaningful steps must be taken to reduce substantially the carbon footprint of new investments in these economies. 

Analysing this issue, it is worth mentioning that the carbon dioxide emissions in developed countries have been in decline for over a decade and are at approximately the same level right now they were at 25 years ago, while the developing countries are experiencing an explosion in the growth of carbon dioxide emissions. This is explained by the fact, that developed countries achieved their development on the back of coal, which is now being phased out. On the other hand, developing countries are currently developing by using coal, and that is driving up their carbon emissions. It is also explaining the fact that developing countries are not willing to follow stated “greening” goals, since it will require higher financial costs and longer process of the project’s implementation.

To reach consensus in timing, price, and environmentally friendly standards the growing push to decarbonize economies, implement the green construction methods should be done. Unfortunately, this approach may take decades to be adopted, which our planet may not have. And the understanding of this fact should be the basis for the development of all countries without exception and the logistical development of the initiative “One Belt – One Road” in particular.

Dr. Maria Smotrytska is a senior research sinologist and International Politics specialist of the Ukrainian Association of Sinologists. She is currently the Research Fellow at International Institute for Middle East and Balkan Studies (IFIMES), Department for Strategic Studies on Asia. PhD in International politics, Central China Normal University (Wuhan, Hubei province, PR China) Contact information : officer[at]ifimes.org SmotrM_S[at]mail.ru

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Economy

2022: Rise of Economic Power of Small Medium Businesses across the World

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Why mirrors of the Wall: To fight obesity a life-sized mirror required, to uplift the national economy a simple calculator is a critical necessity. Only, right amounts in right columns, correctly totaled show a balanced picture. In the coming days, pandemic will become endemic; the same day, all over the world, nations will suddenly start announcing economic pandemic. Observe, lingering global economic chaos still masked hiding a troubled face.  As a proof, observe the absence of bold open economic strategies or real action plans.

Why lead, follow or get out of the way: Our hyper-digitized world has now openly exposed; meritocracy-centric and mediocrity-driven nations. In this global race, no nations are the same; but rules of engagement on productivity, performance and profitability and entrepreneurial behaviors are almost identical. If economic survival to save nations is critical, still why in most nations the tasks of economic development mandated to teams critically lacking the required entrepreneurial and job creator mindsets. Nations with mastery on national mobilization of entrepreneurialism will lead; others may follow or get out of the way.

Why the two wheels: What will it take for nations to immediately start upskilling their front line economic development teams on a fast track basis. How can they create real SME growth, teach the teams on real tactical battlefields to wrestle, and harness real entrepreneurialism. Otherwise, repeating already broken models under crypto-illusions speaks volume on core competency. A great future is unfolding for job seeker and job creator minds must come together as two wheels of the same cart on national economic development.

Why the wrong building: Study, why are ‘population-rich-nations’ growing in economic prosperity much faster than ‘knowledge rich nations’?  Why, if you bifurcate ‘developed nations’ and ‘emerging-nations’ the emerging nations are advancing much faster. Now, when you apply a basic calculator, the ‘SME of any nation’ in the world will save the national economies but not the ‘big-business of the nation’. Study more on Google, discover the reasons, and acquire your own knowledge on such new affairs. Most importantly, if these topics still not openly discussed in your surroundings you are already in the wrong building.

Why the triangulation: To triangulate, the mastery of ‘national mobilization of entrepreneurialism’ with national SME verticals and exportability will outline the blueprints to save national economies.  How will the rise of the small medium business economy not only create local grassroots prosperity but also make national citizenry happy and stable.

Why the needed adjustments: Understanding of local economic landscape; traditionally, despite being a small tax contributor, big business is allowed to stomp all over its own government, while the SME sector, the largest tax contributor of any nation, is crushed and neglected. Technology is changing this fast, SME of the world now have the tools once only available to large empires, global access reserved for large scale maneuvers now a new digitized world of micro-trade, micro-manufacturer and micro-exports will create a new tidal wave of global commerce.

