Hi Ariella, Isn't it just cynical that big corporations can manipulate the tax loopholes to enrich themselves while gorging on government give-aways? However, the UK government recently claimed it has closed the tax avoidance loopholes. It is not surprising that the well off would by and large find ways to avoid paying taxes but will the new jobs the government expect them to create compensate for the lost tax revenue?
Rick, I am curious too. Your last set of questions got me thinking about whether or not regions of the world can divvy up the business of product innovation in such a way that no particular locality is left out. Will such a system work where, for instance, Western Europe focuses on wireless innovation and China devotes attention to automotive enhancements and North America embraces nanotechnology? I don't see this happening. First, it's not a promising and healthy way to drive innovation and second, if one sector takes off faster than another you can bet engineers will flock to the more successful line.
So, we come back to the old way of resolving issues like this: these geographical regions will have to duke it out with support from their respective governments. Even this process is not without a wrinkle though. Companies manage their businesses for their shareholders' profit and not for the benefit of host nations. Totally fascinating stuff.
Ariella, So, life on the corporate lane comes down again to companies asking to be left alone to do business while seeking handouts from the government in terms of tax holidays or tax breaks, grants for research work and other forms of assistance that would help reduce costs and boost profit. I can bet it's difficult for most governments to figure out ways to attract companies to their shores while still ensuring adequate taxes are paid.
The challenge for most governments is that if they don't offer these breaks to businesses, others will and end up winning the coveted jobs. So, the UK is going to hand businesses huge tax breaks in the hope of attracting major companies to its new high-tech city. Let's hope the companies stay long enough for the country to benefit from its investment.
After reading your post, Anna, I looked into the topic a bit. I found this article, which was rather critical of the the prospect of turning London into a high tech center. Among the author's complaints is the fact that Google and Facebook "use - legal - tax avoidance schemes to avoid paying the taxes they should, with Google managing an effective tax rate of just 2.4%. By channelling its UK revenues through Ireland, Google avoids an estimated £110 million per year in UK tax. Facebook is building a similar system of avoidance." So it is not just in the US that corporations find ways to significantly reduce their taxes. See Barbara's post on corporate tax at http://www.ebnonline.com/author.asp?section_id=1071&doc_id=199853&
London does have a lot of pros as a technology hub. One of the distinctions of the Valley was the predominance of venture capital firms. Obviously, those took a massive hit, but how does the UK fare on venture investment? Obviously, VC is a global resource, but proximity had its advantages in the Valley's heyday.
I think this is a great idea. Every major urban center ought to have some sort of science and technology hub IMHO.
Politicians walk a fine line here. They can rally support and resources from public and private sectors, maybe even scope out a very high level vision for the theme, but ultimately they need to let the public, private stakeholders who buy into the hub set the focus and the approach of the hub.
It will be interesting to see if the UK can muster enough forces for this effort and what its participants want focus on. What are the unique resources of the London scitech region? And what unmet world issues do they best map to?
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.