Viewing the Portfolio through a Strategic Lens

In the Industrial Revolution of the late 18th and early 19th centuries, one new force changed everything. Today our world is undergoing an even more dramatic transition due to the confluence of four fundamental disruptive forces—any of which would rank among the greatest changes the global economy has ever seen. Compared with the Industrial Revolution, we estimate that this change is happening ten times faster and at 300 times the scale, or roughly 3,000 times the impact. Although we all know that these disruptions are happening, most of us fail to comprehend their full magnitude and the second- and third-order effects that will result. Much as waves can amplify one another, these trends are gaining strength, magnitude, and influence as they interact with, coincide with, and feed upon one another. Together, these four fundamental disruptive trends are producing monumental change. more

Designing Policies that Support Growth

To achieve rising and shared prosperity requires not a silver bullet but an arsenal of policies deployed in systematic fashion. Most important, it requires a new level of understanding of how those policies interact and how they play out in the actual workings of an economy: among workers, in factories and offices, and between nations. This is a challenge, but policy makers can compare strategies and learn best practices to increase the likelihood for success. Moreover, in a globalized world, policy makers will need to consider each other’s approaches even as they focus on their own goals. more

Why Implementation Matters

How important is the way you implement a major change effort? Implementation matters. That may be no surprise to executives who have lived through the challenges of actually executing strategies and major change programs. But what may surprise you is just how much impact implementation has on a range of measures of corporate health. Many Enterprise Portfolio Project Management (EPPM) systems start with a desired structure, such as a globally standard system, and define the program objectives around that. more

Infrastructure's Central Role in China's 'New Urbanization'

People and their quality of life are at the center of China’s approach to urbanization. By 2020, China aims to integrate 100 million rural migrant workers into urban life, offering them benefits such as access to jobs, schools, and health care. The country also plans to revamp shantytowns where around 100 million people reside and urbanize about 100 million people in China’s central and western regions. This is a massive undertaking, but urbanization is not only about the numbers. Its basic principle is the importance of the roles of people and regions. The build-out of China’s urban environment is an important story because it changes lives. more

Grow Fast or Die Slow: Pivoting Beyond the Core

More and more service operations are turning to IT to reach the next level of efficiency and quality across all service venues—distributed, mobile workforces; centralized workforces; service supply chains; and back-office workflows. Investments in automation across service operations can raise productivity and quality a good deal. However, CIOs, COOs, and other service executives should have a clear game plan to avoid wasteful investments in technology. more

Interest Rates and Economic Growth

Interest rates, which have been so low for so long that consumers and businesses have come to consider low rates an entitlement, are starting to creep upward, prompting new concerns and debates. Will higher rates undercut the economic recovery? Should the Federal Reserve do more to hold rates down, or did the central bank already err by leaving them low for too long, feeding the housing and credit bubbles of recent years? As Fed policymakers prepare to meet this week to discuss these matters, it's worth dispelling some of the most common misconceptions about interest rates. more

Education Advocacy: Three Lessons from the Field

Boards aren’t working. It’s been more than a decade since the first wave of post-Enron regulatory reforms and, despite a host of guidelines from independent watchdogs such as the International Corporate Governance Network, most boards aren’t delivering on their core mission: providing strong oversight and strategic support for management’s efforts to create long-term value. How can companies strengthen their boards’ knowledge and help directors build, maintain, and refine a long-term mind-set? more

The Power of an Independent Corporate Center

Reconciling capital planning and strategic planning is essential to ensure consistency between risk and business strategies. As capital becomes a scarce resource, banks must consider, as they never have before, the cost of capital, while still pursuing growth and profit. Banks that use their capital inefficiently will be left behind. However, the goal of alignment remains an aspiration for many. Fewer than half of European banks define capital planning in line with business strategies and their risk-return profile. more

A New Approach to Oil-and-Gas Exploration

Returns on capital in the oil and gas sector have halved since 2007, and even when the price of oil was $100 USD/bbl many operators were struggling to fulfill their capital commitments. Now that that the oil price has halved, it is clearer than ever before that there is a strong need for operators to transform their cost base. And well delivery, which on average accounts for forty to fifty percent of the capital spending for exploration and production, is a good starting point. We believes that the reduction potential can be as high as fifty percent when multiple levers can be optimized simultaneously. more

China and India: Room for Reform

In China's case, must-do reforms include deregulating interest rates, boosting competition in banking, and improving lending and risk management. Beijing also needs to develop its corporate bond and equity markets and speed the setup of an electronic payments system. Together, these changes could boost gross domestic product by $320 billion a year. In India, financial system reform, coupled with further economic liberalization, could add $48 billion a year to gross domestic. This would increase per capita income levels by a third and raise the country's annual growth rate over the next ten years — thus matching China's rate of expansion. more

Building Globally Competitive Cities: The Key to Latin American Growth

Senior executives searching for growth face a stark new reality: roughly 400 midsize cities in emerging markets—cities they mostly will have never heard of—are posed to generate nearly 40 percent of global growth over the next 15 years. That’s more growth than the combined total of all developed economies plus the emerging markets’ megacities (those with populations of more than ten million, such as Mumbai, São Paulo, and Shanghai), which together have been the historic focus of most multinationals. Learning about consumer attitudes in the emerging markets’ “middleweight” cities, figuring out market entry strategies for them, and deciding how to allocate resources within and across them will all be crucial priorities in the years ahead. more

Basel III and European Banking: Its Impact, How Banks Might Respond

At this month’s G-20 summit in Seoul, South Korea, global leaders endorsed the new rules on bank capital and funding issued by the Basel Committee on Banking Supervision. Now, banks in Europe and the United States face the challenge of finding ways to substantially boost their stocks of capital and funding under the new rules, which are intended to make the international banking system more resilient by addressing many of the flaws that became apparent during the credit crisis. more

Frontline Lessons in Transforming a Large University Hospital

Implementation of the Patient Protection and Affordable Care Act (ACA) will usher in dramatic shifts in health insurance coverage over the next decade. For health systems, one of the most important changes will be the significant growth of the individual insurance market. In 2010, only fourteen million people—about five percent of the US population—belonged to this segment. By 2019, this figure is likely to rise to twenty to thirty-five million, primarily because of two related trends: first, many currently uninsured patients will gain coverage on the health insurance exchanges, driven by the individual mandate and federal insurance subsidies; second, workers will likely move from sponsored insurance to individual plans on the exchanges. more

$118 Trillion and Counting: Taking Stock of the World's Capital Markets

When exchange rates are volatile, companies rush to stem potential losses. What risks should they hedge—and how? We provide a comprehensive map of capital markets in the early stages of the financial crisis, drawing on three proprietary databases that cover the financial assets, cross-border capital flows, and foreign investments of more than 100 countries since 1990. In addition to providing insights into broad long-term trends shaping capital markets, the research examines how the crisis affected parts of the US private debt.  more

Better Forecasting for Large Capital Projects

Large capital investments that are completed on schedule and within their budgets are probably the exception rather than the rule—and even when completed many fail to meet expected revenues. Executives often blame project underperformance on foreseeable complexities and uncertainties having to do with the scope of and demand for the project, the technology or project location, or even stakeholder opposition. No doubt, all of these factors at one time or another contribute to cost overruns, and schedule delays. more

Private Equity: Ability to Secure Investment for Strategic Priorities

Executives are always looking for ways to expand their businesses, and diversification is one approach they regularly ask about. The answer is always unambiguous: diversifying, in itself, is neither good nor bad; what matters is whether a company can add value. Although more than seventy percent of large companies around the world already operate in more than two industries, our research finds that creating value through diversification is a lot easier in emerging economies than in developed ones. The emergence of such mega-institutions and the ways in which they are developing their extraordinary scale and scope represent a basic structural change in the landscape of business. Although the average mega-institution doubled its revenues from 1984 to 2004, by far the most striking increase has come in these companies' market capitalization, which jumped three-folds, respectively, during that period. more

How Brazil Can Connect, Compete, and Thrive

As Brazil steps into the international spotlight as host of the 2014 World Cup and the 2016 Olympics, it is also celebrating a quarter century of democracy and political stability. The nation’s official poverty rate has been cut by half since 2003. Its rich resource endowments ensure that Brazil will remain one of the world’s leading exporters of commodities for years to come. But after a decade of rapid growth and falling poverty rates, the economy has been losing momentum. more

Is Sports Sponsorship Worth It?

The Fédération Internationale de Football Association stands to make $1.4 billion from sponsorship deals with twenty major companies during the World Cup in Brazil. That’s ten percent more sponsorship revenue than from the last World Cup, in South Africa. Although significant, that’s still far below US corporate spending on sports sponsorships, which grew to an estimated $20 billion in 2013—equal to one-third of total US television advertising and one-half of digital advertising. more

Protecting the Enterprise with Cybersecure Technology

Digitization of data, products, and processes is an increasingly important driver of economic growth, but it also creates a host of cybersecurity challenges and vulnerabilities. The push toward greater multichannel integration, for instance, adds significantly to the customer experience but introduces many more interfaces that intruders can exploit. Likewise, companies’ closer colla­b­oration with business partners, customers, advisers, and other third parties can enrich everything from product development to recruiting but can also result in more complex, conjoined supply chains and information flows. Hybrid delivery models, in which some business services and processes are moved to the cloud and managed by external providers, extend the security perimeter and add to the sweep of activities that companies must monitor to detect attacks on their environments. more

Megaprojects: The Good, the Bad, and the Better

Megaprojects—multibillion dollar investments—often require once-in-a-lifetime commitments of resources and capital. Yet, 85% of megaprojects exceed budgets and schedules. The consequences for both owners and contractors can be disastrous. For owners, overruns not only affect their bottom line, but also lead to squandered business opportunities and compromised credibility. On the other hand, contractors who exceed budgets and schedules erode resources, profits, and perhaps most importantly, client trust. Projects of this size are naturally more challenging than smaller projects. In our experience, carefully planned megaprojects can succeed, if both parties’ objectives are properly aligned and communicated, and when best practices for project delivery are consistently applied. more

The New Barbarians—Shareholder Activists

It’s late afternoon in the boardroom, and the head of a major construction company is in the hot seat. A director with a background in the industry is questioning an assumption underlying the executive’s return-on-invested-capital (ROIC) forecast: that the industry’s ratio of leased (versus owned) equipment will remain relatively constant. The business leader appears confident about the assumption of stability, which has implications for both the competitive environment and for financial results. more

The Clairvoyant Airline

You don’t have to look far these days to find an organization that is trying to use data and advanced analytics to improve their customers’ experience and drive operational efficiency. In a wide variety of industry sectors across the globe, market leaders and new entrants alike are investing in data-driven innovation. This is particularly relevant for airlines. The opportunity in this sector is, however, much more substantial than it first appears: we call it “the clairvoyant airline.” more

Strategic Commodity and Cash-Flow-At-Risk Modeling

When a large company faces a headwind in its existing businesses, consolidation and efforts to transform the portfolio are its most plausible ways to grow. Even so, these are not without risk. Consolidation strategies have a better chance for success when a company can show that it has "earned the right to buy." Do its operating margins and returns on invested capital compare favorably with those of its industry peers? Has it created value through mergers and acquisitions in the past? The answers to these questions—as well as the industry's readiness for consolidation—have a direct bearing on whether buying makes sense than selling. more

Better Investment Performance for Public Pension Funds

To secure future growth, banks must fundamentally transform their economics, businesses, and cultures. Banks are trying madly to raise it, investors are wary of giving it, and lenders seem keener than ever to hang on to it. Strange, then, that we hear so little about how to manage the scarce resource of the day: capital. One reason for the lack of discussion is the sorry current state of the art of capital management. In the run-up to Basel II, banks treated the subject with appropriate energy. more

Business, Society, and the Future of Capitalism

Private capital is an enormous source of global wealth that has not historically played as significant a role in development as its scale would suggest. This is not for lack of interest. Private capital is constantly seeking investment opportunities. However, it only commits to those prospects that meet its appetite for risk and reward. Due to a variety of factors, many opportunities in developing countries are often perceived as overly risky or uncertain for the majority of investors. more

Maximizing the Potential of Resource Driven Economies

Company breakups through spin-offs date back at least a hundred years. Many of the earliest and best-known ones were mandated by courts to split up monopolies, including the 1911 breakup of Standard Oil into thirty-four separate companies, as well as the 1984 breakup of AT&T into eight companies. After the AT&T breakup, spin-offs became a more common way for companies to change their strategic direction. American Express, for example, spun off Lehman Brothers, ending its strategy of becoming a financial supermarket. more

Capturing the Investment-Banking Opportunity in Southeast Asia

The economic rise of Asia has been much noted. But many have not realized that this is not just a story about the emerging giants, India and China. Countries that are a part of the Association of Southeast Asian Nations (ASEAN) are also an important contributor to Asia’s growth. By 2009, this region already accounted for nine percent of Asian wholesale banking revenues and thirteen percent of capital markets and investment-banking (CMIB) revenues. To be sure, these are not dominant positions. But several key ASEAN economies will grow faster than the rest of Asia over the next five years. GDP growth in Vietnam (seven percent), Indonesia (six percent), and Malaysia (five percent) will be notably faster than in the established markets of Japan (two percent) and Australia (three percent). more

Enlisting Productivity to Reinforce European Defense

In an era of fiscal restraint, the defense future of Europe will depend on how well it can bring productivity into the equation. European governments are pinched between two pressures: a need to commit more resources to their collective defense, and their straitjacketed finances. On the one hand, Europe is under pressure, both internally and from its allies, to take more responsibility for defense and security, especially in its immediate neighborhood. NATO Secretary General Anders Rasmussen has indicated that Europe should share the burdens of defense and clearly commit itself to contributing to certain core capabilities—or even to providing a full spectrum of capabilities. more

The Voice of Experience: Public versus Private Equity Boards

Advocates of the private-equity model have long argued that the better PE firms perform better than public companies do. This advantage, these advocates say, stems not only from financial engineering but also from stronger operational performance.  Directors who have served on the boards of both public and private companies agree—and add that the behavior of the board is one key element in driving superior operational performance. Among the twenty chairmen or CEOs we recently interviewed as part of a study in the United Kingdom, most said that PE boards were significantly more effective than were those of their public counterparts. more

