The web economy blog

What’s the Latest Development?

Another attempt to make a go of using the power of the web to create an economy of “micro-payments” whereby individuals and corporations could charge tiny sums for their content. Flattr, a micropayment startup founded by Pirate Bay co-founder Peter Sunde, is preparing to launch a new feature that will combine its payment system with Twitter, and allow any Flattr user to send money to someone via their Twitter name.

What’s the Big Idea?

Could this help launch a “tip jar” system that actually works on a large scale and transforms the online content industry in much the same way The Pirate Bay disrupted it, but for the better? Or will it just be the latest failed micropayment startup? Since there aren’t any of the physical restrictions on money and transactions that occur in the real world this kind of micro-economy should work quite well. The only problem is that it never has.

The global economy is likely to fuse on its recovery from the global economic meltdown as reported by the International Monetary Fund (IMF) Deputy Director, African Department Mr.Saul Lizondo. He mentioned about this economic recovery plan during the launch of IMF’s Semi-Annual Sub-Saharan African Regional Economic Outlook held in Lagos.

Lizondo told that Sub-Saharan African’s economic recovery from the crisis-induced delay is going fine and under the way, with growth in most countries now back fairly close the high levels of the mid-2000s. As accord to Lizondo, “The main recovery remains multi speed 6.5% growth in emerging market and two and half  per cent growth in AE; four and half  per cent global growth”.

He put in plain words that evidence of the economic recovery is borne out by high frequency data, noting that after an inventory acceleration-slowdown cycle activity seems poised to re-accelerate in 2011.

Abebe Selassie, Regional Studies Division chief added that the severity of the shock imparted by the financial crisis and the global recession that followed, after a brief hiatus, output expansion in most countries in sub-Saharan Africa has returned to the high precrisis levels.

Selassie said “with the advent of another sharp increase in food and fuel prices, the resilience exhibited by the region during the last few years is about to be tested again. The price shocks (coupled with the recovery) are likely to lead to higher inflation in most countries and to deteriorating current account deficits in a number of fuel importers”.

Permanent Secretary, Federal Ministry of Finance, Mr. Danladi Kifasi assuredly said the Nigerian economy and that of the sub-Saharan region will continue to be strong and resilient.

Kifasi, who represented the Minister of Finance Mr. Olusegun Aganga said “the policies we are implementing are targeted at ensuring the sustainability of that growth as well as building it on a strong and diversified foundation.”

Speaking on Nigeria’s revenue base, he disclosed  plans by Government to diversify revenue base away from oil and gas by broadening the tax base adding that the Government is determined to bring the budget back to balance through the enhancement of revenues and by increasing the efficiency of its expenditure.

He said, “we will achieve this by modernizing and improving the efficiency of tax framework” IMF, in a statement  “the overall sanguine picture must be judged alongside still lingering dislocations from the global financial crisis. The region’ progress toward the poverty reduction Millennium Development Goals has been delayed by rising unemployment and the impact of the 2008 spike in food and fuel prices”

“With strong growth and rising inflation pressures, the broad direction of fiscal policy in most countries should be moving away from the supportive stance of the last few years. Nevertheless, fiscal support to poor households hit by rising food prices will need to be accommodated in some countries”.

In a statement, IMF clearly stated that economic policy remains looser than desirable in many low income countries or economically backward countries in the region, even before the recent heave in food and fuel prices. The IMF statement also states that “To counter incipient inflationary pressures, monetary policy will need to be tightened, particularly where growth has already regained pre-crisis level.”

So let us wait and watch the progress and the outcomes of this global economic recovery plan. It may help the World Economy in a way or other.

It is not unusual for the American Heritage Credit Union in Philadelphia to get 500 resumes for a job advertisement, reports CBS News senior business correspondent Anthony Mason.
But business is growing, the company is taking: tellers, managers and assistant vice-president.

“We potentially could bring in 38 new positions by the end of the year,” said Flora Caranac with American Heritage.

Economist Ellen Zentner said when you base it off the last three months of data; it looks like the economy is getting some momentum on job growth.

“We’ve had the unemployment rate drop a full percentage point very quickly over just four months and that’s nearly unprecedented,” Zentner said.

In February, employment increased in 35 states. The biggest overall growth coming in California, Pennsylvania, Florida, Texas and Illinois.

