Tuesday, 13 February 2018

The Plastic Resolution

As we discussed in the previous piece, plastic is so engrained in our lives and in the modern global economy, that it seems impossible to imagine a modern world without it. But we can, and in fact we must, if we are to avoid some of the catastrophic damage that lays ahead due to our excessive plastic use and wastage.

So, how can we reduce our reliance on plastic- what is the Plastic Resolution?

Firstly, we can establish that change has to happen on multiple levels of society. We can broadly categorise these into three: the individual, the business, and the government.

Secondly, we must understand that plastic will not go away tomorrow. As it has taken decades and decades for plastic to find its way into mass usage, it is likely to take even longer to find substitutes for all the various plastics we use for different purposes. But every effort has to start somewhere!

To start the war against plastic, it's most important to approach and resolve the most frequent offender- single use plastics. As the name suggests, these are plastics which are simply used once and then are disposed.

Single use plastics are what comes to the minds of most when we envisage the harm caused by plastics to wildlife. We all have heard of plastic soft drink bottles piling up in our seas, animals dying after mistaking plastic bags for food, or getting trapped in plastic packaging. Single use plastics are so dangerous to the environment in large part because there is such high demand for them. Every time you get a coffee to go, every time you go shopping, every time you buy a bottle of water, another single use plastic is added to the wastepile after you finish.

The government's 5p plastic bag charge, introduced in 2015,
proved successful in reducing use of plastic bags
The British government has already begun to take on single use plastics. The 5p minimum charge for plastic bags introduced in 2015 was designed to encourage shoppers to use reusable bagging, and it saw dramatic success-with an estimated 83% reduction in plastic bags issued by the country's biggest retailers. The government will be extending this charge to include small businesses this year.

Further legislation was also put in place in January 2018, including a ban on the use of microbeads in cosmetic products.

While such actions are indeed crucial steps for the governments of the world to take, many argue further can be done by the government, specifically to influence business behaviour. Some believe the stick approach works best- for example, making businesses pay for the recycling of the plastic packaging they sell. Others argue for the carrot- a more incentives-based approach. This could mean a policy like setting targets for businesses to reduce plastic waste, and rewarding them appropriately.

However, without research and development, businesses could be left with no choice but to continue using harmful plastics. With its unique properties and versatility, there's a reason why plastic is so commonly used in products- and to find equally cost effective and versatile substitutes is no easy task.

There is a strong argument that businesses should bring back materials previously used- such as glass for soft drinks, paper for grocery bags, or steel for cups. While such materials may well see a comeback, they have their foibles- and to find a substitute for plastic that keeps all its benefits, a lot of research and development will need to be done. This will need to be supported by the government, but equally businesses are responsible for funding and supporting such activities.

So we've now moved onto business- what can business do to reduce plastic waste?

This is a complex question; specifically because for most businesses, plastic is the most cost-effective material for packaging. Thus, investing potentially considerable resources into finding an alternative will not be an appealing prospect from a strictly financial perspective.

This is when Corporate Social Responsibility (CSR for short) comes into play. As entities that both give and take to society, businesses must accept the role they have played in creating the current chaos (with relative innocence, it can be argued), but more importantly accept the role they now have to help society fix those problems- by investing in finding alternatives to plastic. This may not be a profit-driven decision (though it could well be, as we'll explore shortly), but it is one that is crucial for our society's resolution to the plastic problem.

The government, through offering financial incentives for environmentally friendly behaviour, can ease this transition for businesses. However, the primary customers of most businesses are ultimately us- the end individuals, as consumers.

Therefore it is imperative that we as individuals are careful about what we consume. We should avoid single use plastics- and the best way to do this is to reuse. Get a reusable coffee cup, get a reusable solid liquid container, get a reusable bag, and make sure you recycle whatever plastic you can't substitute. Even something as small as buying a bigger plastic tub of yoghurt rather than several small tubs can help- as buying in bulk generally reduces the packaging-to-content ratio.

And when businesses aren't conscious about minimising their plastic waste, we should be conscious not to award them our business. As consumers we often forget our power, when we act in unison. Businesses acting irresponsibly should be punished for their failure to serve the environment, and businesses doing their bit should be rewarded. This serves a similar purpose to financial services offered by the government to businesses; it makes it easier and more financially appealing for businesses to minimise plastic waste.