African Youth Tribute Nelson Mandela through Civic Action for Development

Much has been accomplished in South Africa since the end of apartheid and the beginning of democracy twenty years ago. Despite a history of racial inequality and civil protests, South Africa defied most expectations by negotiating a peaceful transition to full democracy and by setting the foundations for an inclusive society. Under the stewardship of Nelson Mandela, the first democratically elected president, South Africa’s leaders came together to achieve this momentous goal, which many had doubted was possible. We can celebrate two decades of democracy thanks to the vision and wisdom of South Africa’s leadership. more

Capturing the Full Potential of Design to Value

Do you really know what your customers want? That’s never been an easy question. Yet it’s even more difficult to answer today, when companies such as Airbnb, Amazon, Google, and Uber have shaken up the competitive landscape by raising the bar on consumer expectations. They don’t just provide useful products and services; they create experiences that people love. They do it by applying a user-centered perspective that unearths opportunities to create products and services that delight and empower customers. more

Transforming Cities through GIS Technology and Geospatial Analytics

We’re all familiar with using maps to figure out where to go, or how to get from point A to point B. But now we can also use maps to figure out where burglaries are most likely to occur in a particular city, the parts of a country most in need of prenatal health-care clinics, and where a parking spot just became available in a congested neighborhood. The rapid retrieval and presentation of such highly specific, extremely valuable information is possible because of one innovative technology: geographic-information systems (GIS). more

Colombia’s Lesson in Economic Development

Many developing countries are frustrated because better macroeconomic conditions haven’t led to faster economic growth. Clearly, earning an investment-grade rating on sovereign debt isn’t enough. Colombia has enjoyed a surprising political and economic turnaround over the past decade. Nonetheless, many economists assert that the improvements in the business environment are necessary but not sufficient to ensure sustainable economic development. The country’s government concluded that to achieve enduring success, it would have to focus on making specific business sectors more competitive. Its Productive Transformation Program, launched in 2007, created a novel public–private partnership engaging eight industry sectors. Early results suggest that tighter collaboration has not only removed investment barriers but also built competitive advantages. more

The Three Arrows of Abenomics

In his drive to kick-start the Japanese economy, Prime Minister Shinzo Abe, shortly after taking office in 2012, introduced a large fiscal stimulus and put in place a bold program of monetary easing. Since then, Japanese policymakers have been working to launch what Abe calls the third “arrow” of his agenda: arduous reforms of key industries and the demolition of structural barriers to growth. But the focus on public policy has left a “fourth arrow”—the private sector—untouched and seemingly ignored. This is unfortunate, because the government cannot fix Japan’s ills on its own. Annual productivity growth has been stubbornly sluggish, rarely rising above two percent for much of the past two decades, reflecting both missed opportunities and declining cost competitiveness.. more

Inventing the 21st-century Purchasing Organization

A decade of globalization-fueled competition has opened the eyes of executives everywhere to the strategic benefits that can be achieved through the intelligent use of purchasing and supply management. These include more competitive supply chains, improved product development, and faster times to market—in addition to the significant cost advantages associated with sourcing from low-cost countries. Often, however, evolution in the way executives think about purchasing hasn’t translated into results. A dearth of talent derails the improvement efforts of many companies, while others suffer from a misalignment between purchasing and the broader company strategy or from low or misguided aspirations. more

Fiscal Management Fix: Simple Math—and a Very Big Stick

The greatest threat facing the United States is its large debt, which is projected to grow even larger over the next decade. The political gridlock in the presence of this debt problem has produced one downgrade of the federal government’s bonds already. To avoid another and fix the US federal government, all that is needed is arithmetic: Addition. Subtraction. Sum. Difference - specifically, a statute should require that the House of Representatives and the Senate pass, and the president sign, an annual budget that carries the force of law. more

Inside the US Stimulus Program: Implications for Three Industries

The US government is beginning to spend vast sums to jump-start the economy. The opportunities for the private sector are huge, but so are the changes it must make to benefit from them. The American Recovery and Reinvestment Act (ARRA) of 2009 represents the largest government intervention in the US economy since the New Deal. The total cost comes to a towering 5.4 percent of GDP—almost equal to federal expenditures on everything but military and mandated social programs during 2008. More than seventy percent of the money is to be spent by the end of fiscal year 2010. more

Leadership as the Starting Point of Business Strategy

When it comes time to implement a strategy, many companies find themselves stymied at the point of execution. Having identified the opportunities within their reach, they watch as the results fall short of their aspirations. Too few companies recognize the reason. Mismatched capabilities, poor asset configurations, and inadequate execution can all play their part in undermining a company's strategic objectives. Although well-regarded corporations tend to keep these pitfalls squarely in their sights, in our experience far fewer companies recognize the leadership capacity that strategies will require, let alone treat leadership as the starting point of strategy. more

The North Sea: Unique Opportunities, Major Challenges

Offshore oil and gas asset production efficiency has fallen to record lows, costing industry and government billions in lost revenue and jeopardizing the long-term sustainability of the basin. We propose three solutions to tackle this problem: fix the basics of reliability and maintenance; establish standards in common operating tasks; and regenerate critical infrastructure within prominent hubs. The North Sea has been an enormously successful offshore oil and gas basin. To date, the industry has produced some 42 billion boe in the UK and 39 billion boe in Norway. However, sadly, not all fields today can claim the same. more

Japan’s Uncertain Energy Future in the Post-Fukushima Era

Western governance has transparency and accountability but lacks continuity. Eastern governance has long-term discipline but lacks public participation. Each can improve by learning from the other. Since the Fukushima incident in 2011 and the subsequent nuclear shutdowns, Japan has entered a period of energy uncertainty that is likely to extend until the next decade.  There are three main issues shaping the outlook for power generation in Japan. more

Australia’s Economic Performance

The Australian economy has undergone significant and extensive reform in the last fifteen years. Major government-led changes have transformed its financial system, business regulations and industrial relations environment, and reduced trade protection. There has also been much change in business practices, and in the relationships between employers, employees and unions. Yet despite these efforts, Australia’s relative economic prosperity has not changed since 1970. Its GDP per capita is thirty per cent behind the best performing country, the United States. Most of this gap is due to lower labor productivity, and the remainder to lower employment per capita. more

US Healthcare Reform: A Legislative Pathway for Biosimilars

In March 2010, in passing the US healthcare reform bill, Congress created a legislative pathway for biosimilars and follow-on biologics.  It is meant to increase patient access to expensive biologics, and it will likely spur growth in the biosimilar industry over the next decade, even as it helps to lower health care costs.  The Congressional Budget Office estimates that over the next decade, the legislation will reduce direct spending on biologics by $10 billion in Medicare Part B alone. more

Is GDP the Best Measure of Growth?

No matter how we measure economic growth, it needs to be pursued in a smart way. The extraordinary economic expansion of the past fifty years was clearly a success in terms of GDP: the world economy is six times larger, and average per capita income has almost tripled. But what about the environmental impact of sustained high economic growth? Or growing concern in the developed world about stagnating median incomes and widening inequality? more

The Persian Gulf: Understanding the American Oil Strategy

The Middle East petrochemical industry has seen spectacular growth over the past thirty years based on the availability of low-price gas feedstocks. But with advantaged new gas supply expected to end in most countries in the region over the next few years, petrochemical producers that want to expand domestically face major challenges. They can continue to build up their export industry using naphtha feedstock instead, but companies will have to find new ways to offset the handicap of their geographical location far from major growth markets. While obtaining naphtha at advantaged prices would help their position, the region’s petrochemical producers should become leaders in operating and functional efficiency. This will in turn require a broad mobilization to build the managerial and technical capabilities needed to develop and further grow their businesses. more

Organizing the Government-Affairs Function for Impact

Larger shares of executives than last year say governments and regulators will affect their companies’ economic value, according to results from our third survey on how companies manage their external affairs, yet few say their companies engage proactively with these stakeholders or are more effective at implementing external-affairs practices.  This survey asked executives about the ways their companies interact with a broad range of stakeholders, the tools they use to understand external opinions, and their effectiveness in managing those relationships. more

The Board’s Role in Mergers and Acquisitions

In many conversations with senior executives and corporate directors, we’ve heard variations on the theme that deep board involvement in mergers and acquisitions (M&A) encroaches on the line that separates governance from management. That line is critical. Yet our experience suggests that when it comes to M&A, many boards and management teams are drawing it in the wrong place. more

After Black Swans and Red Ink: How Institutional Investors can Rethink Risk Management

The world will need to spend almost $57 trillion on new infrastructure over the next fifteen years. That’s an enormous sum, but contrary to popular belief, there is no shortage of capital; in fact, there will be more than enough as both governments and investors increase their focus on infrastructure. The past five years, for example, have seen a steady rise in the number of institutional investors allocating assets to infrastructure, as well as the establishment of infrastructure as an asset class in its own right. more

A Glimmer of Hope for Newspapers

News consumption in the United Kingdom rose by twenty percent in the past three years, according to new Burk research. Average consumption has risen to seventy minutes a day, compared with sixty minutes in 2006—an increase driven almost entirely by people under the age of thirty. Two-fifths of those in this age group said they felt the need to be the first to hear the news, compared with just ten percent of people aged fifty to sixty. This need for immediacy is reflected in younger news consumers’ choice of media: they overwhelmingly prefer to get their news from television and the Internet. more

Hong Kong’s Successful Self-Financing Infrastructure Formula

Cities around the world are building or expanding public-transit systems to cope with population growth and urbanization. But even as metro systems get bigger and serve more people, most continue to lose money. For more than three decades, though, Hong Kong’s MTR Corporation has defied the odds and delivered significant financial and social benefits: excellent transit, new and vibrant neighborhoods, opportunities for real-estate developers and small businesses, and the conservation of open space. The whole system operates on a self-sustaining basis, without the need for direct taxpayer subsidies. more

Sustaining Vietnam's Growth: The Productivity Challenge

During the past quarter century, Vietnam has emerged as one of Asia’s great success stories. In a nation once ravaged by war, the economy has posted annual per capita growth of 5.3 percent since 1986—faster than any other Asian economy apart from China. Vietnam has benefited from a program of internal restructuring, a transition from the agricultural base toward manufacturing and services, and a demographic dividend powered by a youthful population. The country has also prospered since joining the World Trade Organization, in 2007, normalizing trade relations with the United States and ensuring that the economy is consistently ranked as one of Asia’s most attractive destinations for foreign investors. more

Escaping the Sword of Damocles

Russia's economy has been growing rapidly over the past decade, with per capita GDP doubling over this period. Labor productivity remains low, but improvements have been promising. In five sectors—steel, retail, retail banking, electric power, and residential construction—productivity stands now on average at 26 percent of US levels in 2007. Last time around, Russia experienced a dramatic economic turnaround: GDP grew at an average annual rate of 7 percent between 1998 and 2006, vaulting the country to 53rd in the world rankings of wealth. Wages increased strongly as well, with disposable income rising 26 percent a year in nominal terms. more

Implementing a Citizen-Centric Approach to Delivering Government Services

Delivering services to citizens is at the heart of what most government agencies do. Tasks like paying taxes, renewing driving licenses, and applying for benefits are often the most tangible interactions citizens have with their government. Services are therefore critical in shaping trust in and perceptions of the public sector. Citizens today expect more transparent, accessible, and responsive services from the public sector. And those expectations are rising. more

The Science of Organizational Transformations

When making large-scale organizational changes, the design of a transformation’s initiatives is not a matter of guesswork. For employees (and organizations) to move from current to desired mind-sets and behaviors during a transformation, our research and experience indicate that the most effective transformation initiatives use the principles of the “influence model". more

German Mechanical Engineering: An Integrated Approach to Operational Excellence

German mechanical engineering has always been the backbone of the German economy. Even internationally, it stands for progress, performance, and reliability. In the past twenty years, it has been able to grow at 2.2 percent1 p.a. and to generate an average EBIT margin of 3.9 percent. Hardly any other industry is so diverse, and developing with so much rigor. Reason enough, then, for German engineers to confidently look toward the future. more

Improving Disaster Recovery: Lessons Learned in the United States

We live in a world where natural disasters are increasing in frequency and severity. A large proportion of disaster-related losses are borne by governments: for example, estimates suggest that the United States has a disaster-related unfunded liability that could be even greater than that of Social Security (up to $7.1 trillion versus $4.9 trillion). And governments across the world increasingly share the common challenge of having to design and lead expensive and complex recovery efforts that often take years. more 

Towards Inclusive Capitalism

Capitalism is under attack. The financial crisis of 2008, the stagnation of the middle class in many developed countries, and rising income inequality are challenging some of our most deeply held beliefs about how a fair and well-functioning society should be organized. Many business leaders are of two minds about the situation. They note that market capitalism has yielded massive increases in human prosperity, particularly in the West in the 19th and 20th centuries. More recently, it has lifted hundreds of millions from poverty in emerging economies. Yet despite these historic accomplishments, it’s also easy to worry that something is wrong with how the system is performing today. more

The Archipelago Economy: Unleashing Indonesia's Potential

When people think of Indonesia today, they think of temples or of its famously teeming cities, but this country of 240 million and counting is a much more modern, diversified, and dynamic economy than they assume. Most international businesses and investors know that modern Indonesia boasts a substantial population and a wealth of natural resources. But far fewer understand how rapidly the nation is growing. Home to the world’s 16th-largest economy, Indonesia is booming thanks largely to a combination of domestic consumption and productivity growth. By 2030, the country could have the world’s 7th-largest economy, overtaking Germany and the United Kingdom. more

Using PPPs to Fund Critical Brownfield Infrastructure Projects

Given the long life span of most infrastructure assets—from 15 to more than 100 years—a higher share of global savings will have to be allocated to infrastructure in coming years. The fast-growing savings managed by institutional investors—estimated at seventy trillion dollars by the Organisation for Economic Co-operation and Development—must play a central role. more

Supreme Court Strikes Down Federal Contribution Limits

The United States Supreme Court today (April 2, 2014) in a 5-4 decision authored by Chief Justice Roberts invalidated the federal law restriction that previously limited individuals to aggregate contributions to all Federal candidates, committees and political parties to $123,200 for a two-year election cycle. Today's Court decision in McCutcheon v Federal Election Commission stated that such limits “intrude without justification on a citizen's ability to express the most fundamental First Amendment activities.” The Court further found that, given the mismatch between the Government’s stated governmental objective and the means selected to achieve it, the aggregate limits fail to survive Constitutional scrutiny. more

How Much Would London Benefit From A Heathrow Expansion?

