For the Dutch version, click here. In the last years blockchain technology has become a fruitful digital innovation that could have implications business and enterprises. Read more on blockchain in this article Small introduction Blockchain is an upcoming technological innovation that could have major implications for different work fields. Amongst others, accountancy could potentially be reformed by this technology. Needless to say is that accountancy is generally bothered measuring financial information and assuring the correctness of this information. Blockchain has the ability to store information on a shared platform, called a blockchain, where all peers that are connected to the same network own an exact copy of the information provided in that network. In this way Blockchain has the ability to store transactional information that underlines the financial status of a firm. In other words, transactional assertions do not have to take that much time anymore which means that auditors are able to spend their time on matters that require higher level thinking. Based on this given, it can be said that implementing this innovative technology could provide accountancy professionals with a lot of opportunities. However, before blockchain can even be considered as an integral aspect of the financial world, the technology needs to be further optimized and adapted to be practical for professionals. Partnerships Hence, over the recent years accountancy firms have made efforts to forge partnerships with start up firms that specifically work with blockchain technology. So has Deloitte, world’s biggest accountancy firm, forged a partnership with Ava Labs. Ava Labs is the firm that is responsible for the creation of the Avalanche Platorm. The Avalanche blockchain is, just like the rivaling Ethereum blockchain, a platform that utilizes smart contracts to support various amounts of blockchain applications. At this moment, Avalanche is considered to be one of the fastest smart contracts platforms. The developers claim that they have a much faster transaction processing time than the Ethereum blockchain. This means that Avalanche’s scalability is far more superior compared to its competitor. Deloitte forged this partnership in order to leverage the usage of the Avalanche Blockchain. The reason for this is the fact that Deloitte works together with the FEMA (Federal Emergency Management Agency) to develop disaster reimbursement programs for governmental agencies. Deloitte has created a platform called the CAYG-platform, which is a cloud-based application that provide its legislative partners with a decentralized and transparent system. With the help of the Avalanche blockchain, the CAYG application should be able to retrieve documentation more quickly, under reduced administrative effort, and mitigated risks. In this way, the government agencies would potentially be able to help victims of disasters faster with funding while abuse and fraud would be curtailed substantially. Other partnerships Needless to say is that Deloitte is not the only big accountancy firm that has formed strategic alliances with blockchain firms. In 2021, PWC has partnered up with blockchain firm Vechain in order to develop a low-code digital service platform that uses blockchain technology. With the help of this technology enterprises would be able to utilize digitized business models that require the adaption of the innovative blockchain technology. After succesful adoption, enterprises would be able to integrate scattered supply chain data in a rigid and reliable blockchain ecosystem. In this way firms could achieve full transparency over the complete span of the vertical supply chain, which promotes trust among firms and its external stakeholders. In the same fashion, EY collaborates with Polygon on building and implementing scaling and enterprise solutions for the Ethereum ecosystem. The Polygon protocol provides an easy framework for new and already existing blockchain developments to build in the Ethereum ecosystem with an increased rate of scalabilitity. In a broader sense, this integration would provide users of this framework with much more efficient transaction processes. Outlook What is a common issue with adapting new technologies is the fact that generally there are problems with data security and privacy. Another problem would be the lack of technical experts and the lack of clear legislation regarding the use of that new technology. In other words, regulators need a new auditing system that is able to watch over this new Blockchain technology in order to see whether no financial misconduct is taking place. However, despite the downsides of Blockchain, its potential benefits for the auditing, and makes it far too interesting to ignore this new innovation. A technology that could enable firms to implement a self-running auditing system would save a lot of extra working hours that could be spend in a much more efficient way. Auditing is just one of the many business areas where blockchain techonology has practical implications. As stated before, this innovation could instigate a big leap forward into technical development that could possibly spur digital innovation in an even faster rate that we have not seen before.
A Robot Tax: Fair Measure Or Unnecessary Hindrance?