But more than 6 million Americans have been unemployed now for six months or more, like Marianne Gannon, a former sales manager with Mastercard. She’s joined a job search group in Westchester County, New York.

Gannon, who has been out of work for 15 months, thinks there’s a bias against people who have been out of work for a long time.

“I applied one night to a particular company on their website,” Gannon said. “And two and a half minutes later I got an email saying ‘Thank you very much. We’ve reviewed your application and resume and we do not feel it is a fit.’”

On job web sites we found repeated postings for sales and management positions that required applicants to be “currently employed.” CBS contacted four firms for an explanation but none replied.

“Even friends or neighbors or whatever around here – they’re like, ‘you’re still out of work?’ It’s like what don’t you understand? The job market stinks,” Gannon said.

The new study, UCLA and the State University of New York at Stony Brook, the researchers found evidence of a trend towards the unemployed, according to a report that is often marked, even if they are voluntarily leaving a position.

Craig Alexander, senior vice president and chief economist at TD Bank Financial Group, recently spoke with members of the business community and local politicians in the framework of the 6th edition of the Economic breakfast.

By Lindsey Cole/The Oshawa Express

Flooding. Earthquakes. Tsunamis. Political instability. A recession.

Put all of these ingredients together and you have a recipe for a global economy that is facing some significant challenges.

But, believe it or not, the world is beginning to rally, with Canada fairing incredibly well in the mix, says Craig Alexander, senior vice president and chief economist for the TD Bank Financial Group.

He spoke to a group of local members of the business community as well as City staff and councilors at the 6^th Annual Economic Outlook Breakfast, put on by the City of Oshawa.

During his speech he highlighted several areas of improvement and the challenges that are facing the world, North America and the local economy.

He says it’s a tangled web and Canada’s success depends largely on the rest of the world.

“It was a severe recession,” he says of the 2009 economic downturn. “People didn’t know how bad the recession was going to be. People didn’t see a light at the end of the tunnel and if they did they thought it was a train.”

But, he says, overall countries are rebounding well and though a natural disaster can be seen as a setback, the tsunami in Japan will not completely decimate the country.

In North America imports will be affected for a short time when it comes to automobiles and technology but overall, things will rebound.

“The rebuilding will actually stimulate economic growth,” Alexander says of Japan. “The economic conditions are improving (on the whole). It’s a very positive outlook. Having said that, it’s a very risk filled environment. There are some very big challenges out there.”

Those challenges include inflation, the cost of food, oil prices and countries facing large deficits.

When it comes to food prices, nature is again to blame.

“Food prices have soared. There just isn’t that much food in the food we buy. An awful lot of it is the marketing, the packaging,” he says, adding prices soared six to eight per cent year over year. “The story is mother nature.”

But when it comes to oil prices, political unrest in the Middle East is the cause and it is cause for concern. Alexander says that is driving oil costs up and the worry is that the unrest will spread to large oil companies in large countries like Saudi Arabia.

“It’s a low probability that we’re going to have an oil shock,” he says, adding it’s something they are keeping an eye on. “If things cool down in the Middle East then you will see oil prices go down.”

Closer to home, the United States is beginning to rally, despite the housing crisis. This, in turn, is benefiting Canada.

“It (the Canada) just chugged along. It’s now recovered all the ground it lost. The U.S. is still in a hole, it’s still got a long way to go but there’s no question that it is improving,” he explains.

“Before Americans were spending like drunken sailors. Consumers have been going without for about two years.”
He says two million jobs were created in 2011 in the U.S., but the jobs lost during the recession amounted to 8.7 million. It shows a slow but steady growth rate, he adds.

When it comes to Canada and the local economy, Alexander says the nation is doing well.

“There was nothing fundamentally wrong with Canada. We were hit with a massive external shock,” he says. “Canada was chugging along nicely when it was sideswiped.”

He says locally Oshawa struggled on the manufacturing side of things, but as the country began to rebound so did Oshawa as car sales ramped up and jobs were created.

However, he adds that while Canada has managed to get most of the jobs back numerically, they went to different areas.

“The jobs haven’t been created in the places that lost them.”

It has moved to service jobs and for Durham that has meant huge improvements.