Good transport infrastructure underpins economic growth. The United Kingdom’s strategic roads, railways and airports1 are, however, some of the most congested in the world. On average, for each kilometre of motorway 113 million passenger vehicle kilometres are driven nationally each year, against 47 million in Germany, 39 million in France and 36 million in the United States. In addition, the UK’s roads carry more freight per kilometre of motorway than any other major economy apart from Japan. The railways are carrying more passengers than at any time in the past 60 years, on a network roughly three-fifths of its size in 1950. Meanwhile, most major UK airports compare poorly with their international counterparts, although recent upgrades have improved facilities. The 2010 Skytrax survey, for example, ranks Heathrow 21st out of 163 airports worldwide for the quality of its infrastructure, Gatwick 64th and Stansted 99th. more

Why Politicians Prefer Austerity to Long-Term Fiscal Reform

Some months ago, I attended a conference in Stockholm on the euro crisis. It was organized jointly by the IMF and the Swedish Ministry of Finance and drew a large group of ministers, civil servants from the European Commission and from several member states, heads of fiscal-watchdog groups, and economics professors from both sides of the Atlantic. Throughout the two-day conference, most of the economists argued against trimming budgets in the short run, fearing that such measures would lead to further weakening of demand in an already weakened economy. In their view, the budgetary problems should be solved by a long-run policy of structural reforms of the labor market, health care, and the pension system. more

Increasing the ‘Meaning Quotient’ of Work

At few moments since the end of World War II has downward pressure on prices been so great. Some of it stems from cyclical factors—such as sluggish economic growth in the Western economies and Japan—that have reined in consumer spending. There are newer sources as well: the vastly increased purchasing power of retailers, such as Wal-Mart, which can therefore pressure suppliers; the Internet, which adds to the transparency of markets by making it easier to compare prices; and the role of China and other burgeoning industrial powers whose low labor costs have driven down prices for manufactured goods. more

From 'Made in China' to 'Sold in China'

The urban consumer markets, in particular, will develop rapidly, moving from 43 percent of the population today, to 69 percent by 2015, and 76 percent by 2025. Most important, this urban phenomenon will spread beyond China’s large wealthy coastal cities, to smaller cities further inland.  As the incomes of the new middle class rise, China will become the third-largest consumer market by 2025. more

Moving Corporate Culture, Moving Boundaries

Corporate leaders can improve an organization's decision-making ability by identifying the prevalent biases and using the relevant tools to shape a productive decision-making culture. Corporate leaders should first consider which decisions are truly strategic, as well as when and where they are made. Applying process safeguards to key meetings in formal strategic-planning exercises is tempting but not necessarily appropriate. Often the real strategic decision making takes place in other forums, such as research committees. more

Building the Cities of the Future with Green Districts

At the current pace of urbanization, the world’s cities will add 65 million inhabitants a year between now and 2025. The resulting demand for infrastructure will mean that each year, India alone will need to add as much floor space as exists in all of Chicago, and China more than twice that. The way the world builds now will determine urban sustainability—in emissions, waste production, and water use—for decades. Our definition of a green district is a densely populated and geographically cohesive area that is located within a city and employs technologies and design elements to reduce resource use and pollution. more

Ten Tips for Leading Companies Out of Crisis

Even good managers can miss the early signs of distress. Growing numbers of organizations—including banks on both sides of the Atlantic, a global natural-resources group, and a leading UK retailer—are adding an important new "stone" to the 21st-century business lexicon. "Performance and health" is a metaphor that derives its power from a simple comparison with the human body. Just as people may seem reasonably well today but may not have the physical condition for the rigors of a long and active life, so too companies that are profitable in the short term may not have what it takes to perform well year after year. more

A Development Agenda for Haiti’s New Government

The election of Haiti’s new president represents a pivotal moment and a management challenge that will equally confront any of the candidates who stood for election on March 20 (in preliminary results announced April 4, after this piece was first published, Michel Martelly was elected). Fourteen months after Haiti’s devastating earthquake, images of tent camps, crowded hospitals, and chaos abound. Yet they belie the country’s potential and recent progress. more

Festering Global Problems Require Globalized Financing

The G-20 meeting in London earlier this year set the direction for reforming the regulation of financial services to prevent a recurrence of the present crisis. The causes of the current crisis resemble those of many previous ones: banks that didn’t have enough capital lent too much, too easily, relying on wholesale funding that disappeared when the inevitable concerns about asset quality arose. Yet there are important differences this time. The current problem started in what were regarded as the world’s safest and most sophisticated markets and spread globally, carried by securities and derivatives that were thought to make the financial system safer. more

The Hypotenuse and Corporate Risk Modeling

The issue of counterparty risk is increasingly a topic of heavy discussion across all industries. Yet there are large differences in risk-management sophistication: while advanced methods for managing and mitigating risks are applied in both the power and financial-services industries, many other industries still lag behind. Among those still at the initial-transparency stage is the transportation and infrastructure industry, which applies risk-management methods only at a rudimentary level. That’s a problem, because the need for systematic risk assessments and more sophisticated risk management in supplier and contractor selection is obvious. more

Design for Sustainable Fisheries—Modeling Fishery Economics

Fisheries provide employment for 180 million people worldwide and represent a significant percentage of the animal protein consumed globally, particularly in developing countries. Fish and fishery products are one of the most widely traded agricultural commodities with exports worth more than $85 billion in 2008. But marine fisheries today are under pressure. While fisheries in some developed countries are recovering, overfishing has impoverished the state of the marine ecosystem globally. more

Transforming Government in France

Long before governments around the world faced the current economic crisis, they wrestled with many difficult, complex challenges—healthcare, social security, education, national security, crime, and critical infrastructure. The President-elect faces a significant challenge. Since 1995, France has lost 300,000 jobs in various industries, from aviation to automotive. Unemployment remains high, despite some recent improvement. France's productivity growth has slowed, and its share of global exports of manufactured goods has fallen. The country's large public sector is an inefficient drag on the performance of the economy as a whole. more

Due Diligence in China: Art, Science, and Self-Defense

It’s not often that the credibility of an entire class of companies is called into question at once. The aggregate market capitalization of US-listed Chinese companies fell in 2011 and 2012 by seventy percent—and around one in five was delisted—even as the NASDAQ rose by 12 percent. Nor is delisting of Chinese companies purely a US phenomenon: since 2008, around one in ten Chinese companies listed in Singapore has also been delisted or suspended. The extent of the damage to investor confidence is hard to gauge. The broad decline in market capitalization suggests investors may be tarring even the most transparent Chinese companies with the same brush. more

How Inflation Can Destroy Shareholder Value

Whatever role low interest rates and high government spending may have played in helping economies to stabilize during the recent global recession, they now have companies, investors, and policy makers alike on the lookout for inflation to come roaring back. Some economists are already warning of a return to the levels of the 1970s, when inflation in the developed countries of Europe and North America hovered at around ten percent. That’s not uncommon in Latin America and Asia, where emerging economies have seen double-digit inflation for many years. more

Technologies that Could Transform How Industries use Energy

As the world grows, in both wealth and population, so will the demand for energy: global primary-energy consumption is on course to increase by twenty percent between now and 2030. At the same time, concerns over pollution and climate change are forcing businesses and governments to think hard about how they produce and use energy. Energy efficiency, which is sometimes called the “fifth fuel” (after coal, gas, nuclear, and renewables), can play an important role in helping the world meet its demand for power and mobility. more

The Best of Times and the Worst of Times for Institutional Investors

Why is it so difficult to match long-term money with long-term investment projects such as new infrastructure? Policy makers have certainly made a priority of the search for new ways to finance long-term growth. At the same time, institutional investors have recognized the need for alternative long-term instruments to help meet long-term commitments such as pension payouts or insurance policies. Yet matching investment demand (for new infrastructure) and supply (from institutional investors) remains elusive. more

The Growing Role of Emerging Markets in Aerospace

It would be easy—but wrong—to conclude from recent events in the aerospace industry that its globalization efforts have gone too far. To be sure, both Boeing and Airbus have discovered, in developing their new aircraft, that involving suppliers from around the world creates complex management, coordination, and design integration challenges. Nonetheless, our research indicates that the industry’s globalization remains in its infancy. China, India, and Russia are likely to emerge as significant players over the next two decades, a development that will give Western companies major short-term cost-reduction opportunities that they must capture. more

Game Changers: Five Opportunities for US Growth and Renewal

The US economy is struggling to find a new formula for vigorous growth. But all growth opportunities are not created equal. New Burk research pinpoints five catalysts—in energy, trade, technology, infrastructure, and talent development—that can quickly create jobs and deliver a substantial boost to GDP by 2020. Four years after the official end of the Great Recession, US economic growth remains lackluster. But there is more at work here than simply the business cycle: strains in the labor market were apparent long before 2008. Today, labor-force participation is at a 34-year low, and the United States has two million fewer jobs than it did when the recession began. Weak investment, demographic shifts, and a slowdown in productivity growth are dampening the economy’s trajectory. more

Nigeria's Renewal: Delivering Inclusive Growth in Africa's Largest Economy

This week's U.S.-Africa Leaders Summit presents Washington with a historic opportunity not only for broad relationship-building but also for deepening its economic ties to the continent. It would be a mistake to assume that the benefits will all flow from the United States to Africa. There is huge economic potential in this gathering for the U.S. economy, too. As global investors and business leaders look to Africa as the next region of transformative economic growth, they are paying increasing attention to Nigeria. With about 170 million inhabitants, the country has long been the most populous in Africa, but it is only now being recognized as the continent’s largest economy. more

An Economy that Works: Job Creation and America’s Future

Over the past three decades, as developing economies industrialized and began to compete in world markets, a global labor market started taking shape. As more than one billion people entered the labor force, a massive movement from “farm to factory” sharply accelerated growth of productivity and per capita GDP in China and other traditionally rural nations, helping to bring hundreds of millions of people out of poverty. To raise productivity, developed economies invested in labor-saving technologies and tapped global sources of low-cost labor. Today, the strains on this market are becoming increasingly apparent. more

In Defense of Congressman Paul Ryan's Plan for the Budget

First, it is worth citing budget estimates from the Congressional Budget Office (CBO). According to CBO, Congressman Ryan’s Roadmap for America’s Future Act would dramatically reduce the build up of America’s debt. CBO estimates that his plan would result in a debt to gross domestic product ratio (GDP) of 69 percent in 2020, rising to 99 percent in 2040, and then decreasing to 77 percent in 2060. This is in contrast to CBO’s estimates for its alternative fiscal scenario (which assumes a continuation of current policy) where the debt-to-GDP ratio is 87 percent in 2020, and then rises sharply to 223 percent in 2040 and 433 (!) percent in 2060. more

Shed No Tears for Pooling’s Demise

When the US Financial Accounting Standards Board (FASB) on June 30 eliminated the “pooling” method of accounting for business combinations, the usually staid world of accounting rules saw the curtain fall on one of its most vociferous and political dramas in recent memory. In taking aim at pooling, which had been one of two accepted ways to account for combining businesses, FASB sought to bring greater clarity and consistency to accounting rules. But its effort drew the ire of corporate executives and venture capitalists, some of whom went so far as to invoke the national interest to preserve an accounting method they considered a dynamo of transaction activity and economic prosperity. Even members of the US Congress jumped into the fray over the otherwise arcane accounting topic. more

Capital Program Coordination (District of Columbia)

The past decade saw an unprecedented rise in the fortunes of emerging-market banks. Less affected by the global financial crisis than their developed-world peers, their collective revenues grew from $268 billion in 2002 to $1.4 trillion in 2012. The future, however, may be a different story. Historically strong capital and liquidity positions have eroded, and operating pressures are mounting from a combination of factors including tighter US monetary policy, stronger growth in developed markets, and a changing regulatory landscape. more

Semiconductors in China: Brave New World or Same Old Story?

Research and development is the lifeblood of the semiconductor industry—so it is no surprise that R&D tends to be the highest-pressure corner of this high-intensity business. Much of this pressure results from the fact that time to market is a crucial metric for semiconductor makers: speed, specifically on-time delivery, is a key success factor in a market characterized by tight design-in windows, shortening product life cycles, and relentless price deflation. For some, Moore’s Law still sets the industry’s pace; ever-rising investments and technology challenges, such as rising chip complexity, are also a factor. For others, the core challenge is mastering system design, which involves integrating hardware and software blocks, as well as various films, coatings, and layers, and ensuring they are customized to reflect customer and end-consumer preferences. Indeed, a number of leading-edge wireless semiconductor players now employ twice as many software engineers as traditional hardware engineers. more

Developing a Regional Healthcare System

Although they may differ in structure or philosophy, health systems around the world have a common goal: to improve the health of the population they serve by delivering high-quality, accessible, and financially sustainable health care. Given ballooning health care costs and increasingly demanding consumers, achieving this goal is becoming ever more challenging. Quality, access, and sustainability form an elusive triad for most health systems, which struggle with at least one of these dimensions. For example, the United Kingdom has focused heavily on access and has succeeded in reducing wait times significantly, but now, more than ever, it needs to address sustainability as the government begins to squeeze public spending in light of the global financial climate. more

Austerity Measures: A Path to Economic Growth and Renewal in Europe

Europe faces multiple, simultaneous pressures on GDP growth at a time when scope to stimulate growth from public funds is limited by high debt and deficit levels. The threat to growth is unlikely to dissipate in the short or even medium term and significant imbalances in unit labor costs and current account positions between European economies intensify the strain. In this challenging context, Europe has little choice but to pursue structural reform to bolster growth. more

Productivity in Mining Operations: Reversing the Downward Trend

Worldwide mining operations are as much as 28 percent less productive today than a decade ago, according to new Burk research. The results from our new MineLens Productivity Index, which adjusts for declining ore grades and mine cost inflation, show that the pronounced decline in productivity is evident across different commodities and is seen in most mining players and geographies. Compared with industries such as automotive, which obsessively focus on productivity gains, the numbers seem astonishing. more

Getting Beyond Bureaucracy in Human Resources

Companies around the world are cutting back their financial-incentive programs, but few have used other ways of inspiring talent. We think they should. Numerous studies have concluded that for people with satisfactory salaries, some nonfinancial motivators are more effective than extra cash in building long-term employee engagement in most sectors, job functions, and business contexts. Many financial rewards mainly generate short-term boosts of energy, which can have damaging unintended consequences. Indeed, the economic crisis, with its imperative to reduce costs and to balance short- and long-term performance effectively, gives business leaders a great opportunity to reassess the combination of financial and nonfinancial incentives that will serve their companies best through the downturn. more

Can Mitch McConnell Repair the Senate?