Why the absence of calculator: What is stopping any political leadership to declare national mobilization of entrepreneurialism and identify IK to 1000K SME with USD$1 million to USD$10 million in annual turnover, on digital platforms of upskilling exporters and reskilling manufacturers and double or quadruple their growth in 1-2 years. Is it the absence of a calculator, domination of job seekers and non-entrepreneurial mindsets, or hidden fears of big business not allowing such massive uplift? The near future calls for digitized economies and upskilled citizenry, as basic perquisites for any functioning nation.

Why fears of the pie: Hence, the tremors in the global boardrooms and still little or no response on uplifting the tides of SME in various corresponding verticals around the world, for fears of upsetting the top leaders. Ask the big forbidden questions; why will super big players ever allow the emergence of many millions sleek, technologically advanced and global-age skilled SME to grow to only chip away their own power play and half of their pie? It may be true in some regions, but there are grassroots benefits in such advancements provided there are right mindsets and matching vision of the nation.

Why the two new forces: Hence, there exists the low-level mediocre SME economic development across the world, where lip service fills the gaps and academic studies create colorful charts and circles to point confusion and trade groups comply to remain in deep silence. The SME of the world will rise in economic power, across the world as a new world dawns. The power is already hidden in two unstoppable forces; first the technology and second the global connectivity of opinions and knowledge. Both combined now allows some 500 million SME to organize and billions displaced rejecting cubical slavery drawn into out the box entrepreneurialism. It is the easiest time across the world to dance on entrepreneurial platforms.

Why history repeats: On the course of history, no other experiment of human journey is as successful as that of Americans and how when some 100K entrepreneurs carved the image-supremacy of entrepreneurialism to last well over a century. During the same period in Europe and Asia followers of such out of the box thinkers were not only rejected by society, but also jailed as a liability to society. Nations must identify and create an ‘umbrella of entrepreneurialism’ to preserve and respect the drivers and proponents of such intellectualism and avoid such notions caught in fakery. Today Asia alone has created 500 million new entrepreneurs during the last decade. Ignoring this by any nation in the world  will simply sink them.

Why the alpha dreamers: The five billion connected alpha dreamers have learned new lessons during the last 500 days; they witnessed the handling of pandemic and are now ready to study the unfolding of global economic pandemic. They realize the serious limitations of old style administrations, the inequalities, the injustice and lack of skills to cope with futurism. Covidians, the survivors of the pandemic, now vote in some 100 national elections scheduled over the next 500 days. A new way of thinking is emerging. Every day the global news increasingly focused on self-inflicted disasters and absence of corrective new measures to advance for better grassroots prosperity.

Why the next elections: Any naivety on ignoring this post pandemic metamorphism will backfire during next national elections. The national public opinion has now turned into global opinion; the populace of one country supporting the populace of another country for being under influences of the populace in a third or fourth country. Last decade our local streets molded public opinion; today global streets are doing just that. Deeply study how five billion connected slowly are forming the largest mindshare ever assembled. How all this does translates to local/global issues and what level of expertise needed to tackle bigger issues.

Why the soft power assets: The biggest losses of the nations of today are not at all their accumulated debts but continuously having greater losses of missed opportunities on the global stage. The lack of inability to recognize the soft power of a nation today is way above just the notion of culture, politics and foreign policy; it is far more extended and about nation-building, upskilling citizenry and pursuing common good.

Why broken systems: When tax laws are universally broken,universally criticized but universally remain unchanged; when there is no single supreme power left as all deemed declared useless, therefore, this calls for a major change but not from the very top rather grows from the very bottom. When economic progress remains as number one priority, why is it that only job seekers drive such economic development programs while job creator mindsets are critically ignored? Bringing both mindsets closer as a mandated agenda will bring hidden magic to the goals.

Why the deep silence: Quick test on your local economic resilience: right now, what parts of such narratives are your local governments openly engaging and deploying?  What types and styles of small medium business mobilization are on the go?  What level of entrepreneurialism drives ever created under what agenda?  What is happening to upskilling and reskilling including women entrepreneurial drives? What level of authoritative analysis on the table to upskill current economic development teams?  If most of these issues are often not new funding dependent but mobilization hungry and execution starved, why are economic development teams so scared? Is your local economy prospering? Maybe you are already far ahead. Study on Google how Expothon is gaining global attention and tabling Cabinet Level workshops and virtual events on revival of the SME power as an immediately deployable strategy to save and uplift national economies. 