“The GTA is very competitive. The GTA is very robust. The region as a whole is very strong,” he says. “When you get in the Durham Region it gets a little more diversified.”

He says the GTA unemployment rate is 8.3 and Oshawa is 8.9, so Oshawa is still higher, but Oshawa’s plan is in the right direction, focusing on skilled labour, competitive taxes, retraining and building infrastructure.

“There are still a lot of people out there that need our support,” he says.

“The economy is fundamentally changing. It’s becoming a knowledge-based economy.”

A study by the World Bank published reports Thursday that the online gaming industry has become a company of 3 billion U.S. dollars offered wages to migrant workers in Asia to play all day, raise money virtual and sold to wealthy clients in the Western world for real money.

The report also highlights a new industry in which companies seeking to increase the popularity of its brands to pay low-skilled workers abroad to become his followers to Facebook or Twitter followers.

The study “Knowledge Map of the virtual economy,” World Bank is the first look in depth the impact of online gaming and social media in the developing world. The report was prepared by infoDev, an organization financed by donors to the bank. Lehdonvirta Vili, co-author, said that the bank should not pay the money in the industry because he said the dealmaking violates some of the terms of game publishers and service is cheating.

Known as “gold farming,” the game-playing profession took off in the early 2000s with games such as World of Warcraft and has become a complex industry.

Low-educated laborers in Asia spend hours each day advancing through levels of an online game, picking up gold, swords and gems that enhance a player’s status. Then gaming studios, which employ the players, sell those virtual goods to online retailers. Finally, the retailers sell those items to more than 120 million players worldwide, many of them in North America and Europe, who are unwilling to play the games all day to gather the items on their own.

The bank’s report indicates that online gaming has a positive impact in Asia because 70 percent of the industry’s revenue remains in the gaming countries, with most of that money going to the gaming studios. Compared with the $70 billion coffee market — in which only a small fraction of the revenue remains in the bean-growing countries — gaming has a “much better development impact,” the report concludes.

The report also includes a survey of 26 players and studio managers that offers a rough, yet rare demographic look at their lives: Most of the players work out of studios in China, in Beijing or Changsha, the capital of Hunan province. They earn an average wage of $2.70 an hour, one dollar more than Beijing’s minimum wage for part-time factory work.

“The larger point is that online gaming is often viewed as exploitation. Certainly it’s not a dream career, but the players’ earning is not at sweatshop levels,” Lehdonvirta said.

The gaming studios keep about two-thirds of the industry’s $3 billion in revenue. “Previous studies presumed that the players sold the goods, but that’s not true,” Lehdonvirta said. “If you’re a rural online game player in China, you have no way of setting up a Web site and developing a customer database, and maintaining customer relations.”

The report also focused on a trend in which companies pay low-skilled workers in India, Bangladesh and the Philippines to “like” their Facebook fan pages or become a follower of that company on Twitter. The practice inflates a brand’s popularity.

Twitter regularly suspends accounts created only to follow others. Sean Garrett, a company spokesman, wrote in an e-mail: “We’ve seen numerous instances wherein the accounts that are bought are later suspended. . . leaving the company with few followers and no recourse.”

Facebook spokesman declined to comment on. Site rules allow companies to offer coupons, for example, people, if “as” a page of ads across Facebook.

The British government should e-privacy at the international level, together with EU partners and the United States, the Communications Minister Ed Vaizey said.
In his speech, the CBI Forum on e-privacy and digital economy, Vaizey said the Internet must be potted “lightly regulated driven.

But he said similar privacy standards were emerging from current regulation and new legislation in Europe and the US.

Unlike traditional television and radio publishing, Vaizey said the internet did not respect national boundaries. And he said: “The rules governing on-line privacy need to reflect that.”

“For the sake of web users and businesses we need a unified and consistent approach to on-line privacy that crosses borders.”

US regulation under a forthcoming ‘consumer bill of rights’ was said to be “not that different” from European data protection and e-Privacy directives, and Vaizey said countries should work together.

Creating an international standard to ensure the privacy of online business to compete on an equal footing, in which Web users enjoy the same protection that is based on the site. “

A web design company that closed last week, more than 17 million federal tax liens, and a lawyer for the company, said Tuesday that contributed to his decision to “relax” its operations.

