December 30, 2024

DealBook: Can Britain Forge Looser Ties to Europe Without Losing Influence?

Prime Minister David Cameron of Britain in Davos last year.Jean-Christophe Bott/European Pressphoto AgencyPrime Minister David Cameron of Britain in Davos last year.

LONDON – Last year, Prime Minister David Cameron of Britain used his appearance at the World Economic Forum to vent frustration with the European Union, listing some of the policies he would ditch if he could throw off Europe’s regulatory shackles.

“In the name of social protection, the E.U. has promoted unnecessary measures that impose burdens on businesses and governments, and can destroy jobs,” he argued, adding a list of directives that he would dearly like to scrap.

One year later, Mr. Cameron is following through on that pledge. He is promising to renegotiate Britain’s ties to the 27-nation bloc, forge a new and looser relationship, and probably put the outcome of those talks to a referendum.

World Economic Forum in Davos
View all posts


A speech on Europe, planned for last week, was postponed because of the crisis in Algeria. It has been rescheduled for Wednesday, ahead of a possible visit by Mr. Cameron to Davos, Switzerland.

It was unclear whether Mr. Cameron would attend Davos this year and speak on the same theme. But his tough line on Europe echoes growing British disenchantment with a bloc whose single currency union, which the British never joined, has been in crisis for three years.

Yet, supposing Mr. Cameron were to succeed in scaling down Britain’s involvement, some central questions will arise. Can Britain play a more limited role in Brussels and still retain significant influence there? And what might that mean for Britain’s full participation in one of the world’s biggest single markets?

In their 40-year history of engagement with a unifying Europe, Britons have never embraced the ideal of unity; instead they have seen their ties to the Continent in pragmatic terms. Increasingly, London’s conclusion seems to be that the costs in terms of regulatory burdens and financial contributions are not outweighed by clear benefits.

Mr. Cameron argues that to stabilize support for the European Union in Britain, the relationship must be loosened and focused more on the bloc’s single market of almost 500 million people.

Britain, which already is in the second tier of European Union membership, not only stayed out of the euro — and unlike most of the others on the sidelines has no intention of joining — but also does not participate in Europe’s Schengen passport-free travel zone. The British government also announced last year that it would opt out of a range of justice and security policy areas.

A group of Conservative lawmakers argued last week for five treaty changes, including those that would allow any country to block new European Union legislation on financial services, and would repatriate social and employment laws to national capitals. Britain’s euro-skeptics are also blunt in their criticism of the bloc’s agricultural, fisheries and regional aid programs

Many would ideally like to keep just one element of European Union membership, access to the single market, though achieving such status looks highly improbable.

Even those who sympathize with Mr. Cameron’s stance argue that a more detached position comes at the price of reduced influence, though they contend the cost of not changing would be higher. What is more, they argue, leverage in some of the policy areas is of limited value anyway.

“There is a trade-off, there is no doubt,” said Mats Persson, director of Open Europe, a research organization that favors a change in Britain’s relationship with the union. “If you reduce the level of E.U. influence in the British economy and society, you will lose some influence over some policy areas.”

But Mr. Persson argues that “if there is no change in Britain’s E.U. relationship, its membership is in question, which would really reduce its influence.”

Others worry that Britain is weakening its own position. Charles Grant, director of the Center for European Reform, a research institute in London, says that already “British influence in Brussels is at its lowest level in the 25 years I have been following the E.U.”

And critics argue that standing back from more policy arenas would increase the country’s sense of alienation from the bloc and fuel popular sentiment that things are stacked against Britain. A more detached relationship could also prove a disadvantage in the deal-making culture that prevails in Brussels.

Officially, decisions on legislation in Brussels are made by national governments under a complex series of rules before going to the European Parliament, whose approval is also required. In some cases, like tax policy, all 27 national governments need to agree, though in many others a weighted majority is required.

But relatively few decisions are actually put to a vote by governments. In practice, countries strike informal agreements and compromises, often trading support on one issue for a reciprocal agreement, sometimes in an unrelated area of policy.

In this twilight zone, horse-trading abounds. For example, Britain once supported Germany, which wanted to water down planned rules on takeovers, in exchange for help from Berlin to soften new European Union legislation on workers’ rights.

The fewer areas in which a country participates, the less influence it has to barter.

Something similar affects another area of unofficial influence: control of crucial positions in Brussels. When the last round of top European Union jobs was decided, Tony Blair, a former British prime minister, was a contender to become the president of the European Council, the body in which national governments meet. But Britain’s absence from the euro currency and the Schengen zone made this a nonstarter.

The prime minister at the time, Gordon Brown, wanted a top economic post for Britain in the European Commission, the executive of the bloc. Instead, he got a foreign policy position for Catherine Ashton, reflecting the fact that Britain remained an engaged player in that area.

The euro has dominated the agenda in Brussels for the last three years, but Britons have reduced prospects of making big careers in this policy area because London has no power to lobby for them.

“If you are in the Treasury in London, why the hell would you go to Brussels?” said one European Union official not authorized to speak publicly.

