Latest from Birmingham Post business...
Being ahead of the game in business requires constant innovation. The problem is in being able to stay in front.
The corporate world is replete with businesses which were the radical innovators of their day and which found that success brings with it the need to rapidly expand and then find that more effort is being expended on managing the organisational system than in finding the next great thing.
There is no easy answer to ensuring that you can remain innovative and creative and, perhaps, the trick is to simply to do what many businesses do and wait for others to launch a new product. If they are successful you simply emulate (without copying) what they do.
In the early stages really radical innovations can often attract a premium price; think of the first video or DVD players. To enter the market you need to offer customers something cheaper which will mean that you will operate on reduced profit.
But if customers are offered an alternative that gives them the same (or possibly more) for less money there is a strong incentive to switch. This is dilemma currently facing Apple. Customers are increasingly asking why they should buy an expensive iPhone when much less expensive substitutes are available.
This process usually takes time and there is at least some warning. So, what happens if a competitor offers something that almost literally appears from nowhere and, to use the jargon, is a 'game-changer'?
In the March edition of the Harvard Business Review authors Larry Downes and Paul Nunes considered precisely this scenario; what they call 'Big-Bang Disruption'.
The fall from grace last year of Chinese leader Bo Xilai, followed by the trail, conviction and sentencing of his wife for the murder of British business man Neil Heywood all threw a very powerful, albeit momentary, light on the working of the Chinese legal and judicial system. The trial of Bo himself, later this year, may well repeat this process - if the authorities there permit it.
News that a consortium of three investors was looking at buying Sever Trent sent the firm's shares up by 14% this week. The potential investors include a Canadian infrastructure firm Borealis (ultimately owned by the Ottawa Local Government Retirement Scheme), the Kuwait Investment Office (the UK branch of Kuwait's Sovereign Wealth Fund), and the Universities Superannuation Scheme here in the UK.
Borealis already owns stakes in High Speed 1, Scotia Gas and Associated British Ports, while the Kuwait Investment Office has investments of over £15bn in 100 UK listed companies, along with a stake in Gatwick airport.
Today Severn Trent rejected the initial approach, stating that "a conditional proposal was tabled by the consortium at only a modest premium to the share price before the announcement of May 14. The board of Severn Trent has reviewed the proposal with its advisers and concluded that it completely fails to recognise the existing and potential value of Severn Trent."
The comments that are believed to be contained in a report to be published this week by the prime minister's aide of enterprise Lord Young have excited some controversy.
For example, he has commented that if you are in business and your competitors go bankrupt (he used the expression "fall by the wayside"), it allows those businesses who are efficient to increase their market share.
Many might believe that this is simply commonsense.
Let's face it if you can incubate an idea and make it work in the current economic environment then it should be in good shape when the climate becomes more benign.
However, some have seized on Lord Young's comments as being indicative of a culture in which it becomes acceptable to exploit those who are weakest. He has stated his belief that if "factors of production" become cheaper this will allow a greater return on investment.
As critics point out, business failures result in job losses which bring misery. Additionally they stress that the factors of production which become cheaper will include wages paid to workers which will have a knock-on effect in terms of standards of living.
When it comes to exporting there is no doubt that the West Midlands region is still reliant on the European and US markets. Having said that, many local companies are leading the way doing great business further afield and this trend needs to gather pace quickly.
Whilst developed economies are still struggling with financial uncertainty and slow recovery, emerging markets are undergoing rapid growth.
These high growth markets are changing the face of international business - it is the growing economies which offer today's, and more importantly tomorrow's opportunities. With so many millions of potential new customers, low-cost communications, and improving infrastructure, these markets are very appealing to firms looking to expand their operations.
But the time for West Midlands companies to act is now. By waiting too long, businesses will allow competitors to build a presence and market share in those areas, making it more expensive to commit resources and more difficult to compete effectively when they finally decide to take the plunge.
At UKTI we know that striking out into new and unfamiliar markets can be daunting, but many more regional companies could and should be taking advantage of the opportunities these markets offer. That is why we are hosting Export Week (13 -17 May) - a week dedicated to high growth markets.
Export Week is designed to help the region's businesses explore those markets and countries which perhaps aren't so obvious and to show how we can help firms reach them. We have put together a programme of events and activities that will inspire firms to think about exporting to Brazil, China, Singapore and the Middle East to name just a few. Events will take place across the region and offer something for both the novice and experienced exporter - from seminars and master-classes, to networking events. We also have events around some of our strongest developed markets in the USA and the Nordic and Baltic countries.