Innovation and technology are having a fast-paced impact on the entire world. Companies and citizens are constantly transforming their rough ideas into new disruptive technological products or services. This might seem like a good development, but it can equally affect society for the worse. In general, local governments are trying to keep up with the quick, sometimes surprising, technological developments that are being introduced. Nevertheless, it is sometimes the case that common law and, more specifically tax law, is somewhat lagging behind. This creates loopholes through which many stakeholders can legally circumvent the law, which is sometimes questioned on an ethical basis. It is in this context that the so-called robot tax has come to be debated. Robotics and other technological solutions are maturing and are increasingly accepted by the market. The major question is whether tax law should move with robotics because it is more matured now. The aim of this article is to introduce the viewpoints given on this issue, and to offer a final conclusion and a future outlook on it. Should local governments tailor tax law, since robotics is maturing? And how does the dehumanising factor play a role in this, since it is estimated that robotics poses a considerable threat in the labour market? The Robot Market: Analysis and Outlook Especially in the developed world, robots are heading to the forefront and thereby play a more central role. According to the International Federation of Robotics (IFR), robot sales increased by 15% from 2014 to reach total sales of 253,748 units worldwide in 2015. This was the highest yearly increase ever recorded. The main underlying growth was in the general industry (33% growth in 2015), with huge increases in the electronics industry (+41%), the metal industry (+39%), and the chemical, plastics, and rubber industry (+16%). These incredible growth rates were mainly the result of the soaring trend of automation, and the further exploration of innovative solutions for industrial robotics. The chart below, for example, shows the dramatic developments in supply over recent years: Moreover, the core supplier in robotics industry is China, which had a 27% share in the market in 2015. Generally speaking, the Asian market has been dominating the robotics market for the last couple of years. The top five countries – China, South Korea, Japan, the US, and Germany made up 75% of global robot sales in 2015. The total number of robot installations is expected to increase by around 13% on average per year between 2017 and 2019. Meanwhile, the forecast for the US and Europe is 8%, and 15% for Asia/Australia. Overall sales in 2019 are expected to hit 413,000 units. The annual supply estimation can be seen below: On the other hand, it is also a must to look at the total number of robots being used by the market’s most demanding countries, and clarify what the future trend will be. According to the Center for Technology Innovations at Brookings report, there were 1.2 million robots in use in 2013, with 1.5 million in 2014 – and this is expected to grow to 1.9 million in 2017. “Governments should implement a tax on robots to bring about a more equally-weighted balance between men and machines.” While China is the largest annual supplier, Japan has the most robots in use: the Land of the Rising Sun counted 306,700 robots in 2015. Japan was followed by North America with a total number of 237,400, by China (182,300), South Korea (175,600), and Germany (175,200). It can be clearly seen that Asia is still the dominating continent. In addition, the overall sector is expected to grow in value from $15bn in 2015 to $67bn by 2025. But this just covers the supplies, number of robots, and sector estimations. It is also valuable to have a look at the costs involved, which are a vital factor to better understand the tax policy arguments that are to be discussed below. In robotics’ early days, it was known as a high-cost option that was dominantly used in the automotive industry, since carmaking was known for its high-wage labour market which made robots a viable option. However, this shifted massively throughout the years, and the costs of robots have fallen substantially. This resulted in a better cost competitive position for robotics in other sectors too, thereby increasing the threat posed to human workers. Moreover, in some key industries in Asia, the cost-competition threat is already on a higher level. The Argument for a Robot Tax It can be concluded so far that robots are an efficient, precise, and effective solution for the near future. It can also be said that robots will more dominate the labour market. However, in