That trend now looks likely to extend to justice and security policy. Britain recently held the most senior position in the justice and home affairs directorate of the European Commission, partly because the British used to be enthusiastic about cooperation in that forum. A Briton, Rob Wainwright, is currently the director of Europol, the bloc’s law enforcement agency.

But given the government’s decision to distance itself, it will be harder for Britons to get such top jobs in the future.

Declining career prospects for British officials are reflected in staff recruitment figures, released in April 2011. They showed that the European Commission now employed more Poles than Britons, though Britain has a larger population and joined the European Union’s forerunner more than 30 years before Polish accession in 2004.

Britain has fewer than half France’s number of European Commission officials, and the situation seems destined to deteriorate because relatively few Britons are applying for entry-level jobs.

All this risks creating a downward spiral in British influence, which the country would need to counter by being more effective in the areas in which it remains.

“I think Britain still could have clout in more limited areas if it keeps friends and allies,” Mr. Grant said. “But the fact that we are not, for example, so engaged in justice and home affairs weakens our bargaining power across policy areas and weakens the career prospects of British officials.

Mr. Grant added, “There has been a steady diminution in the last few years, which you could plot on a graph: the more you distance yourself the less influence you have.”

Article source: http://dealbook.nytimes.com/2013/01/22/can-britain-forge-looser-ties-to-europe-without-losing-influence/?partner=rss&emc=rss

Pogue’s Posts Blog: Apple Rolls Out a Cleaner iTunes

Well, it finally happened: Apple got around to fixing iTunes.

Over the years, that program had become more and more cluttered as Apple saddled it with more and more burdens. In the beginning (2001), it was meant to be nothing more than a jukebox program. Then it became the loading dock for the iPod. Then it was the front end for the iTunes Music Store online. Then it was asked to manage TV shows and movies. Then podcasts. Then e-books. Then it became the syncing headquarters for iPhones and iPads. Then it was supposed to manage apps. Then it was the front end for Ping, Apple’s flopped music-discussion service.

Eventually, it became a sluggish, cluttered, spreadsheety hangnail on our digital lives.

On Friday, Apple introduced the free iTunes 11 for download (Mac and Windows). It’s still the front end for music, videos and iGadgets, and its features and personality are much the same. But the design has been overhauled — deeply, controversially, but, in general, successfully.

You’ll probably notice the declutterization first, what Apple calls “edge-to-edge” design. There’s nothing on the right, left or bottom borders: the entire window is filled with album covers, or song lists, or whatever view you’ve selected in the bar across the top.

You can restore the left-side list of sources and the bottom-edge status bar if you miss them. But the proposed setup works fine: You choose the file type from the top-left pop-up menu (Music, Movies, TV Shows, Books, Podcasts, Apps), then click a category button across the top to change the display (like Songs, Albums or Artists.).

Each of those criteria (Songs, Albums…) has its own layout now. The Album view is especially cool. You see a grid of your album covers; when you click one, an information strip appears beneath, listing the songs. The strip is color-coded to the dominant color of the album cover itself. Slick.

Little buttons with “” on them appear on just about everything; each produces a pop-up menu of options for that song, album or video (Add to Playlist, for example, or Show in iTunes Store).

A great new feature called Up Next is a list of songs that iTunes intends to play next — because they’re in a playlist you made, or they’re part of an album, or iTunes’s Genius feature is lining them up like a robot D.J., or just because you feel like building an on-the-fly playlist. You can delete the ones you don’t want to play, drag new songs into the lineup or reorder the songs that are there.

You can now redeem iTunes gift cards without having to type in that 723-digit code number. Just hold the bar code up to your computer’s Webcam; iTunes does the rest.

Apple also fixed some of the dumber design elements that have always plagued iTunes. For years, the store was represented only as one item in the left-side list, lost among less important entries like Radio and Podcasts. Now a single button in the upper-right corner switches between iTunes’s two personalities: Store (meaning Apple’s stuff) and Library (meaning your stuff).

And you know those three round buttons in the upper-left corner of the window? They’re supposed to mean Close, Minimize and Maximize. But the green one, for years, didn’t maximize the window — it shrank the window to a miniplayer, in frustrating violation of Apple’s own design guidelines.

Not anymore. Now the green button does what it’s supposed to — makes iTunes fill your screen — and a new Miniplayer button opens a new, better floating Miniplayer window.

The miniplayer offers far more power now. You can search your entire library, switch to a different song or playlist and manipulate the Up Next list, without ever having to jump back to the full iTunes window. At last, you can park the miniplayer in a corner of your screen as you do other work, while still flinging new songs into the lineup.

Unfortunately, Apple hasn’t fixed the Search box. As before, you can’t specify in advance what you’re looking for: an app, a song, a TV show, a book. Whatever you type into the Search box finds everything that matches, and you can’t filter it until after you search. It feels like a two-step process when one should do.

And then, of course, there’s the eternal question: “Is iTunes doing too much?”