The Senate’s incoming majority leader, Mitch McConnell (R-Ky.), has pledged to return the Senate to “regular order.”  As McConnell put it the day after the elections, “First thing I need to do is get the Senate back to normal.” What would a “normal” Senate look like, and can McConnell make it happen? McConnell is not the first leader to bemoan the state of the Senate.  Like Democratic and Republican leaders before him (for starters, Democrats Harry Reid, Tom Daschle and George Mitchell and Republicans Bill Frist, Trent Lott and Bob Dole), McConnell now advocates a Senate that strikes a balance between debate and action, as opposed to a chamber perpetually tied in knots by the parties’ parliamentary warfare. more

What the Senate Change Means For Reform

Calendar year 2015 brings two more threats, or opportunities, depending on one’s politics. The first is yet another Supreme Court challenge. The second comes from various measures that the Republican-controlled Congress may send to the president’s desk to weaken or undo his flagship reform when they take over in January. And, as some opponents of Obamacare stress, the two are related. The court challenge results from less-than-artful wording of the health reform law itself. The law requires most people to carry insurance. To make that mandate affordable, the law also provides tax credits to low- and moderate-income households to help them pay premiums and additional help complying with cost-sharing requirements more

Critical Issues in the Next Decade of China’s Infrastructure Effort

Over the past thirty years, China has become the world’s largest infrastructure market, thanks to its economic reforms and burgeoning urbanization effort. As positive and dramatic as this evolution has been, it is now possible to identify several critical issues that will bear heavily on the direction and shape of China’s infrastructure planning and its construction sector. In brief, the single-source financing model that underpins government-led infrastructure development is not sustainable, the quality of urban infrastructure is poor, and despite the vigor of China’s efforts, infrastructure companies now face overcapacity challenges similar to those in developed economies. more

Civic Infrastructure and the Financing of Community Development

The strength and diversity of non-profit community development organizations heavily influence how community development projects are funded and to what extent private sector financial institutions participate. Variations in the number and geographic reach of lenders and intermediaries for capital, such as community development corporations (CDCs) and development-focused foundations, can significantly tailor national policy, such as the Low Income Housing Tax Credit, to local circumstance. more

Trading the Corporate Portfolio

Corporate strategy planners have never had it tougher. Companies are bracing for the worst economic year in more than a decade. Disruptive technologies and new competitors continue to proliferate. Capital markets are a storm of discontinuity, allocating capital among winners and losers, encouraging the creation of corporations, and removing them when they no longer perform. In this environment large companies are particularly vulnerable. Even as some corporate icons have relied on their sheer size and momentum to survive, they have not created superior shareholder value. more

When and When Not to Vertically Integrate

Vertical integration is a risky strategy—complex, expensive, and hard to reverse. Yet some companies jump into it without an adequate analysis of the risks. This article develops a framework to help managers decide when it is useful to vertically integrate and when it is not. It examines four common reasons to integrate and warns managers against a number of other, spurious reasons. The primary message: don't vertically integrate unless it is absolutely necessary to create or protect value. more

Strategy, Scenarios, and the Global Shift in Defense Power

The art of strategy, in defense as elsewhere, involves understanding possible futures to inform present decisions. Change, volatility, and uncertainty are perennial challenges to the defense strategist and are likely to increase in the coming years. Formulating strategy in these conditions will test planners in the public and private sectors alike. To succeed, decision makers should look behind the headlines of the day to ask the right questions about what will affect their organization in the future. more

South Korea: Finding its Place on the World Stage

As the “Asian miracle” continues to unfold, perhaps the most intriguing—and least understood—of the region’s fast-growing economies is South Korea. During the four decades following the Korean War, it evolved from one of the most abject states in the region to one of the most vibrant, a manufacturing powerhouse that has virtually eradicated poverty, malnutrition, and illiteracy. In a region of fast growth, since the 1960s Korea has increased its per capita GDP more quickly than any of its neighbors. more

What China’s Five-year Plan Means for Business

China’s recently announced 12th five-year plan aims to transform the world’s second-largest economy from an investment-driven dynamo into a global powerhouse with a steadier and more stable trajectory. The plan affects domestic and foreign companies in all industries. To help senior managers decode and understand its provisions, we analyzed the potential impact on 33 industries. Two dimensions stood out: the effect on their profit pools and competitive landscapes. (For a detailed look at this analysis, see the interactive exhibit, “The economic impact of China’s 12th five-year plan.”) more

Senator Murkowski Calls for End to Crude Oil Export Ban

For much of this year, the S&P 500 index has demonstrated fitful but steady growth, lifting it from just over 1,800 in January to just over 2,000 in September—a new record. That’s something of a disconnect with lackluster economic growth and rising interest rates, and it has investors puzzled and executives casting a gimlet eye on their share prices. Whether you think the market is dangerously overvalued, as some worry, or that current high corporate profits and multiples are the result of fundamental changes in the performance of companies depends on your expectations of profit growth, cost of capital, and returns on capital. In fact, much of the market’s value today is clearly tied to underlying sources of economic performance—and, in particular, the high level of profit margins in several high-performing sectors. more

Bringing Discipline to your Sustainability Initiatives

Sustainability has become a part of life for many companies. For some, it’s a matter of meeting demands from customers seeking socially responsible goods and services. For others, it’s about addressing pressure from stakeholders—including investors—or pursuing their own corporate values. For still others, especially those in a resource-constrained environment, it’s a strategic imperative. Whatever the impetus, sustainability has become sufficiently pervasive that defining it and executing business programs, products, and practices with an eye to their environmental and social implications has become a demanding managerial exercise.  more

A Wake-up Call for Big Pharma

The good old days of the pharmaceutical industry are gone forever. Even an improved global economic climate is unlikely to halt efforts by the developed world’s governments to contain spending on drugs. Emerging markets will follow their lead and pursue further spending control measures. Regulatory requirements—particularly the linkage among the benefits, risks, and cost of products—will increase, while the industry pipeline shows little sign of delivering sufficient innovation to compensate for such pressures. more

How do you Govern a Disrupted World?

The collision of four fundamental economic forces—urbanization, technology, demographics, and globalization—is producing monumental change. Global competition and technological change have sped up creative destruction and outpaced the ability of labor markets to adapt. Job creation is a critical challenge for most policy makers even as businesses complain about critical skill gaps. Graying populations are starting to fray social safety nets, and for debt-ridden societies in advanced economies, the challenge can only get more pressing as the cost of capital starts to rise. more

Building Capabilities for Performance

Our 2015 research results indicate that capability building has become one of the top three priorities of executives around the world. How can these leaders best address the priority? To begin with, we know that in successful transformations, organizations identify relevant skill gaps and use needed resources to fill them. To sustain the improvement over time, new capabilities have to become the new norm, so learning and development must take place throughout the organization. more

Africa at Work: Helping Unlock a Continent's Economic Rebirth

The global financial crisis has shown that the developing world no longer holds a monopoly on investment risk. A new risk reality has emerged—one that is ubiquitous and less associated with the developing regions of the world. Thanks to this new reality, combined with macrotrends affecting the global economic landscape, businesses are now looking for new markets in which to invest. In the aftermath of the crisis, the “South–South” expansion of trade and investment is likely to accelerate thanks to the global appetite for natural resources; the effects of climate change will continue to complicate growth and open up new investment opportunities; and changing demographics will have important implications for productivity and demand. Against this backdrop, sub-Saharan Africa offers a better platform for profitable new investments than ever. more

Drawing Humanitarian Lessons from Disasters

Up to a half a million women die each year around the world because of complications arising from pregnancy or childbirth. The majority of these deaths occur in sub-Saharan Africa. Since they are largely preventable, they represent a tragedy playing out every day across the continent. Progress on maternal health there is hampered by health systems that are understaffed, underfunded, and overwhelmed—and thus too fragile and fragmented to deliver the required level or quality of care. Consequently, many countries in sub-Saharan Africa will struggle to meet the United Nations’ Millennium Development Goals for reducing child and maternal mortality by 2015. more

From Aid to Global Development Cooperation

Corporations aren’t alone in focusing on governance; rigorous oversight of management and performance is increasingly important for nonprofits too. Globalization has spurred economic convergence, upending the 20th century economic balance and creating a smaller world where both problems and solutions spill across national borders more readily. The corporate-governance debate in the United States is spreading from the for-profit to the nonprofit world. Well-publicized controversies at organizations such as The Nature Conservancy, the American Red Cross, and the James Irvine Foundation have even caused observers such as Andrew Cuomo, the Governor of New York State, to suggest that the Sarbanes-Oxley Act should be applied to nonprofit boards. more

Matching Place-Based Strategies to the Scale of the Market

The global financial crisis and recession has altered the paths of four influential groups of investors: oil exporters, Asian sovereign investors, hedge funds and private equity. In a 2007 report, we labeled these four the "new power brokers" because their growing wealth and influence reflected a dispersion of financial power away from traditional institutions in developed Western economies and toward new players and other parts of the world. But today, with trade at its lowest level in years, crude prices far below their peaks, and credit markets still constrained, it's fair to ask: are they still power brokers?. more

Manufacturing Growth through Resource Productivity

A decade or so ago, companies in industrial manufacturing and other process industries did not need to focus on resource productivity. If they gave any attention to the topic, it was to undertake small, incremental measures with the hope of generating marginal improvements. That period is over. Today, there is no debate: resource productivity must be among the top priorities—if not the top priority—of industrial manufacturers around the world. more

Pinpointing the Drivers of Performance in Engineering and Construction

There are wide variations in the performance of the world’s 30 leading engineering and construction (E&C) companies, both among regions and within them. In 2014, their average profit margins were 7 percent, but the range swept between 0.4 and 17 percent. The cyclical nature of markets, stiff competition, and the inevitable risks of a sector in which a company’s fortunes are often tied to the performance of just a handful of huge contracts are challenges faced by all. So what makes some companies more successful than others? What drives superior performance? A three-stage analysis points to the answers. more

Same-day Delivery: The Next Evolutionary Step in Parcel Logistics

Same-day delivery has the potential to fundamentally change the way we shop. It integrates the convenience of online retail with the immediacy of bricks-and-mortar stores. In recent years an increasing number of companies have started piloting and operating new models of same-day delivery, including incumbent logistics providers such as DHL, DPD, FedEx, and UPS. Demand is expected to increase significantly given the compelling value proposition of same-day delivery for consumers. more

What’s Next for the Restructuring of Europe’s Banks?

European banks are ripe for restructuring—and a lot of it. After five years of relatively stagnant economic conditions, many of them continue to face pressure from difficult funding conditions, a transition to higher costs of capital, changing regulations, and tighter capital requirements. They need to shed capital-intensive operations and simplify businesses to compete more profitably in fewer market segments. All told, Europe’s banks are considering the sale of up to 725 business lines across various business segments. more

The State of Some Scholarly Economic Literature

Europe’s economic growth since the start of the financial crisis has been sluggish, and the region faces difficult long-term demographic and debt-level challenges. Our research, finds that the convergence of low oil prices, a favorable exchange rate, and quantitative easing has given these economies a chance to unlock new economic dynamism by undertaking ambitious reforms and stimulating job creation and investment. Our report identifies 11 growth drivers in three areas—investing for the future, boosting productivity, and mobilizing the workforce—that can help Europe achieve its aspirations. more

The Perils of Best Practice: Should you Emulate Apple?

It’s no mystery why companies emulate their most successful peers. Tried-and-true approaches often seem preferable to starting from scratch, whether for developing new products or running efficient supply chains. The quest for such methods went global during the 1980s and 1990s as European and US companies sought to retool their operations by transplanting Japanese factory practices, such as kanban and just-in-time production. Management consultants—ourselves included—naturally facilitate the process by extolling successful companies as models from which others can learn proven practices that reduce risks. more

Greater China Urbanization Solution

Ever since China started pursuing a policy of reform and opening-up of markets three decades ago, it has experienced rapid economic takeoff and has made its entry into the ranks of middle-income countries. In 2011, China’s per capita gross domestic product reached $5,400, using current exchange rates. That figure would be even larger using the World Bank’s purchasing-power-parity formula. So, in light of its economic and social progress, China now qualifies as a middle-income country. more

Evaluating Megaprojects: What Constitutes Success?