Why fears of facing clarity: Is this why economic development teams are so afraid?  Will such ideas alter government agencies and their mandates in the future? Is this how Meritocracy will drive out Bureaucracies? Is this where the new future of economic prosperity hidden? Is this how we will advance to catch up with lost time and opportunities?  Is this how nations will finally optimize already hidden talents in their national trade groups, chambers and governments to full capacity? Is this how we will eventually open new bold discussions on distribution of right intellectualism to fit the right needs of humankind?

Suddenly, how far has our world moved on; bandaged, stitched and altered in thinking, psyche damaged but still aware of common sense. Our understanding of humanity is perhaps now in search of common good. To liberate itself from strangle of old thinking, the SME economic development world urgently needs major adjustments to bring balance between job seeker mindsets with job creator mindsets. Start immediately with a quick test across the economic development departments and measure such imbalances. Study more on Google. The rest is easy.

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Economy

Can e-commerce help save the planet?

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If you have logged onto Google Flights recently, you might have noticed a small change in the page’s layout. Alongside the usual sortable categories, like price, duration, and departure time, there is a new field: CO2 emissions.

Launched in October 2021, the column gives would-be travellers an estimate of how much carbon dioxide they will be responsible for emitting.

“When you’re choosing among flights of similar cost or timing, you can also factor carbon emissions into your decision,” wrote Google’s Vice President of Travel Products, Richard Holden.

Google is part of a wave of digital companies, including Amazon, and Ant Financial, encouraging consumers to make more sustainable choices by offering eco-friendly filter options, outlining the environmental impact of products, and leveraging engagement strategies used in video games.

Experts say these digital nudges can help increase awareness about environmental threats and the uptake of solutions to reduce greenhouse gas emissions.   

“Our consumption practices are putting tremendous pressure on the planet, driving climate change, stoking pollution and pushing species towards extinction,” says David Jensen, Digital Transformation Coordinator with the United Nations Environment Programme (UNEP).

“We need to make better decisions about the things we buy and trips we take,” he added. “These green digital nudges help consumers make better decisions as well as collectively drive businesses to adopt sustainable practices through consumer pressure.”

Global reach

At least 1.5 billion people consume products and services through e-commerce platforms, and global e-commerce sales reached US$26.7 trillion in 2019, according to a recent UN Conference on Trade and Development (UNCTAD) report.

Meanwhile, 4.5 billion people are on social media and 2.5 billion play online games. These tallies mean digital platforms could influence green behaviors at a planetary scale, says Jensen.

One example is UNEP-led Playing for the Planet Alliance, which places green activations in games. UNEP’s Little Book of Green Nudges has also led to more than 130 universities piloting 40 different nudges to shift behaviour.

A 2020 study by Globescan involving many of the world’s largest retailers found that seven out of 10 consumers want to become more sustainable. However, only three out of 10 have been able to change their lifestyles.

E-commerce providers can help close this gap.

“The algorithms and filters that underpin e-commerce platforms must begin to nudge sustainable and net-zero products and services by default,” said Jensen. “Sustainable consumption should be a core part of the shopping experience empowering people to make choices that align with their values.”

Embedding sustainability in tech

Many groups are trying to leverage this opportunity to make the world a more sustainable place.

The Green Digital Finance Alliance (GDFA), launched by Ant Group and UNEP, aims to enhance financing for sustainable development through digital platforms and fintech applications. It launched the Every Action Counts Coalition, a global network of digital, financial, retail investment, e-commerce and consumer goods companies. The coalition aims to help 1 billion people make greener choices and take action for the planet by 2025 through online tools and platforms.

We will bring like-minded members together to experiment with new innovative business models that empower everyone to become a green digital champion,” says Marianne Haahr, GDFA Executive Director.

In one example, GDFA member Mastercard, in collaboration with the fintech company Doconomy, provides shoppers with a personalized carbon footprint tracker to inform their spending decisions.