Sometimes, there’s synergy. Sometimes, it seems to make sense that the jukebox, video, store and iGadget-loading features are all mashed into a single program — but not always. Sometimes, you feel like you’re using separate, grafted-together programs.

In many ways, iTunes 11 is a classic Apple move. It replaces something you knew with something that Apple considers better — with little regard to the time it will take you to learn where everything went. Online, there’s already a lot of “Noooo! They eliminated feature X!” — when feature X has just been moved or demoted.

iTunes 11 is, on the whole, better than what came before it — if only because it’s faster, far less cluttered and laid out more sensibly. Yes, change always ruffles people’s feathers — you could argue that Apple’s specialty is feather-ruffling — but this time, at least, the overall direction is up.

Article source: http://pogue.blogs.nytimes.com/2012/11/30/apple-rolls-out-a-cleaner-itunes/?partner=rss&emc=rss

You’re the Boss Blog: Some Businesses Choose Not to Grow

Creating Value

Are you getting the most out of your business?

One of the biggest decisions business owners face is whether to try to expand their businesses. This may seem like a silly question: Who wouldn’t want a business to grow? But owners who choose growth can get stuck. For some, the issue is how to handle delegation. For others, it’s about raising enough capital. And for still others, it’s about learning the technical skills required to manage a growing business.

Years ago, my two-person company was transformed by an acquisition that forced me to make several changes. I immediately had to learn skills that many learn over a period of years. The acquisition caused our sales to grow to $1.5 million from $75,000 and employment to grow to more than 20 full-time workers from one part-time employee. There were more changes four years later, when we bought a company that was located out of town. Now, I not only had to manage more than 30 employees, I had to figure out how to manage a company in a different city.

During the last 30 years, I’ve come to understand that there are three types of business. Each one places burdens on its owners that are different and distinct. But the point is that a business owner has a choice: You don’t have to get swept up in growth. Here are the options:

Microbusinesses are where all start-ups begin. The vast majority of the 27 million businesses in the United States are microbusinesses. Some are start-ups, some have been in business for years and some would like to be bigger, but the owners can’t figure out how to make the leap.

Microbusinesses are often one-person shows. If the owner becomes disabled or dies, the business falls apart. The biggest challenge with a microbusiness is keeping a steady stream of income. In my case, when I had a microbusiness, I would fill vending machines, make sandwiches for our machines, order stock for our warehouse, fix vending machines when they were broken, do our bookkeeping and count the money — in other words, I was the chief cook and bottle washer.

For me, being in a microbusiness was similar to buying myself a job. And in my case, the job was mostly about filling vending machines and making sure they worked. There was no time to think strategically or act strategically. I even found it difficult to find time to make sales calls. For many microbusinesses, there just isn’t time or money to make the jump. My break came when one of our competitors went out of business and we were able to buy its assets. This catapulted me to the next level.

I think of the next largest group of businesses as traditional small businesses. These businesses usually have five to 25 employees. They are more complex in that the owners don’t do all of the direct work themselves. They have moved into a role supporting or supervising others. As with microbusinesses, many owners decide this is a good place to be and don’t want to make their business any larger.

Those owners who do want their companies to move to the next stage have to develop the ability to create capital for growth. They also have to learn tools and techniques for running a larger company. Sometimes these owners get stuck because their businesses don’t make enough money or because they haven’t learned the right skills.

When my business was in this stage, I didn’t delegate well. I often felt like a firefighter. I had people who could help but no one who could manage. If there was a problem, it always came to my attention. Actually, I wanted it that way. I was convinced that no one could do anything in the business as well as I could. I wasn’t ready or willing to let go and have others help run my company.

This was my personal roadblock. I didn’t know how to manage; I just knew how to provide good service through brute force.

Those who do move on can become a lower middle market business, which is a business that can be sold. That means the business has to be able to run for long stretches without the efforts of the owner. Businesses that create enterprise value typically have more than 25 employees and produce more than $5 million in sales per year. The United States Census Bureau says there are about 300,000 businesses in this category.

Owners of successful companies that produce enterprise value know how to act and think strategically. They have created companies that function with tactical excellence; they are not just trying to get through the day. The truly successful businesses in this class have also achieved strategic excellence. It’s when tactical excellence is joined by strategic excellence that real value is created for the owner.

Moving into the lower middle market was a very difficult transition for me. I had to learn to trust my employees, allow others to make mistakes, put together dashboards to monitor what was happening in the company and find a way to take myself out of day-to-day operations. Oh, and I almost forgot — I also had to find a way to finance the growth and additional resources that we needed.

Over the next few weeks I’ll delve more deeply into the positives and challenges that come with each of these types of business. Please feel free to share your experiences owning a business in one of these stages — or moving from one to another.

Josh Patrick is a founder and principal at Stage 2 Planning Partners, where he works with private business owners on wealth management issues.

Article source: http://boss.blogs.nytimes.com/2012/11/01/some-businesses-choose-not-to-grow/?partner=rss&emc=rss