Megaprojects will always struggle with unforeseen events, regulatory requirements, technical difficulties, financial constraints, and politics. The costs—at least $1 billion—of megaprojects are high. The complexity is increased by the fact that there are many different stakeholders, including owners, managers, sponsors, and local communities, and they all have different perspectives. Moreover, delays and budget overruns are, admittedly, the norm rather than the exception. As a result, many megaprojects are remembered more for these issues than the lasting good they produce. more

An Exorbitant Privilege? Implications of Reserve Currencies for Competitiveness

Sharp exchange rate volatility is a sign of stress in the world currency system and has reignited debate about whether the dollar will continue to be the world's primary reserve currency and what system could emerge in its place. But nobody has asked a more fundamental question—what are the benefits and costs of issuing a global reserve currency? Answering this question may shed new light on how the global currency system might evolve and whether businesses and economies should expect a continuation of an "unmanaged" reserve currency system that increases exchange rate volatility and threatens their competitiveness. more

Enhancing the Efficiency and Effectiveness of Application Development

Most large companies invest heavily in application development, and they do so for a compelling reason: their future might depend on it. Software spending in the United States jumped from 32 percent of total IT corporate investment in 1990 to almost 60 percent in as software gradually became critical for almost every company’s performance. Yet in our experience, few organizations have a viable means of measuring the output of their application-development projects. Instead, they rely on input-based metrics, such as the hourly cost of developers, variance to budget, or percent of delivery dates achieved. more

Making Stores Matter in a Multichannel World

For decades, the retail industry has followed the same straightforward formula for growth: open new stores. By replicating a proven store format in a new catchment area, retailers could reliably enlarge their customer base and count on healthy increases in sales. But the world has changed. More than half of consumers now research their retail purchases online, making purely in-store purchase decisions the shrinking minority. In many categories, e-commerce has dramatically lessened the need for physical stores. “Virtual space”—which we define as the floor space that would be required to generate the sales volume that online retail now accounts for, at a sales density equivalent to the industry average—is expanding at a staggering rate. more

How the New Connected Era is Reshaping Biopharma

Big data, social media, and mobility are shaking up the business models of many industries. In consumer marketing, for example, the traditional consumer-purchasing funnel is giving way to the consumer decision journey. In this new, interactive arena, purchasing choices are mediated by social networks, mobile devices, and peer influence, offering marketers ever more effective ways of managing their brands at a time of stressed budgets. Similar disruptions are rolling through sectors from media to financial services. more

Brand Success in an Era of Digital Darwinism

The Internet has become an indispensable tool for marketers, yet there are still gaps in understanding its role in shaping how consumers choose among brands. With the help of a powerful data set, we have been studying the relationship between the level of digitization across the consumer’s decision journey and the likelihood that a consumer will select a brand after considering and evaluating its qualities. We compiled data on 1,000 brands across a wide range of product categories, covering 20,000 consumer journeys and 100,000 touchpoints along them. The research paints a vivid picture of the factors involved in a consumer’s purchase choice. more

How Asia can Boost Productivity and Economic Growth

Asian economies have much to gain from an agreement on trade in services at the World Trade Organization's mid-December meeting in Hong Kong. Many understandably look to service exports as a source of employment and economic growth. Yet lately you can’t pick up a newspaper, go online, or watch television without hearing continual moaning about the country’s slowing economic growth and the need for “rebalancing.” The reality is that Chinese consumers are going to continue to increase in wealth and complexity. And if you’re worried the country’s economic importance is declining, you’re probably looking at its performance the wrong way. more

How Poland Can Become A European Growth Engine

Twenty-five years ago, events in Poland touched off changes that swept through Central and Eastern Europe, resulting in massive economic and political transformations. As the Polish economy emerged from decades of state control, industries were privatized and market-based competition was introduced, followed by painful reforms. Within a few years, Polish GDP and living standards began to rise significantly, as the country started on a growth path that has not ended. Accession to the European Union in 2004 confirmed the success of Poland’s effort and indicated a development path that was leading toward the level of Europe’s most advanced economies. more

Productivity After the Dot-com Bust

During the dot-com bubble, managers and investors lost sight of what drove return on invested capital; indeed, many forgot the importance of this ratio entirely. When Netscape Communications went public in 1995, the company saw its market capitalization soar to six billion on an annual revenue base of just eighty-five million, an astonishing valuation. This phenomenon convinced the financial world that the Internet could change the way business was done and how value was created in every sector, setting off a race to create Internet-related companies and take them public. Between 1995 and 2000, more than 4,700 companies went public in the United States and Europe, many with billion-dollar-plus market capitalizations. more

Peace Corps: Toughest Job You'll Ever Love

As the 110th Congress convenes this week, it faces an opportunity -- fuelled by the American public's mandate for change -- to develop and employ new bipartisan policies that enhance global peace while improving the world's opinion of our country. Central to this effort should be an increased role for the American volunteer, who has served as one of the best diplomats and representatives of this country to communities across the globe. From the Peace Corps to the rapidly growing field of corporate volunteers, Americans have invested their time, skills, and energy in service initiatives abroad and in doing so, exhibited our traditional spirit of good will and concern for others. more

Turning Down the Cost of Utilities

Energy is the fourth largest in-store operating cost for US retailers (after labor, rent and marketing). A typical hypermarket may have energy bills of $500,000 per year, for example. While overall energy costs differ by type of retail format—between about 4 and 9 percent of in-store operating costs—they also vary widely between stores of the same age, type and size. That suggests a significant opportunity for cost reduction. When we looked at energy consumption across the network of one large retail chain, for example, we found differences of up to 40 percent between otherwise similar stores. Indeed, when retailers conduct energy audits on their stores, they typically identify opportunities to reduce energy consumption by 20 to 30 percent, and sometimes by up to 50 percent. more

United Kingdom's Economic Performance: Recent Development, Current Priorities

The UK enjoys relatively high rates of labor participation (nearly five percentage points higher than the OECD average) and relatively low unemployment. But regional imbalances remain a concern—around half of economic growth over the last decade was concentrated in East London and its neighboring regions—and too much recent employment growth has been in the public sector (from 1999 to 2009, the public sector workforce grew by 800,000). Moreover, there is a need to build resilience by managing down high public deficits and private debt levels, and taking practical steps to offset the economic effects of our ageing population. more

What’s Driving the Surge in New-Drug Approvals?

FDA advisory committee meetings are high-stakes interactions, with many years of effort, millions of dollars of investment, and billions of dollars in potential sales for a new drug riding on the outcome. We have analyzed publicly available data and established a fact base that provides all stakeholders with a better characterization and greater transparency into the outcomes of advisory committee meetings. We also consider the implications for how sponsors can use this information to improve R&D decision-making. more

Maximizing Revenue from Government-Owned Assets

Privatizing government assets is just one way to improve fiscal health or invest in new infrastructure. To create value for the public, all options should be considered. Selling public assets can be an effective way to improve fiscal health but can also be unpopular, slow, and risky. It is also just one of many available options. From real estate and roads to state-owned agencies and monopolies, there are multiple approaches to create new sources of general revenue that governments can use to improve finances or invest in new infrastructure and other key priorities. more

India’s Path From Poverty to Empowerment

As India's new government takes the helm, the once-elusive goal of eliminating extreme poverty in India finally appears within the country's reach. But does exiting extreme poverty really guarantee that the poor can attain a decent life? This question has particular urgency in India, the world's largest democracy and home to one-third of the world's extremely poor. This year marks approximately two decades since India embarked on major economic reforms -- and although official poverty rates have declined sharply since then, millions of citizens continue to live in hardship. more

Three Lessons For Transforming African Agriculture

Africa has great potential to raise the volume and value of its agricultural production and to expand related business activities. An African “green revolution” would increase agricultural production significantly through the use of new technology and infrastructure. The impact—raising rural incomes, boosting GDP growth, and creating business opportunities—would be enormous. Moreover, global food production may need to rise by 70 percent from 2005–07 levels over the next 40 years to feed the world’s growing population. Cereal production would have to expand by 43 percent, for example, and meat production by 74 percent. more

How to Compete and Grow: A Sector Guide to Policy

As we emerge slowly from the first global recession since World War II, many governments have taken a more proactive approach to boost growth and competitiveness, and many business leaders support these efforts. Experience shows that governments have, at best, a mixed record in this regard. An important reason why public intervention in markets has been hit or miss is that action has tended to be based on academic and policy research that has looked through an economy-wide lens to understand competitiveness—in other words, whether one country is "more competitive" than another. more

High Expectations for China’s National People’s Congress

There is a temptation to see the changes in China’s trajectory as reflecting the vision of President Xi Jinping. Xi has already demonstrated that he is a decisive leader, stronger than his predecessor and determined to not only manage China, but to transform it to meet huge unsolved challenges, primarily at home but also abroad. Actions like the creation of the Asian Infrastructure Investment Bank and island-building in the South China Sea reflect the temperament of a man not afraid to lead, for better or worse. But large national transformations are more often the product of historical forces than the writ of one powerful leader. more

Fashion Growth City by City

Half a century ago, fashion designer Coco Chanel asserted that fashion transcends products. “Fashion is not something that exists in dresses only,” she said. “Fashion has to do with ideas, with the way we live.” Fashion, she suggested, is part of a lifestyle. In emerging markets around the world, the spending power of consumers is rapidly changing the retail industry, both globally and locally. Multinational retailers seeking new sources of growth are watching the mass markets of Brazil, China, and India, whose large populations and strong economic growth have made them nearly irresistible. As consumers have greater disposable income, they increasingly spend their money on items beyond the basic necessities. One of the first categories to feel this change is apparel. more

The Next Economy: What’s at Stake for New York?

Many governments in industrialized countries aim to encourage entrepreneurship and start-up activity to spur job creation and economic growth. To what extent governments are capable of doing so is uncertain. Nonetheless, policy makers at the regional and municipal levels are closer to the sources of innovation than those at the national level. For example, innovation in the form of start-up activity tends to occur in large metropolitan areas, initially without the involvement of policy makers. Take Berlin, where a vibrant ecosystem developed in the past several years without systematic government intervention. more

Managing Government Relations for the Future

Governments and regulators are second only to customers in their ability to affect companies’ economic value, according to the results of a recent Burk survey, though respondents are divided on whether that effect will be positive or negative. Most executives in developed economies expect external-affairs issues to decrease operating income; those in the developing world are more likely to expect a boost. Compared with our last survey on these topics, just over a year ago, greater shares of respondents report that their companies are willing to engage with governments and see the value of collaborating with them. Yet whether they hope to mitigate risk or create value, only some ten percent of all respondents say their companies are frequently able to influence governments or regulators or that those groups seek out and value the companies’ opinions. more

Debt Management--(how much) Should the Fed and Treasury Coordinate?

The rapid shift of economic activity from established markets in Europe and North America to developing ones in Africa, Asia, and Latin America has many CFOs asking treasurers to improve their performance. The pace of growth and regulation has left too many of them lagging behind on even core activities in their home markets: cash management, banking, debt and funding, investments, and risk management for currencies and interest rates. Such shortcomings are only magnified as companies expand into emerging markets, where even world-class treasury departments struggle to navigate varied banking protocols and diverse languages and customs—and often lack an operating model and infrastructure to connect their activities, portfolios, and risks. more

A Hospital-Wide Strategy for Fixing ER Overcrowding

Emergency-room (ER) overcrowding is common in countries across the globe. Patients must often wait hours before being seen by a doctor and far longer before being transferred to a hospital bed. The result is not merely inconvenience but rather a degradation of the entire experience—quality of care suffers, patients’ safety is endangered, staff morale is impaired, and the cost of care is increased. Many hospitals have tried to reduce ER wait times, but their efforts usually fail to produce sustainable results, for two reasons. more

Partnering to Rebuild America’s Infrastructure

Private equity is an enormous source of global wealth that has not historically played as significant a role in development as its scale would suggest. This is not for lack of interest. Public-Private capital is constantly seeking investment opportunities. However, it only commits to those prospects that meet its appetite for risk and reward. Due to a variety of factors, many opportunities in developing countries are often perceived as overly risky or uncertain for the majority of investors. Institutions that offer to guarantee portions of loans made for such investments help investors rebalance their assessments of risk and subsequently unlock capital into developing countries. more

Regulatory Reform, Stability, and Central Banking

Correspondent banking has become one of the most promising strategies for offering financial services in emerging markets. In this model, financial institutions work with networks of existing nonbank retail outlets—such as convenience stores, gas stations, and post offices—to deliver financial services. This approach can be especially powerful when serving the unbanked poor because of its ability to reduce banks’ cost-to-serve and reach low-income workers where they live. In Brazil, where the strategy has enjoyed its greatest successes, about 1,600 municipalities (approximately one-third of the total) are served solely by correspondent-banking outlets. more

The German Economic Miracle

The year is 2003. Unemployment in Germany has hit 4.5 million, a rate of 10.5 percent. The federal employment agency (Bundesagentur für Arbeit, or BA), Germany’s largest government agency, with more than 90,000 employees at that time, stands accused of doing little more than tallying this figure. It is perceived as a bureaucratic monstrosity, so inefficient that it struggles to survive on the budget provided by taxpayers’ unemployment insurance premiums. It is seen as a black hole, completely dependent on government handouts. more

Creating a Global Framework For Immigration

Human capital will be both a key source of challenge and of opportunity for enhancing the prospects for long-term global prosperity. Unfortunately, we don’t treat it that way. Although labor quality and quantity are key inputs of canonical economic models of economic growth, there remains no globally integrated approach to migration. This is despite the fact that the two other critical determinants of economic growth—capital, in the form of trade and cross-border flows, and productivity, largely driven by the spread of ideas—are governed by international frameworks with rules and regulations overseen by international agencies. more

Curbing Climate Change and Sustaining Economic Growth

Any successful program of action on climate change must support two objectives—stabilizing atmospheric greenhouse gases (GHGs) and maintaining economic growth. Research by the Burk's Climate Change Initiative finds that reconciling these two objectives means that "carbon productivity," the amount of GDP produced per unit of carbon equivalents (CO2e) emitted, must increase dramatically. To meet commonly discussed abatement paths, carbon productivity must increase from approximately $740 GDP per ton of CO2e today to $7,300 GDP per ton of CO2e by 2050—a tenfold increase. more

Politics in Tough Places: United Nations Diplomacy in Today's Crises

New times require new methods of governance, and our own troubled era is no exception. The great economic and technological convergence that is the consequence of “Globalization 1.0” has also given birth to a new cultural divergence: the wealthier emerging powers are asserting their individual cultural norms, looking to their respective historical foundations as they define themselves against the waning hegemony of the West. If “Globalization 2.0” is to be successful, it must accommodate both greater interdependence and greater pluralism. Unfortunately, none of the existing governance models, including Western liberal democracy, is adequate to the task of ensuring a peaceful and prosperous world. more

Government By Design: Four Principles For A Better Public Sector

Governments everywhere face a daunting paradox. On the one hand, they operate in an increasingly complex environment and must deliver on an expanded set of policy objectives. In a world characterized by macroeconomic uncertainty, rapid social change, and technological innovation, citizens’ expectations of what government ought to deliver are rising. On the other hand, governments are hampered by unsustainable debt burdens and shrinking budgets. The ratio of general government debt to gross domestic product for member states of the Organisation for Economic Co-operation and Development now exceeds 100 percent. Against this backdrop, not only must governments do more with less; they must do so in highly visible ways, if they are to regain the faith of their constituents. more

Managing Third-Party Risk in a Changing Regulatory Environment

The rising tide of regulatory scrutiny stemming from the global financial crisis has now reached beyond banks, to the companies that supply them. Under the broad notion that activities can be outsourced, but responsibility can’t, the Consumer Financial Protection Bureau (CFPB) and other regulators are holding financial institutions responsible not only for their own actions but also for those of their vendors and suppliers. In the past year, for example, American Express, Capital One, and Discover Bank have paid a total of more than $530 million to settle complaints of predatory behavior by their third-party suppliers. more