However, it is often easier said than done to be entirely conscious about your plastic usage as an individual. The large majority of people still use single use coffee cups, for example.

Here, businesses can help us to behave more responsible. For example, reward schemes for using a reusable coffee cups are standard across many major coffee shops in the UK, and you can get supermarket loyalty points for reusing any carrier bags. These things make it more appealing and easy for us as consumers to avoid plastic, or at least use it responsibly. At the same time, government policies such as the 5p plastic bag charge push us to be more considerate.

Single use plastics remain the primary issue the world needs to tackle; once we are able to confront this, the battle for a future less clogged with plastic bottles is half-won, and we can perhaps continue to look at phasing out plastic entirely.

The fact is that the main onus is on businesses, as the primary producers of these plastic products, to reduce plastic waste. And of these businesses, the largest and most influencial hold the most responsibility. Once a company like 'Coca-Cola' takes a clear stance against plastic waste, for example by replacing all plastic bottles with glass bottles, the industry will be sure to react. The government, and we as consuming individuals, need to do our best to foster the conditions in which such a decision might be made.

The fight against plastic waste is a classic example of how the government, businesses and individuals can, and must, all interact as members of society to incentivise each other to behave better. By each accepting their responsibilities and burdens, the unity of these three groups has the long-term potential to create our Plastic Resolution

Friday, 2 February 2018

The Plastic Nightmare


Plastic is something we deal with at almost every moment of our lives. From our household goods, to our cars, computers, Amazon packages and more, plastic is a seldom-appreciated phenomenon of the modern human age. A miracle of modern chemistry, plastic is arguably the most versatile material out there.

However, our use of plastic in today's world exemplifies one of our greatest weaknesses, actually raised out of one of our greatest strengths: we can make the world and its resources bow to our needs, but we often fail to attend to the needs of the world. This behaviour has put a whole host of parties at risk- from the earth itself, to our co-habitants, to our very own future generations of humankind.

The most prominent example of such behaviour, and rightly so, is the phenomenon of pollution. Air pollution scars the lives of many inhabitants of today's sprawling metropoles of the world, while putting the very future of our entire Earth at risk.

Though a known concern for many years, the way we use plastic has come under the spotlight in recent months. The primary issue with plastic comes with its lack of biodegradability; meaning, left undealt with in landfill or in oceans as it is in many places today, it will not go away. Plastic waste will simply pile up.

And boy, has it been piling up.

We produce over 300 million tonnes of plastic each year; 8 million tonnes of which is dumped into the ocean, according to plasticoceans.org. At the current rate, it is estimated that by 2050 the plastic waste in our seas will outweigh all the fish.

Yes, an increasing amount of waste plastic is now being recycled; but still, a shocking 91% of plastic worldwide isn't recycled. This is usually due to one of two reasons; poor recycling infrastructure and organisation, or the lack of recyclability of many plastics, such as those used in most coffee cups, due to its waterproof nature. We may be encouraged to place our coffee cups in recycling bins, but in reality, just 1 in 400 coffee cups are actually recycled.

As one would expect, this massive influx of plastic waste has has profoundly negative effects on the environment and wildlife.

The Great Pacific Garbage Patch
The Great Pacific Garbage Patch (GPGP) is one gargantuan example of our failure to deal with our excess plastic. The GPGP is a massive collection of debris, the majority of which consists of plastic. While we tend to imagine this as a mass of plastic bottles and the like drifting in the sea (as pictured on the right), the majority of the GPGP is made of 'microplastics'.

While plastics do not biodegrade, they are broken into smaller and smaller pieces continuously. This results in a dust-like material that never disappears from the oceans.

Microplastics also come from everyday items we use. For example, it was very common for many skincare products and toothpastes to contain microbeads, that supposedly improved the feel of the product on the skin and visual appeal. However, research suggests that microbeads blocked digestive tracts of animals who consumed them- so these luxuries came at an exceedingly high price. On a positive note, more people are coming to realisation about this, as bans on the use of these materials come into play in many countries of the world.

This waste in the oceans wreaks havoc with wildlife. Unaware of the dangers and toxicity of many plastics, small pieces of plastic are often confused with food. A 2015 study found that as many as 9 out of 10 sea birds had plastic in their guts.