The past year has been challenging for many of the region's companies, but I strongly believe that almost any firm can export its products and services, whether they are a single-owner operation, an SME, a mid-sized business, or a large corporation.
Come and join UKTI at one of our many regional events during 13-17 May, to find out more about these countries and how we can help your business grow by exploiting the opportunities they offer. I encourage you to seize the challenge - aim high and act now.
You can find out more about Export Week events in the West Midlands at www.exportweek.ukti.gov.uk and follow #exportweek
David Bowie is undergoing something of a renaissance caused by the fact that there is an exhibition of his stage outfits at the Victoria and Albert Museum in London for which tickets are like 'gold dust'.
For those not able to get a ticket you can always listen to his back catalogue especially his hugely influential 1972 album The Rise and Fall of Ziggy Stardust and the Spiders from Mars which includes the opening track 'Five Years'.
'Five Years' is a typical Bowie ballad in which there is a suggestion that within this period the earth would be doomed to destruction.
Given that Britain was at that time in a pretty dystopian state with industrial conflict and an existential threat from nuclear war with the Soviet Union there may have been many who would have agreed with the sentiments of 'Five Years'.
It is just over five years since the beginnings of the global financial crisis and, coincidentally, that is the maximum period of an English Parliament. As we know, the impact of the crisis are still very apparent it would seem that we are not yet at the point at which our economy can be considered to have fully recovered.
Last Thursday's local elections provide an early, though I accept, limited snapshot of the way that the main parties will performs and much analysis will be made of the economic policies offered by each of the main parties (which may now include UKIP) for ensuring consistent growth. And they will all be considering development of economic strategies for the five years following the next general election.
The thing is, our current situation does not give allow us to be tremendously optimistic.
If you were to pay attention to the wilder enthusiasms of the popular press you might be led to believe that the threats to our traditional way of life from the depredations of health and safety were far greater than the economic upheaval being wrought by more obvious factor such as the flat-lining here and the changing world scene led by developments in China.
I'm just old enough to remember the impact that George Best had on the game of football in Britain in the late 1960s.
Though Best was seen as possessing sublime talent, his showmanship and desire to engage in a hedonistic lifestyle was seen as not right. Football had typically been viewed as a game largely watched by the working class who supported local teams consisting of players who came from the community.
Best, a Belfast lad, though not exceptional in coming from outside the area, was a prototype celebrity footballer; he was sometimes referred to as 'the fifth Beatle'.
As many recognised, British football was changing. Earlier in the decade, January 18th 1961 to be exact, the maximum wage of £20 a week had been abolished. As many have since argued, this was the start of British football - and especially players - losing touch with its fans.
In 1961 the average weekly wage was £17. Though wages earned by footballers steadily increased after the abolition of the maximum wage, Sky TV's decision in 1992 to televise games vastly accelerated the earning power all footballers; particularly those in the Premier League who now typically earn over £35,000 a week.
Football became a game in which ever-increasing amounts of money was invested into securing the best players to ensure an ability to achieve continued success. This means that more and more money needs to be raised in order to pay higher and higher wages.
The consequence has been that now very few teams can effectively compete to win the Premiership.
There is an adage which says that you can make a small fortune in football; provided you start with a large fortune.
After Regional Development Agencies were scrapped by the Coalition government in 2010, smaller scale Local Enterprise Partnerships (LEPs) were set up - effectively as partnerships between local authorities and business.
But those LEPs are now suffering from a lack of confidence, confusion and short-termism, the all-party House of Commons Business, Innovation and Skills Select Committee warned last week in a hard hitting report which is well worth a read (you can read it here).
In particular, the funding of LEPs was sharply criticised in the Committee's report, which argues that this undermines efforts to revive the economy.
This is not untended to be a rhetorical question and is borne out of last week's news that an economic model which has been used as the basis for deficit reduction has been shown to have been based on spurious data and calculations.
This model, based on the work of Harvard Professors Carmen Reinhart and Kenneth Roghoff (who used to be the Chief Economist at the International Monetary Fund), was believed to demonstrate that once public debt exceeds 90% of GDP any growth slows down dramatically.
For those who wish to impose austerity as the justification for cutting public expenditure Reinhart and Roghoff's research was academic validation. Who could argue with a model that was based on sound logic and valid data.
In their 2009 book This Time It's Different (published by Princeton University Press) drew upon extensive historical research to prove the fallacy of increased borrowing.