In the UK, Mastercard is partnering with HELPFUL to offer incentives for purchasing products from a list of over 150 sustainable brands.

Mobile apps like Ant Forest, by Ant Group, are also using a combination of incentives and digital engagement models to urge 600 million people make sustainable choices. Users are rewarded for low-carbon decisions through green energy points they can use to plant real trees. So far, the Ant Forest app has resulted in 122 million trees being planted, reducing carbon emissions by over 6 million tons.

Three e-commerce titans are also aiming to support greener lifestyles. Amazon has adopted the Climate Pledge Friendly initiative to help at least 100 million people find climate-friendly products that carry at least one of 32 different environmental certifications.

SAP’s Ariba platform is the largest digital business-to-business network on the planet. It has also embraced the idea of “procuring with purpose,” offering a detailed look at corporate supply chains so potential partners can assess the social, economic and environmental impact of transactions.

“Digital transformation is an opportunity to rethink how our business models can contribute to sustainability and how we can achieve full environmental transparency and accountability across our entire value chain,” said SAP’s Chief Sustainability Officer Daniel Schmid.

UNEP’s Jensen says a crucial next step would be for mobile phone operating systems to adopt standards that would allow apps to share environment and carbon footprint information.

“This would enable people to seamlessly calculate their footprints across all applications to develop insights and change behaviours,” Jensen said. “Everyone needs access to an individual’ environmental dashboard’ to truly understand their impact and options for more sustainable living.”

Need for common standards

As platforms begin to encode sustainability into their algorithms and product recommendations, common standards are needed to ensure reliability and public trust, say experts. 

Indeed, many online retailers are claiming to do more for the environment than they actually are. A January analysis by the European Commission and European national consumer authorities found that in 42 per cent, sustainability claims were exaggerated or false.

To help change that, UNEP serves as the secretariat of the One Planet network, a global community of practitioners, policymakers and experts that encourages sustainable consumption and production.

In November, the One Planet network issued guidance material for e-commerce platforms that outlines how to better inform consumers and enable more sustainable consumption, based on 10 principles from UNEP and the International Trade Centre.

The European Union is also pioneering core standards for digital sustainability through digital product passports that contain relevant information on a product’s origin, composition, environmental and carbon performance.

“Digital product passports will be an essential tool to strengthen consumer protection and increase the level of trust and rigour to environmental performance claims,” says Jensen. “They are the next frontier on the pathway to planetary sustainability in the digital age.”

UNEP

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Economy

2022: Small Medium Business & Economic Development Errors

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Calling Michelangelo: would Michelangelo erect a skyscraper or can an architect liberate David from a rock of marble? When visibly damaged are the global economies, already drowning their citizenry, how can their economic development departments in hands of those who never ever created a single SME or ran a business, expect anything else from them other than lingering economic agonies?

The day pandemic ends; immediately, on the next day, the panic on the center stage would be the struggling economies across the world.  On the small medium business economic fronts, despite, already accepted globally, as the largest tax contributor to any nation. Visible worldwide, already abandoned and ignored without any specific solutions, there is something strategically wrong with upskilling exporters and reskilling manufacturers or the building growth of small medium business economies. The SME sectors in most nations are in serious trouble but are their economic development rightly balanced?   

Matching Mindsets: Across the world, hard working citizens across the world pursue their goals and some end up with a job seeker mindset and some job creator mindset; both are good. Here is a globally proven fact; job seekers help build enterprises but job creators are the ones who create that enterprise in the first place. Study in your neighborhoods anywhere across the world and discover the difference.

Visible on LinkedIn: Today, on the SME economic development fronts of the world, clearly visible on their LinkedIn profiles, the related Ministries, mandated government departments, trade-groups, chambers, trade associations and export promotion agencies are primarily led by job seeker mindsets and academic or bureaucratic mentality. Check all this on LinkedIn profiles of economic development teams anywhere across the world.

Will jumbo-pilots do heart transplant, after all, economic performance depends on matching right competency; Needed today, post pandemic economic recovery demands skilled warriors with mastery of national mobilization to decipher SME creation and scalability of diversified SME verticals on digital platforms of upskilling for global age exportability. This fact has hindered any serious progress on such fronts during the last decade. The absence of any significant progress on digitization, national mobilization of entrepreneurialism and upskilling of exportability are clear proofs of a tragically one-sided mindset.