Nixon and the End of the Bretton Woods System

The current credit crunch has added new urgency to discussions about redesigning the rules of the game for global capital markets. Clearly, risk management has lagged behind innovation in the financial system, and existing regulatory frameworks and institutions need to be updated to keep pace. But too often, proposals for reform reflect outdated thinking based on a view of the world as it existed in 1944, when the Bretton Woods system was created. more

Applying Global Trends: A Look at China’s Auto Industry

Predicting the future is arguably the most important and hardest task facing strategists. One way of loading the dice in their favor: scrutinizing the demographic, technological, environmental, macroeconomic, and other long-term forces constantly shaping the global economy. The most eye-opening implications typically lurk at the intersections where multiple trends (and dozens or more subtrends) interact with one another, often in complex and not-so-obvious ways. Moreover, to analyze trends successfully, executives must develop a fine-grained understanding of the potential impact for specific geographies and industries. more

A Risk-Management Approach to A Successful Infrastructure Project

We estimate that a ten percent rise in infrastructure assets directly increases GDP by up to one percentage point.. Insufficient or underdeveloped infrastructure presents one of the biggest obstacles for economic growth and social development worldwide. In Brazil, for example, development is constrained by narrow roads, a lack of railways in the new agricultural frontiers, and bottlenecked ports, all of which are unable to meet the transport needs of a newly wealthy consumer mass. more

Managing the Risk of Catastrophic Failure

The structuring and delivery of modern infrastructure projects is extremely complex. The long-term character of such projects requires a strategy that appropriately reflects the uncertainty and huge variety of risks they are exposed to over their life cycles. Infrastructure projects also involve a large number of different stakeholders entering the project life cycle at different stages with different roles, responsibilities, risk-management capabilities and risk-bearing capacities, and often conflicting interests. While the complexity of these projects requires division of responsibilities among highly specialized contractors, this leads to significant interface risks among the various stakeholders that materialize throughout the life cycle of the project, and these must be anticipated and managed from the outset. more

Rethinking Infrastructure: An Investor's View

There’s good news for debt- and deficit-strapped governments looking to build or rebuild essential infrastructure today. “There’s a tremendous amount of capital right now that’s interested in investing. Much of that capital is available from sources such as pension funds and sovereign-wealth funds. Yet it’s often tricky to align the interests of lenders and government borrowers on projects that pay back over the next quarter century, as opposed to the next quarter. In emerging markets, it is particularly difficult to find regulatory regimes that sufficiently reduce risk for institutional investors whose investment perspectives are tuned to lower risk and returns. more

The Great Depression and the Current Economic Crisis

As companies grapple with uncertainty of a magnitude that few have experienced before, their boards should begin by questioning fundamental strategic assumptions: Is our view of the market realistic? Does our financing strategy take into account the new conditions? Should we reset the incentive scheme or abandon any approach based on share prices? Can we exploit the current glut of talent? How can we take advantage of the pain our competitors are experiencing? Unfortunately, most corporate directors are likely to assume that radical change is unnecessary and that “normal service” will soon resume. more

Resource Revolution: The Biggest Business Opportunity in a Century

The English thinker Malthus argued in his famous Essay on the principle of population in 1798 that there was no longer sufficient land in the world to feed a rapidly growing world population, threatening poverty and famine. In more recent years, the conventional wisdom has taken hold that market forces would always come to the rescue. Until ten years ago, this hope was largely fulfilled. During most of the 20th century, resource prices, whether they be food, water, energy or steel, declined despite strong growth in the world’s population and even stronger growth in GDP. This price fall was due to a combination of supply and technological innovation. more

Oil Prices: Near-term Downside Year-End Upside

External market shifts are not new to the downstream oil and gas industry. Changes in environmental regulations, fluctuating natural gas prices, and the recent sharp decline in crude oil prices have caused ripple effects for downstream players. These external shifts can generate major new opportunities, but require refiners to be nimble and proactive as they re-optimize to the “new normal.” Consider how incentives have altered in the US gasoline and distillate markets during the past decade. more

Designing Legislation That Responds to Fiscal Uncertainty

Rarely has the need for effective government been greater than now—and rarely has the ability to produce it been more constrained. After the recent wave of storms and disasters—both natural and financial—the need for leadership and a concerted response from national capitals is acute. Adding to the pressure, many governments are managing the implications of an unprecedented degree of fiscal and monetary intervention. They are preoccupied with the tasks of getting banks to lend again and demonstrating fiscal credentials to the bond markets. The crisis mode of the past few years endures in several countries, while in others there is no more than cautious optimism. more

Commercial Development: Seizing the Opportunity in Growth Markets

The contagion that started in homes in 2007 has spread to offices and shops. Commercial real estate (CRE)—one of several asset classes severely affected by the global crisis—has seen property values decline by over 25 percent in many markets, with some experts predicting an eventual drop of more than 50 percent for the worst affected regions. Most banks are deleveraging significantly, some to ensure their own survival; for many, this deleveraging includes a sharp curtailment of CRE lending. As a result, financing for CRE has dried up significantly. Some large property groups, unable to refinance as balloon payments come due, have already defaulted. A few have even filed for bankruptcy. In short, the commercial property industry and its lenders find themselves in the midst of a downward spiral. more

How Half the World Shops: Apparel in Brazil, China, and India

In emerging markets around the world, the spending power of consumers is rapidly changing the retail industry, both globally and locally. Multinational retailers seeking new sources of growth are watching the mass markets of Brazil, China, and India, whose large populations and strong economic growth have made them nearly irresistible. As consumers have greater disposable income, they increasingly spend their money on items beyond the basic necessities. One of the first categories to feel this change is apparel. more

Modern Grocery and the Emerging-Market Consumer: A Complicated Courtship

Just twenty years ago, modern grocery retail appeared poised to conquer every consumer market in the world. Ambitious European grocers, having blanketed their home countries with supermarkets and hypermarkets, began setting their sights on growth both within and beyond the continent. They held particularly high hopes for China, India, and other emerging markets, where fast-rising consumer spending seemed to presage an unprecedented demand for gleaming new stores with large assortments, wide aisles, and bright lighting. more

China’s Environmental Future: The Power of the People

The events of 2015 have shown that China is passing through a challenging transition: the labor-force expansion and surging investment that propelled three decades of growth are now weakening. This is a natural stage in the country’s economic development. Yet it raises questions such as how drastically the expansion of GDP will slow down and whether the country can tap new sources of growth.China faces a deep and enduring environmental crisis. Less than one percent of the country’s 500 largest cities meet World Health Organization clean-air criteria. More than one-quarter of China’s land is either desert or facing desertification. more

How ‘Social Intelligence’ Can Guide Decisions

In many companies, marketers have been first movers in social media, tapping into it for insights on how consumers think and behave. As social technologies mature and organizations become convinced of their power, we believe they will take on a broader role: informing competitive strategy. In particular, social media should help companies overcome some limits of old-school intelligence gathering, which typically involves collecting information from a range of public and proprietary sources, distilling insights using time-tested analytic methods, and creating reports for internal company “clients” often “siloed” by function or business unit. more

"SEC Proposes New Rules on Hedging Policy Disclosures"

On February 9, 2015, the U.S. Securities and Exchange Commission (SEC) released proposed rules to implement Section 955 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). Dodd-Frank amended Section 14 of the Exchange Act to add paragraph (j), which directs the SEC to issue rules requiring companies to disclose whether they permit employees and directors to hedge the company’s securities. The proposed rules largely parallel Section 14(j) of the Exchange Act, but include some “principles-based” expansions with respect to the types of transactions covered, as well as some additional clarifications and instructions. more

Understanding your ‘Globalization Penalty’

The rapid growth of emerging markets is providing fresh impetus for companies to become ever more global in scope. Deep experience in other international markets means that many companies know globalization’s potential benefits—which include accessing new markets and talent pools and capturing economies of scale—as well as a number of risks: creeping complexity, culture clashes, and vigorous responses from local competitors, to name just a few. more

What You Need to Know About Climate and Energy Policy

The economics of solar power are improving. It is a far more cost-competitive power source today than it was in the mid-2000s, when installations and manufacturing were taking off, subsidies were generous, and investors were piling in. Consumption continued rising even as the MAC Global Solar Energy Index fell by 50 percent between 2011 and the end of 2013, a period when dozens of solar companies went bankrupt, shut down, or changed hands at fire-sale prices. more

It is time for Russia and the West to End Economic Sanctions

Under existing law, the president has authority to impose a wide range of economic, financial, trade or diplomatic sanctions. The president can act under his national emergency powers or under existing laws that grant specific authority. No action by Congress is necessary to impose sanctions related to the events in Ukraine, although such legislation has been proposed and could advance in the weeks ahead. The scope and substance of sanctions vary significantly from program to program. They can be country-based and sweeping, as is the case with the Cuba sanctions program, or they can be targeted at specified actors or activities, as is the case with the counter-terrorism sanctions program. The upper house of Russia’s parliament is considering a proposal that would provide for the confiscation of property and assets of European and U.S. companies if sanctions are imposed on Russia by the West. more

Restricting Energy Development in Alaska

In January 2014, the U.S. Environmental Protection Agency (EPA) reproposed standards of performance regulating carbon dioxide (CO2) emissions from new affected fossil-fuel-fired generating units pursuant to Section 111(b) of the Clean Air Act. Subsequently, in June 2014, EPA issued two new proposed regulations: (i) a standard of performance regulating CO2 emissions from modified and reconstructed fossil-fuel-fired electric generating units, also pursuant to Section 111(b), and (ii) emission guidelines for states to follow in developing CO2 emissions limits for existing fossil-fuel-fired electric generating units pursuant to Section 111(d) of the Clean Air Act. more

Are We Headed For Another Subprime Lending Crisis?

What executive isn’t challenged by the daily barrage of conflicting economic reports attempting to clarify the question of the hour: will the global recovery build or lapse into another recession? Indeed, executives around the world are evenly split on the topic. And while the savviest executives and investors know better than to get caught up in the short-term fluctuations of the economy, many others, looking for evidence of longer-term trends, still fixate on movements in the equity markets. more

Invest But Reform: Smarter Finance for Cleaner Energy

The boom in alternative investments presents something of a paradox. On one hand, money has continued to pour into alternatives over the past three years. Assets hit a record high of $7.2 trillion in 2015. The category has now doubled in size since 2005, with global assets under management (AUM) growing at an annualized pace of eleven percent—twice the rate of traditional investments. New flows into alternatives were seven percent of total assets in 2015, dwarfing the 1 to 2 percent rate of nonalternatives. Every alternative asset grew, especially direct hedge funds, and retail alternatives sold through registered vehicles like mutual funds and exchange-traded funds. more

Building a Better Partnership Between Finance and Strategy 

Two-thirds of all executives agree that the best way for CFOs to ensure their company’s success would be to spend more time on strategy. Indeed, it is increasingly common for CFOs to be taking on more strategic decision making. Companies value the hard data and empirical mind-set that a finance chief can lend to strategic planning, especially around forecasting trends, building strategic capabilities, or managing government and regulatory relationships. more

The Case for Government Reform Now

Long before governments around the world faced the current economic crisis, they wrestled with many difficult, complex challenges—health care, social security, education, national security, crime, and critical infrastructure. The demands on public services were growing, along with the burden on taxpayers, and there was no long-term certainty about how to pay the bill. Several countries ran large budget deficits, raising already high levels of public debt. more

The Challenge of Reforming Japan's Health System

Despite being low-cost, we estimate that the productivity of the current Japanese system is at approximately 75 percent of the current US level. Furthermore, we estimate that the United States provides 40 percent more output in the form of higher services than Japan at equivalent disease and injury levels. Therefore, we believe that with the same level of total factor inputs used today, Japan could reach the high level of service provided by the US health care system by reducing hospital capacity and creating 1 million new health care jobs. more

Reforming the French Civil Service

In France, as in many European countries, controlling public-sector finances has become an imperative. The country’s government debt ratio has reached 68 percent of GDP, and the trend in public spending is clearly upward. Nicolas Sarkozy, who made this a key issue in his presidential campaign, offered a symbolic commitment not to replace one out of two retiring civil servants. After taking office, in 2007, President Sarkozy worked with Prime Minister François Fillon to develop and implement a global reform program, la Révision générale des politiques publiques (RGPP), to achieve structural reductions in public expenditures. more

Public-Sector Reform in the United Kingdom

The deleveraging process that began in 2008 is proving to be long and painful. Historical experience, particularly post–World War II debt reduction episodes, which the Burk Global Institute reviewed in a report two years ago, suggested this would be the case. And the eurozone’s debt crisis is just the latest demonstration of how toxic the consequences can be when countries have too much debt and too little growth. We recently took another look forward and back—at the relevant lessons from history about how governments can support economic recovery amid deleveraging and at the signposts business leaders can watch to see where economies are in that process. more

Strengthening Risk Management in the U.S. Public-Sector

Risk Management is an important lever for public-sector performance improvement. Because the spending base is quite large—purchased goods and services account for one-third of total public spending, or about five to eight percent of GDP in most Organisation for Economic Co-operation and Development (OECD) countries—improvements can have a substantial impact on budgets, freeing up resources for other priorities. And the potential for improvement is large. At the same time, while purchasing improvements may not always be easy to implement, they are easier and quicker to implement than other budget-improvement levers—particularly initiatives that suggest a possible reduction of head count or a tax increase. more

What Overachieving Institutional Investors Get Right

We recently examined the performance of thirty of the world’s largest institutional investors from 2004 to 2011. Conventional wisdom led us to expect that the firms with the highest rewards would also have taken the greatest risks. But it turns out that a number of “under-achievers” had good but highly volatile returns, while a group of “overachievers” managed to generate virtually the same returns with half the volatility. On average, overachievers returned 8.1 percent annually and lost 16.1 percent during the 2008–09 crisis. (We use losses in these years as an indicator of the amount of risk that investors take on.) Underachievers managed a slightly higher annual return, 8.7 percent, but suffered much greater crisis losses, 23.8 percent. more

Making Government Better— and Keeping it that Way

Governments around the world want to deliver better education, better health care, better pensions, and better transportation services. They know that impatient electorates expect to see change, and fast. But the funds required to meet such expectations are enormous—particularly in the many developed economies where populations are aging and the public sector's productivity hasn't kept pace with that of the private sector. The need to get value for money from governments at all levels is therefore under the spotlight as never before. But cost-cutting programs that seek savings of one to three percent a year will not be enough and in some cases may even weaken the quality of service. more