terms of taxes, this needs to be more fairly weighted. According to Bill Gates and Benoît Hamon (the Socialist candidate in the upcoming French presidential election), governments should implement a tax on robots to bring about a more equally-weighted balance between men and machines. At first, it might be argued that robots should not be taxed because they provide improvement factors like efficiency, preciseness, effectiveness, and productivity. However, developments regarding robotics are implemented at such a quick pace that this automation process will harm jobs, which results in more unemployment – especially in sectors with a lot of lower-class workers, like agriculture and manufacturing. A future employment forecast broken down by sector can be seen below: Bill Gates clearly emphasised that this quick automation trend should be slowed down in order to more smoothly implement robotics and create new types of jobs for the workers who have a higher chance to be replaced by robots in the near future. Bill Gates said that the tax on robots would have a slightly negative impact on innovation, but that it will have a beneficial outcome in the long-term, especially for lower-class workers. Another result of the tax on robots is that it will better allow national governments to put the right tax policies and other law enforcements in place, since robots have a crucial impact on
Start-up Bloombox brings innovation in the flowerbusiness
Start-up Bloombox brings innovation in the traditional flowerbusiness Marvin Schrooth is founder and owner of Bloombox, a webshop offering bouquets. Bloombox distinguishes itself by its unique partly transparent packaging, which makes it possible for the receiver to directly see the flowers preserving the emotional impact that a bouquet has. How did your studies prepare you for entrepreneurship? The ‘Consumer Services Management’ track that I chose in my bachelor in Business Administration has proven itself to be a good choice. The client has always been the main focus and we learned to think from the clients’ point of view. This outside-in way of thinking I still apply on a daily basis and is actually the base of my whole organisation. What have you learned from running your own company? At the moment I am working more hours than ever, but also with more joy than ever. I have learned a lot in a short amount of time on (online) entrepreneurship in general, finance, marketing and communication, doing international business, laws and regulations, planning and structure and specific aspects of the flower business. What is the most memorable moment of the business for you? A moment that I will always remember is when I received the custom packaging from China. The exclusive packaging is an important unique selling proposition of Bloombox. It was an exciting moment as I hadn’t seen the packaging in real life yet since I decided to start with the final production without receiving a sample of the final design first. That day I found a huge pallet in the middle of the street. I remember clearly that I grabbed a cardboard box from it and ran inside. The huge amount of invested time and money ran through my head, together withthe deadlines that couldn’t be met if something would be wrong, When I ripped the cardboard box open I directly saw the quality and appearance of the Bloombox packaging. There I was, holding my very own product, the first Bloombox. It was a moment of pure euphoria. How does a regular day in your life look like? 04:00 Meerssen, The Netherlands, Bloombox – The alarm is set early and a long but eventful day is ahead of me. Let’s go! 06:00 Aalsmeer, The Netherlands Flower Auction – After a slight delay I have arrived on the flower auction. The auction has already started so I have to hurry to collect my desired assortment. It is the biggest flower auction in the world and it is always a crisscross of demand and offer. After a few cups of coffee and a dose of positive stress I am satisfied; I have been able to purchase all the products we need. I decide to quickly enjoy a last cup of coffee with a partner at the auction and give my permission to transport the flowers directly to the business location of Bloombox. Through our tightly designed logistic process we can arrange and send the Bloomboxes ordered for today, with fresh flowers auctioned today! 13:00 Gent, Belgium, Website Builders – After the trip to the colourful flower auction, I’m back in the online world. I have a meeting with the team that has designed and developed our website. We review the file I have sent them earlier with a series of changes that have to be processed. This file is based on the customer reviews from the first few months which have provided us with a lot of useful feedback. Our team believes in and works according to the ‘’Build, Measure, Learn principle’’. It was a short but productive meeting and I’m already looking forward to the changes and the associated customer experiences. 