There are countless further tragic stories of animals falling victim to our plastic waste. From poisoning to asphyxiation, plastics are the causes of death for estimated millions of animals, both on land and in sea. Whether they are in the form of microbeads, plastic bags, packaging or something else, plastics pose a significant threat to biodiversity, and in the long term could threaten entire species if left undealt with.

Our success in making plastic serve so many of our needs is coming at the cost of our planet. As our land and seas become landfill sites for plastic waste that will never go away, millions of animals are dying, suffering from pains as simple as becoming entangled in plastic six-pack can packaging.

Plastic has indeed served the human race well- but it is time to move on.

So, how can we confront this massive problem of plastic, when we are so dependent on it? We'll discuss what governments, businesses, and we as individuals, are doing and can do to end this chaos in next week's article.

To see how you can influence and get involved in the fight against plastic, join the community at A Plastic Planet.


Friday, 8 December 2017

How Will Autonomous Cars Change Our Economy?

Self-driving cars are about to become widespread; the advantages these vehicles have over traditional cars are obvious. One question then is how will this automation impact the economy? Mark Slater investigates...
image: pursuitist.com
Mark Slater
AutoMax, North Carolina

Self-driving cars navigating themselves by computer are becoming an actuality in the 21st century. In fact, it is projected that by 2030 over 50% of the cars on the streets will be driverless
. It’s time to carefully examine the effects this will have on our economy and to what extent.
Automated vehicles do have some incredible benefits. It is believed that accidents will be reduced by a considerable amount, mostly because it is estimated that 93% of all vehicular accidents are caused by human error. This is probably one of the best features these cars will bring to the table, but since the roads will be safer when you look at it from the perspective of an insurer or injury lawyer you see the loss of revenue as a direct result of these vehicles. Accidents cost the USA US$900 billion every year in repairs and administration costs- which will also be greatly reduced by the advent of autonomous cars. This could have a massive impact on the economy.
Still, car dealership mechanics need not necessarily fret, as even though there will be a reduction in accidents and the repair work mechanics perform there may actually be an increase in their workload due to a higher need for maintenance as a direct result of an increase in daily automotive use from convenience and vehicle sharing. Mechanics would certainly have to become accustomed with the innovative technology and get themselves through the necessary training. If they invest in these skills they could actually see a substantial increase in revenue over the next few decades.
Morgan Stanley believes US governments could lose US$1.3 billion from more esoteric revenue sources such as parking fees. This is mostly because automated cars can be on the road much more. Here is an example: imagine a parent going to work in the morning and directing the car to go back home and take his daughter to university before directing it to come back to pick him up. The vehicle will have much less need for a constant place to park all day.

Similarly, there will be a widespread reduction in the number of parking garages and parking spaces needed, which will allow for more apartment and office space development. Consumers, and not government, will benefit from this more. There is also a projected reduction of vehicle ownership from an average of 2.1 non-automated vehicles per household to 1.2 driverless vehicles per household, and this would reduce government revenue from vehicle registration fees.

Car ownership could even cease to exist by 2030. A Columbia University study suggested Uber would need just 9,000 autonomous vehicles to completely wipe out all taxis in New York City, with consumers only having to wait 36 seconds on average for a ride.

When these vehicles start to show up more, people will naturally be skeptical of how safe they are. This will be the response until these cars start to gain more recognition for safety. When this happens, the travel industry could also be heavily impacted. Why would anyone book a domestic flight or a hotel when they can have their car drive them somewhere overnight while they sleep safely in the vehicle? Why would anyone go through the trouble of reserving a room or even spending any money on a room when their car could drive them the whole way in privacy and luxury? Highway motel operators will take a big hit when these cars become more common.

It is estimated that trucking companies could save up to US $500 billion dollars annually by 2025. This would, however, cause many truck drivers to become unemployed. Indeed, there are many other drivers that will be affected such as taxi drivers, bus drivers, and even shuttle drivers. This level of job loss could put a real strain on the economy through unemployment.

On the other side of things, however, IT workers and analyst will see a positive impact as they will be more important in the age of automation. Disabled people will also benefit from these vehicles as their mobility, freedom, and income are expected to increase.

Despite the shifting tides, driverless cars could add as much as $7 trillion to the global economy. There will be winners and losers as with anything, but these vehicles will make our lives more efficient, safer, and convenient.


Tuesday, 19 September 2017

Why Is The iPhone X So Expensive?