HIT Web Design, also known as Heritage Web Design, unexpectedly closed its doors on March 8, with little attention to employees or customers. Provo attorney Sonny Olsen said HIT was unable to meet existing obligations and outstanding “because of the economy and levy a tax dispute.

“HIT made the most reasonable and prudent decision that it could given what the recession has done to this company and the industry,” Olsen said.

The Internal Revenue Service filed four tax liens on HIT Web Design’s property in Provo from Oct. 25 to Nov. 8, according to Utah County Recorder’s Office records.

The company also is known as Heritage Internet Technologies and Heritage Web Solutions.

HIT was contesting the liens “well in advance of the company dissolving, and [the tax liens are] making it impossible to resolve the wage claims and liability claims while it is pending,” Olsen said. “So HIT Web Design is working with IRS to resolve these issues.”

The company also is “evaluating its position” to try to address other liabilities, he said.

“HIT is well aware of the wages owed to employees at the time of HIT, and management intends to pay for these requirements to the extent that it has power,” Olsen said in a statement.

Colorado web designers Madwire Media, the fastest growing web design company in Colorado, brought six million U.S. dollars in the northern Colorado economy in 2010 and forecasts in addition to fifteen million in 2011.

With unemployment still high and a fragile economy, companies left and right have had to close their doors or lay off employees to stay afloat. CNN Money Magazine reported that unemployment has remained above 9% for 21 consecutive months, and economists and politicians, including Fed Chairman Ben Bernanke, have said repeatedly that is likely to remain high in coming years.

Even amid this broken economy, Colorado’s largest web design firm with local, national and global clients, Madwire Media, grew from five to over forty employees in 2010 and plans to add 35 more to the staff by the end of 2011. With this growth, Madwire Media impacted the Northern Colorado economy by six million dollars last year. The reason for such growth is because they put great focus on phenomenal customer service, modern design, efficient development, and marketing that drives results at incredibly low rates.

At this rate, it is forecasted that Colorado web design firm Madwire Media will add an additional fifteen million dollars to the local economy in 2011. This brings a positive light to a not-so-positive economy. Madwire Media is obviously doing it right, and their integrative and non-traditional approach to business probably has a lot to do with it.

Madwire Media is not your unfortunately typical poor service, email only, slow turnaround time, under-delivering web design and internet marketing company. In fact, they pride themselves in being the complete opposite of that. They eat, sleep and drink great service, design, marketing, and affordability. They never leave their clients hanging out to dry, under-serviced, and unsatisfied. Madwire Media is outperforming in the current market, helping to stimulate the economy by bringing in new money nationally and locally.

Madwire Media does everything in their power to help their clients reach their goals, within their budget, and build their business. When it comes to internet marketing and design, they do it all.

His business approach is refreshing and encouraging today’s economy and the media Madwire is sure to create plenty of buzz in the market this year. With its innovative web site design, SEO marketing to inbound, brand identity, and social media, which seem to do anything, and do well.

Ontario East has launched the first collaboration of its kind, with the regional web portal that uses social media to reveal the innovative initiatives underway in the community and show the world that Ontario is more creative eastern corner of Canada.

“This site is a way to introduce, in one place, all activities taking place in eastern Ontario to build a creative economy,” Stephen Paul President of the Ontario East Economic Development Commission (Ontario East).

Eastern Ontario focuses on the enlargement of a creative economy on the fact that rural areas of this type, including small towns and cities are less likely to benefit from the headquarters or expanding manufacturing.

“The real economic growth in these areas is going to come from entrepreneurs and small businesses employed in the creative economy, those individuals who are paid to solve problems, use their intellectual capacity and collaborate,” says Paul.

The new portal will display social media posts from as many as 20 communities, detailing their hottest creative economy activities in real time. It also provides links to each community’s website.

The portal’s design is based on the concept that continuously updated, fresh content will boost the site’s Google ranking and Internet presence. This will make it easier to find Ontario East online and raise the profile of the myriad of activities occurring in the region that are contributing to the creative economy. This higher profile should help attract and retain more creative economy entrepreneurs.

Creative economies are defined as ones in which people are paid to think using ideas, analytical skills, innovation, knowledge, and collaboration, and in which the nature of work moves from routine-oriented jobs to creativity-oriented jobs. In Ontario, the creative economy employs 35 per cent of the workforce yet pays 51 per cent of wages. Jobs in the creative economy tend to pay twice that of the next wage category.