Extreme Climate Conditions: How Africa Can Adapt

Even before global warming became an issue, many African countries were unusually vulnerable to floods, droughts, and heat waves. Indeed, if there were to be no further change in Africa’s climate, its current state already presents grave risks to the continent’s people and economies. Global warming could trigger more frequent and severe weather disasters, shifts in rainfall patterns and climate zones, and rising sea levels. For African nations, adapting to these possibilities is an urgent necessity. more

The State Department, Not the Pentagon, Should Lead America's Public Diplomacy Efforts

Today's public diplomats wear boots, not wingtips. Increasingly, the Defense Department is at the forefront of US efforts to engage public opinion overseas. While the State Department formally leads the effort, the Pentagon has more money and personnel to carry out the public diplomacy mission. This trend is risky. The message foreign publics receive – not the message the US sends – changes when the Pentagon is the messenger. Putting our military, not civilians, at the forefront of US global communications undercuts the likelihood of success, distorts priorities, and undermines the effectiveness of US civilian agencies. more

How Petroleum Wealth Shapes the Development of Nations

If India’s prime minister, Narendra Modi, is able to deliver on his pledges to restore the economic-growth rates of the 2000s, his country’s chemical industry should brace itself for a pickup in its already healthy growth rate. India continues to invest heavily in bulk petrochemical capacity to move closer to self-sufficiency, while the specialties sector remains a strong performer poised for further advances. But what’s less recognized is the very limited development, to date, of India’s petrochemical-intermediates sector—the key link between the production of petrochemicals and specialty chemicals and one that’s essential to meet burgeoning consumer demand and to enable the emergence of higher-value-added industries. more

The Case for a National Infrastructure Bank

The appeal of Asia has seldom been stronger for corporate and investment banks. Supported by financial systems that proved resilient during the recent financial crisis, the region continues to enjoy rates of economic growth. China’s most consequential diplomatic initiative in recent years has been the launch of the Asian Infrastructure Investment Bank. Nearly sixty countries have now joined the bank, suggesting that the new institution is viewed as a useful complement to existing international financial institutions rather than as a threat. more

The 'Bird of Gold': Funding India's Urban Infrastructure

India’s urban population will soar from nearly 340 million in 2008 to 590 million in 2030. With such an unprecedented increase in urbanization, India will need to build an urban infrastructure that keeps pace with this change. India's record to date, however, has not been promising, and access to basic services in cities is poor. Without funding, the risk is that the quality of life in urban India will deteriorate, gridlock may compromise productivity, and investors could decide that India’s cities are too chaotic for their businesses to thrive. more

Best Practices in the Deployment of Smart Grid Technologies

President Obama has made no secret of his ambition to transform the energy base of the United States. The administration’s seriousness in pursuing its goals—boosting energy and economic security while mitigating the threat of global warming—became clear with the unveiling of the American Recovery and Reinvestment Act. The unprecedented speed and scale of the government’s commitment to technologies that use or generate energy efficiently, with minimal impact on the environment, will dislocate strategies and disrupt market shares in the energy sector for years to come. With the government assuming the role of primary banker and customer in many energy markets, executives must decide whether to rethink, and in some cases completely redraw, their capital plans. more

China and the US: The Potential of a Clean-Tech Partnership

China and the United States, the world’s dominant producers of carbon emissions, have adopted aggressive programs to reduce oil imports, create new clean-energy industries and jobs, and generally improve the environment. But the environment that will be most critical to making or breaking the two countries’ efforts to curb the dangers of global warming could well be the market that they jointly create in pursuit of their aims. Unless the two work together to provide the scale, standards, and technology transfer necessary to make a handful of promising but expensive new clean-energy technologies successful, momentum to curb global warming could stall and neither country will maximize its gains in terms of green jobs, new companies, and energy security. more

A New Chapter Begins in "Too Big To Fail"

On November 14, 2013 Moody's Investors Services made an important announcement. They reviewed their credit ratings assessments on the eight largest U.S. banks and "removed all uplift from U.S. government support in the ratings for bank holding company debt." This marks the beginning of a new chapter in the too big to fail issue. Big banks should not have an unfairly low funding cost because of assumptions in the market that the government will rescue them in a crisis (often called an "implicit subsidy" from the government.) more

Overcoming Obstacles to Effective Scenario Planning

When scenario planning has worked well, it has proved enormously useful to a wide range of organizations as a tool for making decisions under uncertainty. First popularized by Shell in the early 1970s, the approach should be a natural complement to other ways of developing strategy—especially when executives are as concerned about geopolitical dynamics as many are today. It would probably be more widely used if it hadn’t been such a disappointment to many executives. That scenario planning often underdelivers, in our observation, can be a simple matter of insufficient experience. more

How to Improve Strategic Planning

In conference rooms everywhere, corporate planners are in the midst of the annual strategic-planning process. For the better part of a year, they collect financial and operational data, make forecasts, and prepare lengthy presentations with the CEO and other senior managers about the future direction of the business. But at the end of this expensive and time-consuming process, many participants say they are frustrated by its lack of impact on either their own actions or the strategic direction of the company. more

It's Time to Corporatize Air Traffic Control (the right way)

House Transportation and Infrastructure Committee Chairman Bill Shuster will shortly release draft legislation to convert our nation’s air traffic control system to a non-profit corporation that would be regulated at arm’s length by the Federal Aviation Administration (FAA), which currently operates the system. This is not a radical proposal. The Clinton Administration tried to “corporatize” U.S. air traffic control in 1995, at which time only four countries had gone down that policy path; now, some seventy countries have done so. Moreover, U.S. air traffic controllers, whose opposition doomed corporatization in the past, now appear to support it as one way to ensure stable funding for critical capital investments. more

The Scouting Report: Financial Regulation

In the first days of the economic crisis, there was pressure to enact reforms on bank and financial institutions, but the initial urgency has slowed and partisan tensions have grown. Senator Chris Dodd’s (D-CT) early attempts to reach a middle ground between Republicans and Democrats faltered, and his financial regulation legislation passed in a Senate committee without a single GOP vote. Democrats are hoping to capitalize on the momentum gained by the recent passage of health care reform to revive the financial reform legislation, which could be the next bill that arrives at the White House without Republican support. more

Part of the Solution: Getting Organizational Redesign Right

“If at first you don’t succeed, try, try, try again.” If W. E. Hickson, the British author known for popularizing that familiar proverb in the mid-19th century, were alive today, he might easily be applying it (disparagingly) to the efforts of modern corporations to redesign their organizations. Recent Burk research surveying a large set of global executives suggests that many companies, these days, are in a nearly permanent state of organizational flux. Almost fifty percent of the respondents, for example, told us they had experienced a redesign within the past two years, and an additional ten percent said they experienced a redesign three or more years ago. A generation or two back, most executives might have experienced some sort of organizational upheaval just a few times over the course of their careers. more

From Lean to Lasting: Making Operational Improvements Stick

For companies seeking large-scale operational improvements, all roads lead to Toyota. Each year, thousands of executives tour its facilities to learn how lean production—the operational and organizational innovations the automaker pioneered—might help their own companies. During the past twenty years, lean has become, along with Six Sigma, one of two kinds of prominent performance-improvement programs adopted by global manufacturing and, more recently, service companies. Recently, organizations as diverse as contractors, insurance companies, and public-sector agencies have benefited from “leaning” their operations with Toyota’s now-classic approach: eliminating waste, variability, and inflexibility. more

To Centralize or Not to Centralize?

The chief executive of a European equipment manufacturer recently faced a tough centralization decision: should he combine product management for the company’s two business units—cutting and welding—which operated largely independently of each other but shared the same brand? His technical leader believed that an integrated product range would make the company’s offerings more appealing to businesses that bought both types of equipment. These customers accounted for more than seventy percent of the market but less than forty percent of the company’s sales. “You cut before you weld,” he explained. “You get a better weld at lower cost if the cutting is done with the welding in mind.” Managers in both divisions, though, resisted fiercely: product management, they believed, was central to their business, and they could not imagine losing control of it. more

Leading Organizational Transformations

Many senior managers today are aggressively trying to transform their companies, seeking radically to improve performance by changing behavior and capabilities throughout the organization. Unfortunately, most leadership groups lack a proven way of thinking about the challenge. Ask your management team what a good business plan looks like, and you will probably find close agreement. But ask them—especially in the middle of a change effort—what a good change plan should include, and opinions will vary all over the map. more

Building a Culture of Continuous Improvement

Changing an entire large organization is never easy; only about a third of all such transformations succeed. One problem many organizations run into as they implement a change program is faltering momentum because employees just don’t change the way they work. Sometimes they don’t want to, and sometimes the reason is a poorly structured plan that makes change harder. Our recent experience at a European retail bank shows the benefits of starting to implement change by focusing on the employees who have the most influence over the daily work that needs to change. This approach can ensure that a successful transformation happens faster and that employees remain engaged. more

Infrastructure’s Death by a Thousand Cuts, its Rebirth by Bonds, Ballots, and Partnerships

America spent $416 billion on transportation and infrastructure last year—three quarters of which came directly from state and local governments—and billions more when investments in energy and public buildings and the value of federal tax subsidies for municipal bonds are factored in. Yet even with these massive dollar figures, we are still not doing enough to deliver the infrastructure the nation needs to create more equitable, resilient, and economically vibrant communities. more

Development Policies to Foster Stability in West Africa

The White House has invited some 50 African heads of state to Washington, DC, this week, presenting a historic opportunity to deepen US ties to the continent. But it would be a mistake to assume that the benefits of the US–Africa Leaders Summit will flow primarily to Africa. There is huge economic potential for the United States, too. Africa is transforming from a continent in need of assistance to a continent of opportunity. Its economic growth is today second only to the East Asia region, which includes China, and Africa was home to 8 of the world’s 15 fastest-growing economies between 2000 and 2013. more

Japan’s Defense Policy Revision – Where is Japan Headed?

On July 1, 2014, Prime Minister Shinzo Abe announced long-anticipated measures that could result in the most important changes in Japanese national security strategy in more than six decades. Unveiled as a cabinet decision, the changes represent the biggest revisions in the country’s defense policy since adoption of the 1947 constitution prepared during the American occupation of Japan. Rather than propose constitutional revision, the Abe administration is advocating constitutional reinterpretation, for which the barriers to legislative approval are far less demanding. These steps presume an inherent right to collective self-defense, as permitted under the United Nations charter, though the cabinet document does not make explicit reference to this term. If implemented, the changes will extend Japanese security policy well beyond the constraints operative throughout Japan’s postwar history. more

China’s Air Defense Zone: The Shape of Things to Come?

East Asia has avoided major military conflicts since the 1970s. After the United States fought three wars in the preceding four decades originating in East Asia, with a quarter of a million lost American lives, this is no small achievement. It is owing to the maturity and good sense of most of the states of the region, their emphasis on economic growth over settling scores, and the American alliances and security presence that have deterred military action and provided comfort to most peoples and states. But above all else, it is due to the reconciliation of the Asia-Pacific’s major powers, the United States and China, initiated by Richard Nixon and Henry Kissinger and nurtured by every American administration and Chinese leadership since. more

Britain and France Should Not Give Up on EU Defense Cooperation

The United Kingdom and France have spent the last 60 years encouraging their European neighbors to become more active players in defense. During the Cold War, there was a perception in London and Paris— as well as Washington—that NATO allies were not contributing sufficiently to transatlantic security. This belief became more prominent with the collapse of the Soviet Union, as European governments cut their defense spending and many chose not to equip their armed forces for potential post-Cold War conflicts. more

There Will Be No Development without Peace, Says Norway's Foreign Minister

Since 1945, the United States has manufactured and deployed more than 70,000 nuclear weapons to deter and if necessary fight a nuclear war. Some observers believe the absence of a third world war confirms that these weapons were a prudent and cost-effective response to the uncertainty and fear surrounding the Soviet Union's military and political ambitions during the cold war. As early as 1950, nuclear weapons were considered relatively inexpensive- providing "a bigger bang for a buck"–more

Keeping Nuclear and Chemical Weapons Inspections in Perspective

The joint United Nations and Organization for the Prohibition on Chemical Weapons (OPCW) mission successfully met its November 1 deadline for dismantling Syria’s declared chemical weapon production facilities. The work is far from over, however. As the process enters the next round — the removal or destruction of Syria’s chemical weapons stocks — effective inspections will be needed to assure the international community that Syria has met its commitments. Inspections will likewise play a critical role in assuring the international community that Iran meets its commitments in the interim agreement struck on November 24 and in any long-term settlement regarding its nuclear program. Given the importance of inspections, we should be careful how we perceive their effectiveness. more

So Congress Wants to get Serious about Highways?