The iPhone X was revealed with much fanfare in Apple's new Cupertino HQ last week- but it wasn't just the personalised poop emojis, the wireless charging or the new display that stole the headlines...



The all-new iPhone X was proudly revealed by Apple CEO Tim Cook as the "biggest leap forward since the original iPhone". The device, which marks the 10-year anniversary of the iconic smartphone, features an all-new bezel-less OLED display, 'Face ID'- the most advanced facial recognition technology on a smartphone- and other new updates such as wireless charging.

Not only was iPhone X arguably the biggest leap in technology since the original iPhone, but it was in fact the greatest leap in price- at $999 dollars, it became the most expensive mass-market smartphone ever, $230 up from the iPhone 7 Plus. This significant price increase, and the landmark of the iPhone X becoming the first ever thousand-dollar smartphone, remains a significant talking point of the new device- and most of the coverage around the price has been negative. So, why exactly have Apple made the iPhone X so expensive?

The most obvious contributor to the increase in sale price is the increase in the cost of production. According to GSM Arena, the X costs $412.75 to produce- compared to the $220 production cost of the iPhone 7. This drastic increase in cost is the result of a significantly larger, OLED display, a new glass material, and also a larger standard storage of 64GB for the base iPhone X.

Interestingly, the only place Apple could source the new OLED display was from its smartphone rivals Samsung- no doubt, the Korean firm will have exercised this monopoly power to try to reduce the margins of its competitor.

The new design and technologies of the iPhone X has also limited production capacity. This is rumoured to be one of the reasons why there have only two colours offered at launch, as well as why the actual sale date is in November, despite the announcement coming in early September. As basic economics dictates, a lower supply is likely to induce higher prices, as people clamour to not miss out on this latest iPhone.

While this price increase is rather drastic, people often forget that it's not the first time Apple have introduced devices at a high price. Apple believe that the iPhone X is a whole new device- an iPad Pro to the iPad that is the iPhone 8, or a MacBook Pro to the iPhone 8's MacBook. This is especially evident when you see that the prices of the iPhone 8 and 8 Plus have actually increased from the iPhone 7 and 7 Plus.

The first MacBook Air (top) was succeeded by a
more successful and affordable generation.
Source: Engadget
Historically, new Apple products as revolutionary as the iPhone X have provoked controversy due to their costs- the first generation MacBook Air, the 2015 MacBook and the Apple Watch are just three such devices. Experiences from these products have arguably given Apple the confidence to set a high price for the new iPhone. Where successful, Apple have been able to sell high volumes at high prices- and in slightly less successful cases, such as the launch of the first MacBook Air, Apple reduced prices over time as the new technology introduced became standardised in its line-up.

Apple knows that many people unwilling to pay $999 for the iPhone X will opt for the cheaper iPhone 8 instead- and this doesn't necessarily present a financial loss to Apple, given the lower production cost of the latter device.

And Apple also knows people will still buy the iPhone X. The massive marketing buzz around the product, and the sheer difference it represents from the usual iPhone lineup means that the device is undoubtedly going to sell in high volumes. It's likely, in fact, that the higher $999 price will be attractive to many customers. At a sub-conscious level, the round pricing of $999, essentially a thousand dollars, the idea of having a thousand dollar device will appeal to people who may want to own the device as a status symbol as well as a phone.

This type of product is known as a Veblen good- a product for which demand increases with price, in contrast to standard economics. At a sub-conscious level, the round pricing of $999, essentially a thousand dollars, the idea of having a thousand dollar device will appeal to people who may want to own the device as a status symbol as well as a phone.

A high pricing brings other potential smaller benefits for Apple. For example, when people spend as much as $999, the smaller purchases seem even smaller, and thus more appealing, to the buyer. For example, spending $100 on Apple's new AirPower wireless charging station seems less of an expense when you've spent $999 on an iPhone X than when you've spent $500 on a previous generation iPhone.

So while the increased production costs have introduced a necessity for Apple to raise the sale price of the iPhone for the new iPhone X, the decision to increase the price to as high as $999 is likely to prove a shrewd business decision for Apple, especially given the release of an updated iPhone 8 at a cheaper price. What remains to be seen, however, is whether Apple will eventually reduce the price of future generations of the iPhone X, as its technology becomes standardised in the iPhone range, or whether Apple is preparing the market for a shift to a new level of price for smartphones.