There are many advantages to developing a creative economy: creative economies cross all sectors, there are low barriers to entry, and there are high growth trends. They are also human capital intensive, which works well for Ontario East and its highly educated and skilled workforce.

“When people think of the word ‘creative,’ they tend to think it’s about artists and musicians. It’s much broader than that. It’s about architects just as much as it’s about programmers and artists and potters. It’s beyond bohemians and includes real estate, insurance, brokers, stocks, and more,” says Dan Taylor, Ontario East’s Creative Economy Sector Team Lead.

“A creative economy asks us to look at the economy a little differently. We usually think about sectors in economics. Creative economy doesn’t address sectors; it focuses on people, creative workers – people who are paid to think. Their job is to solve problems and come up with creative solutions,” Taylor adds.

Creative industries can include advertising, business consulting, design, education, engineering, film, gaming, healthcare, heritage, marketing, fine arts, public relations, and software development, among other industries.

The Ontario East Economic Development Commission, also known as Ontario East, was one of Canada’s first regionally-based economic development commissions when it formed in 1988. Its new site is an example of the collaborative nature of its communities to pull together toward a common vision.

Eastern Ontario consists of 124 regional economic enlargement professionals and entrepreneurs who work together to promote the business’s leading position in the area. Association represents more than 200 communities, thousands of companies, and nearly two million inhabitants.

During the past 12 months and despite the limited conditions of economic exchange, the property group JHI services has remained high occupancy rates in commercial properties under management, with vacancies below an average of four percent.

Johan Engelbrecht, Director, Management and JHI, Which manages more than 170 malls nationally, with an area of nearly two million square meters, said: “Trading the density of JHI run centers are strategically driven to ensure that tenants placed right in their favorite place, size, layout and design, and also taking into account consumer behavior and spending, we are able to proactively manage the employment potential of the time.

Although we have not seen an increase in Requests for information and commercial spaces that we are confident this trend will change over the next six months, “he says.

“There is no doubt that we have seen some recovery in retail sales for the year ended December 2010. Most of South Africa’s major retailers have reported on their December 2010 sales and the news has been predominantly positive, with percentage increases mainly in double figures. The November 2010 retail sales figures nationally were 6.1 percent up year-on-year (according to the SA Council of Shopping Centres Economic Overview dated January 2011).

Over the latter half of 2010 the increase in consumer spending, coupled with the increase in consumer confidence – mainly due to household borrowing gradually returning, with low interest rates and inflation – indicates that perhaps the worst is really over. In general, the major shopping centres under JHI management have achieved a positive growth year-on-year for the period ending December 2010.”

Engelbrecht says retail categories in essentials/durable goods and services still seem to outperform luxury items, although the gap is closing. Retailers ie hardware, paint and glass, specialising in supplying the building and construction sector remain under pressure and there has been an average performance from specialised food and beverages. Conversely, CFTA (clothing, textiles, footwear and accessories), pharmaceuticals, medical goods, toiletries and household goods have performed very well.

He adds: “Our outlook for the retail sector in 2011 remains positive. We will definitely see sustained growth in sales from retailers in established markets and nodes.  Factors impacting on the retail sector include changes in public transport systems, such as the introduction of the Gautrain and toll roads in Gauteng, which will have a significant effect on retail nodes in the future. Such factors have always had a substantial impact on retail nodes, as seen in previous years – with increased pedestrian and commuting nodes established by consumers residing in traditional townships.

Accessibility to major retail nodes will primarily be driven by the consumers’ choice of what will be the most affordable way to reach his/her shopping destination, and ultimately this could impact on the current profile of shoppers frequenting shopping centres.”

Engelbrecht notes that South Africa is following the trends abroad, such as that experienced in the UK where the biggest growth has been achieved in a store format, which is a key priority for food and food products.

“We recognized this shift in consumer behavior overall the time savings and convenience of a critic in today’s hectic lifestyle and have developed a strategy for growth around the cities adjacent to the market value of the community shopping center is to focus on the consumers of South Africa and the proposal to deal with Massmart and Wal-Mart could be an incentive for positive change in the dynamics of. Our retail market, “he says.