16:00 Meerssen, The Netherlands, Bloombox – When I arrive at Bloombox the flowers have already been cleaned and are neatly stored in the refrigerator. The orders that will be delivered tomorrow are being prepared by our staff. It makes me happy to see these experienced people being proud of their work. 19:00 Beek, The Netherlands Distributioncenter parcel post – Since we have received a few last-minute orders I myself bring the orders to the distribution center with whom we work together. The end of a long day is in sight but the journey of the parcels has only just begun… www.bloombox.nu
Finance and Innovation
Dr. Alberto Manconi has the reputation of giving interesting and interactive lectures; a perfect fit for Chairman of the Day during iFinance 2015. The following article, written by Dr. Manconi, is his consideration of the topics discussed during the event. Whenever I face the trite refrain that finance is “too large,” I observe that it was likely the largest industrial sector in Renaissance Florence (Medici bankers ruled the city!), the cradle of cultural renewal which got us out of the Dark Ages. So I do believe finance affects innovation, mostly in a good way – today we discuss whether it can also hinder it, how, and what we should do about it. Among the general public, much blame for an alleged innovation slowdown (and many other ills) goes to investor short-termism:[1] Shareholders expect quick results, but innovation is all about the long-run, so excessive reliance on external finance hampers progress. While this view has its merits, I’d like to raise two caveats. First, not all shareholders have equal horizons: There are deep, “structural” reasons why a pension fund may have longer horizon than a mutual fund (e.g. their respective retail investor pools). Innovative companies might simply turn to longer-horizon investors. Second, shareholder horizon affects corporate investment in a less direct way than, say, managerial incentives. For instance, a recent study[2] finds that managers are more likely to innovate when they face weaker labor market penalties for failure – i.e., when they have a freer hand to take risk. Risk, of course, is a double-edged sword. Yes, we want companies to take risk to innovate. However, we don’t want to promote risk-taking to the point of creating instability. Hence the debate on the recent changes in bank regulation and supervision, which we also discuss today. Will Basel III limit banks’ ability to lend, thus placing a constraint on corporate innovation? I admit, that is a possibility. However, banks are not necessarily the primary source of financing for innovative firms – just think of venture capital.[3] Further, addressing risk in credit markets, especially in the aftermath of the recent financial crisis, promotes trust – a second, essential ingredient to innovation. The topic of regulation brings me to my last point, the first we discuss today, and potentially the most controversial: What is the government’s role in all this? As an economist, my “Pavlov reflex” is to say that the government should simply create a good set of institutions, and then stay well out of the market. The question is just what is a good set of institutions? Does it involve additional channels for financing innovation, e.g. concessionary loans, tax breaks, etc., or are the existing channels adequate? Should the government promote innovation in certain sectors deemed more relevant, or should it let the market decide? Or, rather, should it focus on the premises of innovation, e.g. education, developing an entrepreneurial culture, etc.? These are very broad and deep issues, way too broad and way too deep to address in this short note – but I look forward to our discussion of them today. [1] E.g. Denning, S., 2014, Why Financialization Has Run Amok, Forbes 3 June 2014, available at the URL: http://www.forbes.com/sites/stevedenning/2014/06/03/why-financialization-has-run-amok/ (last accessed: 29 December 2014). [2] Custódio, C., M. Ferreira, and P. Matos, 2014, Do General Managerial Skills Spur Innovation?, Working paper, Arizona State University. [3] Cf. Kortum, S., and J. Lerner, 2000, Assessing the Contribution of Venture Capital to Innovation, RAND Journal of Economics 31, 674-692; or more recently Popov, A., and P. Roosenboom, 2012, Venture Capital and Patented Innovation: Evidence from Europe, Economic Policy 27, 447-482.