Monday, 21 August 2017

Should You Get Free Lunch In The Office?

By providing free meals, are offices providing gratuitous nourishment to their staff, or just locking them down in the office?



We've all heard (and, admit it, envied) those offices in which lies the promise of free food for all staff. Breakfast, lunch, and even dinner in some companies, is offered to employees, without a single penny leaving their pockets. These meals are not only free, but they are known generally to be higher quality than paid meals in other offices. 

But, like they say, there is no such thing as a free lunch. Free food at work has a variety of effects on a workers' life- from obvious things like their weight, their time spent at the office, to the more subtle things, like how staff interact with each other and how the food can affect worker performance.

The most obvious benefit of this particular perk is that it makes the office a more welcoming place for employees, both increasing the satisfaction of current employees and making a job at that company more appealing for potential recruits. 

Similarly, the most obvious cost of free meals at work, from an employers' perspective, is the cost of giving away food to employees. This cost has multiple layers: firstly, the employer must give up the cost of the staff, the facilities, and ingredients to make the meals themselves. Secondly, the employer gives up the potential for a small profit to be made by selling meals to employees at more than their cost price. And thirdly, the employer runs the risk of abuse of the system, which can lead to unexpected additional costs.

Despite this, massively successful companies such as Google are well-known to incorporate this practice into their offices. So the question is- why?

Perhaps even more significant than the direct benefits mentioned earlier, is the ability of a free meal in the office to win the employers more of its staff time. This starts with breakfast: providing the most important meal of the day for free increases the probability that staff will come to work sooner, reducing the level of tardiness. When it comes to lunch, employees are able to stay in the office, rather than head out to the shop to buy a meal deal. Removing this travel time, and keeping employees in the office, means lunch breaks are likely to be shorter when lunch is provided in the office.

Some companies like Google take the food offer further- even offering free dinner on-site. This increases the likelihood of late working nights- especially, in the case of Google, because many employees will be young and no doubt become dependent on meals provided by the office.

The numbers can prove that providing office meals genuinely brings greater benefits than cost*. Assume that, given the costs of ingredients, cooking facilities, staff, an economy of scale whatnot, the average cost of producing a meal is £6. Furthermore, reasonably assume lunch provided in the office increases an employee's working time by 15 minutes every day.

An example of the fine food on offer at Google
(Credit: Michael Krehan, Quora)
Google's average salary in the UK is reportedly £160,000- though it's highly likely that this figure is skewed by the number of staff being paid 7 figure salaries, so assume a lower average salary of £120,000. This means roughly £2300 a week- £640 per working day, and thus, given a 9 hour working day, £71 an hour. By offering free meals, Google increases each employee's working time by 15 minutes- bringing an extra £17.75 of value, according to the £71 an hour pay estimation. The cost of this, according to our assumption, is £6- bringing a net benefit of £11.25. So, the cost of providing the free food is more than paid for by the additional productivity!

According to the above assumptions, a minimum average wage of £56,160 is required for a business to breakeven in their offer of free lunch. For most large businesses, this is not an unreasonable level.

From an employee perspective however, free hot meals can have negative effects, if not executed properly. A heavy meal can negatively impact worker performance, and in the long run, can lead to weight gain. Furthermore, some argue the shorter lunch breaks caused by on-site meals can negatively impact employee wellbeing over time.

Free lunch also brings intangible benefits. We emphasised in a previous article the significance of community spirit in any office. By offering lunch in a single place, employees are more likely to eat with each other, rather than head their own separate ways, increasing the likelihood of relationships across the country developing.

So we have (loosely) proven that free lunch can bring net benefits to a successful business like Google. But does free lunch work for all businesses? No.

Massive businesses, hiring thousands of employees on a single site, may enjoy a larger economy of scale, but equally they may find it harder to monitor and control the free food. Smaller businesses are the least likely to offer free meals. Though it may be an emerging trend, particularly with Silicon Valley startups, most small businesses may not be able to invest in the facilities and staff for free office meals. Such businesses may instead decide to invest in something similar, like free snacks.

Free lunch works for most businesses that demand a lot from workers. Some businesses take the investment in such perks even further- for example, Google offers free laundry services in many offices for its employees. Such perks are luxuries- but through increasing employee satisfaction, and minimising time wasted by employees, investment in these things can provide significant benefits for the firm.

*warning- an avalanche of assumptions is imminent...