Is it a cruise holiday, or what? Today, the estimated numbers of all frontline economic development team members across 200 nations are roughly enough to fill the world-largest-cruise-ship Symphony that holds 6200 guests. If 99.9% of them are job-seeker mindsets, how can the global economic development fraternity sleep tonight? As many billion people already rely on their performances, some two billion in a critical economic crisis, plus one billion starving and fighting deep poverty. If this is what is holding grassroots prosperity for the last decade, when will be the best time to push the red panic button? 

The Big Fallacy of “Access to Finance” Notion: The goals of banking and every major institution on over-fanaticized notions of intricate banking, taxation are of little or no value as SME of the world are not primarily looking for “Access to Capital” they are rather seeking answers and dialogue with entrepreneurial job creator mindsets. SME management and economic development is not about fancy PDF studies of recycled data and extra rubber stamps to convince that lip service is working. No, it is not working right across the world.

SME are also not looking for government loans. They do not require expensive programs offered on Tax relief, as they make no profit, they do not require free financial audits, as they already know what their financial problems are and they also do that require mechanical surveys created by bureaucracies asking the wrong questions. This is the state of SME recovery and economic development outputs and lingering of sufferings.

SME development teams across the world now require mandatory direct SME ownership experiences

The New Hypothesis 2022: The new hypothesis challenges any program on the small medium business development fronts unless in the right hands and right mindsets they are only damaging the national economy. Upon satisfactory research and study, create right equilibrium and bring job seeker and job creator mindsets to collaborate for desired results. As a start 50-50, balances are good targets, however, anything less than 10% active participation of the job creator mindset at any frontline mandated SME Ministry, department, agency or trade groups automatically raises red flags and is deemed ineffective and irrelevant. 

The accidental economists: The hypothesis, further challenges, around the world, economic institutes of sorts, already, focused on past, present and future of local and global economy. Although brilliant in their own rights and great job seekers, they too lack the entrepreneurial job creator mindsets and have no experience of creating enterprises at large. Brilliantly tabulating data creating colorful illustrative charts, but seriously void of specific solutions, justifiably as their profession rejects speculations, however, such bodies never ready to bring such disruptive issues in fear of creating conflicts amongst their own job seeker fraternities. The March of Displaced cometh, the cries of the replaced by automation get louder, the anger of talented misplaced by wrong mindsets becomes visible. Act accordingly

The trail of silence: Academia will neither, as they know well their own myopic job seeker mindset. In a world where facial recognition used to select desired groups, pronouns to right gatherings, social media to isolate voting, but on economic survival fronts where, either print currency or buy riot gears or both, a new norm; unforgiveable is the treatment of small medium business economies and mishmash support of growth. Last century, laborious and procedural skills were precious, this century surrounded by extreme automation; mindsets are now very precious.  

Global-age of national mobilization: Start with a constructive open-minded collaborative narrative, demonstrate open courage to allow entrepreneurial points of views heard and critically analyze ideas on mobilization of small mid size business economies. Applying the same new hypotheses across all high potential contributors to SME growth, like national trade groups, associations and chambers as their frontline economic developers must also balance with the job creator mindset otherwise they too become irrelevant. Such ideas are not just criticism rather survival strategies. Across the world, this is a new revolution to arm SME with the right skills to become masters of trade and exports, something abandoned by their economic policies. To further discuss or debate at Cabinet Level explore how Expothon is making footprints on new SME thinking and tabling new deployment strategies. Expothon is also planning a global series of virtual events to uplift SME economies in dozens of selected nations.

Two wheels of the same cart: Silence on such matters is not a good sign. Address candidly; allow both mindsets to debate on how and why as the future becomes workless and how and why small medium business sectors can become the driving engine of new economic progress. Job seekers and job creators are two wheels of the same cart; right assembly will take us far on this economic growth passage. Face the new global age with new confidence. Let the nation witness leadership on mobilization of entrepreneurialism and see a tide of SME growth rise. The rest is easy.

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