The creation of iFinance 2015
Youssef Essaghir, Chairman iFinance 2015, was asked to give us some insight regarding his experience at Asset | Accounting & Finance. He talks about what it is like to organize an event such as iFinance. If you would like to learn more about why he signed up for the committee or why he believes you should attend iFinance, you can read his story. Could you give a short introduction about yourself? My name is Youssef Essaghir, I’m a third-year bachelor student in Business Economics and I am planning to do my master in Finance after obtaining my bachelor. This year I am the chairman of the iFinance committee and an interviewer for the Food for Thought committee. Why did you join Asset | Accounting & Finance? Asset | Accounting & Finance is the gateway to put theory into practice. This means that you get the opportunity to organize an event in your field of study. By doing this I am able to prepare myself for my future career. For instance, I develop my organization skills and my understanding of finance. Furthermore, the steep learning curve of working as a member on projects is an ideal way to develop your problem solving skills. This is the main reason I joined Asset | Accounting & Finance. But of course this is not the only reason. It is also a great way to meet new people with the same kind of interests. What appealed to you to sign up for the committee iFinance? I knew one thing for sure, after my bachelor Business Economics; I would either do my master in accounting or finance. So that is why I was hesitating between Accounting Insight and iFinance. During that time I was treasurer of the Asset Events committee and iFinance started just after the ending of the Events committee. That made it easy to choose for iFinance. I didn’t choose for an informal committee because I thought it was time to do something where I could use my full potential. iFinance is a very dynamic event. This makes it a perfect opportunity to put my qualities to the test. What and when is iFinance? IFinance will take place on February 5th on Tilburg University. The ‘i’ of iFinance stands for interactive. This means that you will have the possibility to actively participate and discuss a current and finance related topic. During the event different propositions will be introduced by short movies, speeches and voting rounds. Our aim is to spark a discussion between our speakers and the audience after presenting the proposition and a quick presentation. This presentation will be done by one of our speakers. Which guest speakers will there be at iFinance? This year we have some prominent speakers. We will start with Prof. Dirk Schoenmaker, Dean of Duisenberg School of Finance who will elaborate the first proposition. The speakers of the second proposition will be Mrs. Vaishali Bapat, Finance Manager at Shell and Mr. Martijn Rozemuller, Managing Director of Think ETF’s. After this we will also have two speakers who will review the third proposition. The first one will be Mr. Bas Pulles, Former Managing Director NL EVD International and current Director International Programmes at Netherlands Enterprise Agency. The second speaker will be Mrs Marije Lutgendorff, Owner of Crowdlokaal. The chairman of the day will be a known professor amongst finance students, Dr. Alberto Manconi. He is professor of ‘Financial Management’ and ‘Corporate Governance and Restructuring’ at Tilburg University. Are there any possibilities to get in touch with companies? Preceding the event there will be a lunch with the recruitment of Royal Dutch Shell (Shell), which is also our main partner. During this lunch eighteen students have the ability to get in touch with the recruiters of Shell, one of the biggest companies in the world. How did you develop iFinance? What were the processes from beginning to end to organize this? The first and most difficult part of organizing the event is coming up with a subject. During the summer, we tried to keep in touch with all the financial related news articles in order to find a subject that would still be current when the event would take place. This is also what will determine the success of the event. After narrowing it down to one subject we started to contact and invite potential speakers. We tried to have speakers that would be able to clarify the subject from different perspectives e.g. political, academic, entrepreneurial and of course a financial perspective. Until last Friday we were focusing on finding partnerships in order to finance the event. The next coming days we will start with promoting the event and making sure that everything will run smoothly at the 5th of February. What are the benefits to participants of iFinance? Why should students participate? Like I mentioned before, eighteen students are able to attend a lunch with the recruitment of Shell, an ideal way of to get your foot in the door at this company. Of course the subject itself is very interesting for people interested in finance or entrepreneurship. This year we considered the rapid changes in the world of Finance, ranging from the new banking regulations to the rise of crowdfunding. The subject of our event will consequently be: ‘The Future of Finance’. Where we will look at different financing methods, ranging from well-known methods to innovative ways of financing. This subject will be a value-adding experience for students interested in finance. Where can you register? You can register on the website. Here it is possible to register for the event, but also for the lunch that will take place beforehand. I hope to see you all at iFinance 2015 on February 5th. I’m confident that this will be another great Asset | Accounting & Finance event.