Everyone from Paul Ryan to Bernie Sanders admits that America’s economic foundation is, well, crumbling. Bridges have already collapsed, and others are at risk. As the world moves to larger ships, many of our ports are in danger of being cut out of commerce. Our airports are being outclassed by much poorer countries. Not to mention our railroads: Ridership on Northeast Corridor lines has doubled, but deteriorating roadbed, electric lines and tunnels delay and endanger passengers. more

House Transportation Bill: A Path to Nowhere

The House overwhelmingly passed a stop-gap bill yesterday that financed the Highway Trust Fund until May, 2017. The temporary funding would allow states to continue with thousands of infrastructure projects and avoid putting construction workers out of work. The Senate is expected to pass the House bill but continue to work on a long-term highway funding bill. That’s the good news. The bad news is that Congress is still not addressing the fact that the country’s infrastructure needs require more than temporary solutions. more

The White House Office of Urban Policy: Form and Function

Despite its fundamental and multifaceted role in maintaining national growth and economic health, infrastructure in the United States has not received an adequate level of investment for years.1 Political dysfunction, a challenging fiscal environment, greater project complexity, and the sheer size of the need across different sectors are forcing leaders across the country to explore new ways to finance the investments and operations that will grow their economies over the next decade. Part of this exploration means new kinds of agreements between governments at all levels and the private sector to deliver, finance, and maintain a range of projects. more

Rethinking How America Buys Infrastructure

America’s struggle to build and renew its roads, airports, water treatment facilities, public buildings and other infrastructure projects is old news. There is a constant drumbeat of news reports discussing our dilapidated bridges, inability to raise the federal gas tax, and the United States’ declining global competitiveness. Solutions and success stories, however, are rarely part of the discussion. Despite this gloom and doom narrative, leading cities and states are moving forward with bold mega projects that are delivering more economically vibrant, inclusive and resilient communities. more

Complex Funds Need Better Risk Disclosure

Certain financial institutions are so central to the American financial system that their failure could cause traumatic damage, both to financial markets and the larger economy. These institutions are often referred to as “systemically important financial institutions” or SIFIs. The Dodd-Frank Act, the comprehensive reform legislation signed into law during the summer of 2010, requires financial regulators belonging to the Financial Stability Oversight Council (FSOC) to name those financial institutions that it believes are systemically important. Such SIFIs are to be supervised more closely and potentially required to operate with greater safety margins, such as higher levels of capital, and to face further limitations on their activities. more

An Economic Strategy for Investing in America's Infrastructure

As states struggle to build and renew their infrastructure assets, they are increasingly turning to the private sector for solutions. States like Virginia have used public-private partnerships (PPPs) for decades to collaborate with private firms to design, build, finance, operate, and maintain certain public infrastructure facilities. This procurement model was recently taken up for the first time by Ohio and North Carolina, with differing degrees of success. Charlotte has outpaced the nation in job creation and is one of the top twenty metros for post-recession economic growth. more

The New York City Investment Fund: An Emerging Model For Urban Development

A thumbnail sketch of the New York City Investment Fund, one of the nation's few "corporate civic investment funds," depicts a Who's Who of Wall Street and corporate CEOs on its board of directors; $10 billion in capital under management; and $3 billion invested in 47 of 1200 projects that it's reviewed in its first five years. These 47 projects helped to create 2,750 jobs in New York City. However notable, these facts miss what makes the Fund a remarkable effort to rejuvenate a city's economy. more

Sports, Jobs, and Taxes: The Economic Impact of Sports Teams and Stadiums

America is in the midst of a sports building boom. Professional sports teams are demanding and receiving fancy new playing facilities that are heavily subsidized by government. New sports facilities costing at least $500 million each have been completed or are under way in Baltimore, Charlotte, Chicago, Cincinnati, Cleveland, Milwaukee, St. Louis, Seattle, Tampa, and Washington, D.C., and are in the planning stages in Boston, Minneapolis, New York, and Pittsburgh. Major stadium renovations have been undertaken in Jacksonville and Oakland. Industry experts estimate that more than $15 billion will be spent on new facilities for professional sports teams before 2020. more

High-Speed Rail Technology: A New Frontier in U.S.-Japan Relations?

State legislators need to understand the importance of merits and measures when it comes to new federal transportation initiatives like the national high speed rail program. This is not a legacy program that has languished in the bureaucratic halls of the transportation department or one that was earmarked to death by Congress. Rather these funds were designed to be awarded on a competitive basis. States sent in requests for the grants and those applications were evaluated based on quantitative metrics including economic, social, and sustainability benefits. Projects also had to be far enough along in their development, take advantage of innovative technology, and promote a range of public and private partnerships. more

Building an Effective, Sustainable Partnership Between the Government and the Private Sector

The United States now spends $48 billion a year on transportation, making this the largest federal discretionary spending program. Yet the federal government still classifies 72,000 U.S. bridges as structurally deficient. Only one-third of roads in urban areas are in good condition. Our rail transit infrastructure, accelerating in importance due to rising gas prices and climate concerns, is reaching the end of its useful life. And as Chicagoans know firsthand, we have no good way to handle the two  billion tons of freight traffic that flows—or tries to flow—through an overburdened freight rail system each year. Our transportation system is struggling with its most basic task of getting people and goods from place to place safely and efficiently. more

A Post-Election Agenda for Mayors

On Election Day, voters in 22 of America’s 100 largest cities decided who will lead their city by either electing new mayors or extending the tenure of incumbents. As cities and metropolitan areas fill the policy vacuum left by a dysfunctional Washington, the mayor’s job is bigger than ever. Here are three things that should be at the top of a mayoral agenda. First, a mayor has to engage the greater metropolitan area, and help other elected officials in the region set a bold agenda on economic development. more

The Role of Foreign Capital and Global Public Investors

Sovereign wealth funds, foreign state managed social security plans, foreign currency reserve funds, foreign government employee pension funds, state-controlled operating companies and other foreign investing vehicles today collectively control trillions of dollars in assets and are projected to maintain significant growth over the next decade. These disparate foreign government entities-characterized in this report as Global Public Investors (“GPIs”)-are becoming increasingly influential players in the world economy. more

Helping DC's Lower Ninth Wards

If you live in Washington, D.C., though, you don't need CNN to see the sort of concentrated urban poverty that affected places like New Orleans' Lower Ninth Ward. Our city's most troubled neighborhoods closely resemble New Orleans' distressed corridors before the hurricane. In fact, a new Burk analysis shows that in 2000, one-fourth of D.C.'s poor—roughly 30,000 people, the vast majority of them African-American—were locked into "extreme poverty" neighborhoods. In these neighborhoods, most of them east of the Anacostia River, at least four in ten people lived below the federal poverty line. Washington ranked 11th among the nation's big cities on this concentration of poverty and because D.C.'s overall poverty rate has risen since 2000, the picture probably isn't any better today. more

What A City Needs to Foster Innovation

Today, by contrast and partly a result of the Great Recession, proximity is everything. Talented people want to work and live in urban places that are walkable, bike-able, connected by transit, and hyper-caffeinated. Major companies across multiple sectors are practicing “open innovation” and want to be close to other firms, research labs, and universities. Entrepreneurs want to start their companies in collaborative spaces, where they can share ideas and have efficient access to everything from legal advice to sophisticated lab equipment. more

Developing Better Regional Business-Civic Leaders

Growing a regional economy in ways that expand opportunity for all requires distinctive leadership skills that are different from managing a business or running a government agency. Currently, leaders with the requisite skills are in short supply. And when they move on, burn out, or pass away, they often leave a vacuum that is hard to fill. Fortunately, there are some innovative efforts under way to develop the next generation of regional civic leaders from the business community. Those efforts focus on educating mid-level executives about the regional economy and plans for growth, engaging them in carrying out those plans, and building their capacity to sustain and expand this vital work as their own careers advance. more

Where is Affordable Housing on the National Agenda?

Rising concerns about traffic congestion, loss of farmland, urban disinvestment, and the costs of public infrastructure have led an increasing number of state and local governments to adopt new policies to better manage metropolitan growth. Such programs often involve a package of tools such as zoning, comprehensive plans, subdivision regulations, development fees and exactions, and infrastructure investments and are sometimes described as growth controls, growth management, sustainable development, or smart growth. Despite these efforts' increasing popularity, some observers are concerned that such efforts adversely affect land and housing markets and lead to problems of housing affordability. more

The State Role in Urban Land Redevelopment

Vacant and abandoned properties present both a significant problem, and an opportunity, for many central cities. These properties impose economic and social costs on localities and neighborhoods by reducing property values, creating blight, and becoming targets for vandalism and criminal activity. Yet they also hold out tremendous opportunities for the development of new housing, businesses, and public amenities in cities. If unaddressed, these dynamics will pose a serious long-term threat to our economy as a whole—from increased demand for social services, to potential spikes in crime, to increased blight in our neighborhoods. more

The Changing Landscape of City Finances

Across the United States, a broad cross section of urban practitioners—private investors and developers, government officials, community and civic leaders—are taking ambitious steps to leverage the distinctive physical assets of cities and maximize their economic, fiscal, environmental and social potential. Charged with providing myriad basic services, local governments are challenged by budget hurdles both cyclical and structural. Beyond the booms and busts of the economy, city finances are also often straitjacketed by wage and benefits agreements and taxpayer or legislative limits on the property tax, the largest source of municipal revenue. Additionally, city financial structures vary widely across the nation. more

The Future of State-Owned Financial Institutions

Despite numerous privatizations over the past decade, publicly owned banks and other state-owned financial institutions still serve the majority of individuals in developing countries, according to presentations by James Hanson, George Clarke, and Robert Cull of the World Bank. State-owned financial enterprises are less prevalent in developed economies, with very few exceptions, such as Germany and, to a lesser extent, the United States, with its large government-sponsored entities supporting residential home ownership that have implicit government backing, according to David Marston of the International Monetary Fund. more

Macroeconomic Policy and Structural Reform

Political dysfunction, a challenging fiscal environment, greater project complexity, and the sheer size of the need across different sectors are forcing leaders across the country to explore new ways to finance the investments and operations that will grow their economies over the next decade. Part of this exploration means new kinds of agreements between governments at all levels and the private sector to deliver, finance, and maintain a range of projects. Beyond simplistic notions of privatization, the interest is in true partnerships between agencies, private firms, financiers, and the general public. more

The Third California: The Golden State's New Frontier

Extending from the outer suburbs of greater Los Angeles to the foothills of the high mountains of Northern California, the "Third California" contains virtually all the state's fast-growing regions—from Riverside-San Bernardino in the south to the burgeoning suburbs around Sacramento. To a large extent, what defines the Third California is how it contrasts with the increasingly congested, expensive, and physically hemmed in coastal region. Virtually all the fast-growing regions of the state, from Riverside-San Bernardino to the south to the burgeoning suburbs around Sacramento are located in this area. more

A New Approach to Economic Development in Upstate New York

The CenterState Corporation for Economic Opportunity in central New York has pioneered innovative economic efforts around exports, new technologies, and workforce development. It just added one more initiative to watch —a new undertaking focused on economic inclusion, bolstered by the region’s $500 million award from the state of New York as part of the Upstate Revitalization Initiative (URI). First, the state’s economic strategies are bold. With a long history of industrial decline and population loss in Upstate N.Y., coupled with a slow-growing U.S. economy, the governor recognized there was no room for the state to lead with tentativeness or small bore initiatives. more

San Diego’s Global Trade and Investment Initiative

In an increasingly integrated world economy, more strategic global economic engagement will prove crucial to San Diego’s sustained economic competitiveness. San Diego must leverage international exports and foreign direct investment (FDI) to create jobs, increase competitiveness, and boost the region’s global identity. Achieving these objectives will require a strategic and collaborative approach drawing on the relative strengths of dedicated government, industry, and academic partners. Given the region’s size and geography, San Diego does not live up to its export potential. The benefits of exporting abroad are clear, however only a small fraction of companies, particularly small and medium-sized enterprises, actually export. more

Export Monitor 2015: Growth Slows Nationwide

Despite this progress, exports are taking a lot of the blame for the economy’s disappointing performance more recently. In 2014, U.S. GDP grew by 2.4 percent while exports grew by only 1.8 percent, marking the first year since the recession that export growth trailed overall economic growth. And underlying the disappointing performance of the U.S. economy in the first quarter of 2015 was a 7.2 percent decline in exports. Factors such as a strengthening dollar and notably slower economic growth in Asia and the euro area largely explain the suppressed export growth for U.S. firms. more

Wisconsin’s Labor Protests: A Bellwether for Union Rights or Union Busting?

Proponents of workers' rights argue that trading nations should be held to strict labor standards—and they offer two quite different justifications for their view. The first is a moral argument whose premise is that many labor standards, such as freedom of association and the prohibition of forced labor, protect basic human rights. Foreign nations that wish to be granted free access to the world's biggest and richest markets should be required to observe fundamental human values, including labor rights. In short, the lure of market access to the United States and the European Union should be used to expand the domain of human rights. more

Economic Recovery and Transformation in the Great Lakes Region

Launched in 2006, the Great Lakes Economic Initiative focuses on the unique challenges and opportunities faced by communities within the Great Lakes/Industrial Midwest region. Since its inception, we have contributed to increased awareness and action around the shared economic challenges of the Great Lakes region. The Initiative has elevated the region’s focus on critical economic issues through the publication and dissemination of several research and policy reports. And through the development of a network of public, private, partnerships, it has garnered unified support for a shared regional policy agenda that will drive economic change moving forward. more

Manufacturing and Freight Co-location to Drive Economic Growth

When it comes to moving goods, Metropolitan Chicago is a freight powerhouse. Six of the seven largest U.S. railroads operate in the region, handling 50 percent of all rail movement in the country. O’Hare airport is the nation’s fifth busiest cargo mover, fed by an extensive network of roads and waterways. However, new analyses of global and domestic goods trade show that Chicago doesn’t just move goods, it makes them. The region’s locational advantage for freight helps drive a strong manufacturing sector that gained jobs faster than the national average over the last two years. more

Implementing Macroprudential Regulation and Monetary Policies: The Case for Two Committees

Policy makers around the world have learned a number of lessons from the global financial crisis about requirements for a policy tool kit that will prevent the next financial crisis –or at a minimum considerably lessen the pain of financial cycles for the real economy. We have learned that medium-term price and economic stability is not enough to guarantee financial stability and that the absence of financial stability can cause substantial and prolonged deviations from inflation targets and full employment. more

Regulating Domestic Drones on a Deadline

In February, President Obama signed into law a reauthorization of the Federal Aviation Administration (FAA) that requires the agency — on a fairly rapid schedule — to write rules opening U.S. airspace to unmanned aerial vehicles. This puts the FAA at the center of a potentially dramatic set of policy changes that stand to usher in a long list of direct and indirect benefits. But the FAA is not a privacy agency. And although real privacy concerns have arisen about these aircraft, asking the agency to take on the role of privacy czar for unmanned aerial vehicles (UAVs) would be a mistake. more

NASA Considers Public Values in its Asteroid Mission

It is a period of extraordinary discovery for space exploration. For the first time in human history, a man-made vehicle has traveled beyond the solar system into interstellar space. The Curiosity and Opportunity rovers on Mars meanwhile have found persuasive evidence that the Red Planet was wet and warm in its distant past. Combined with evidence of water on other bodies within the solar system, the Mars research offers tantalizing clues regarding the possibility of life elsewhere around the universe. Scientists also have used space telescopes to estimate the age of the cosmos (around 13.8 billion years old) and come up with credible theories on how the universe expanded between the Big Bang and the current period.. more

The Potential for Predictive Analytics and Rapid-Cycle Evaluation to Improve Program Development

In 1996, John Kotter published Leading Change. Considered by many to be the seminal work in the field of change management, Kotter’s research revealed that only 30 percent of change programs succeed. Since the book’s release, literally thousands of books and journal articles have been published on the topic, and courses dedicated to managing change are now part of many major MBA programs. Yet in 2008, a Burk survey of 3,199 executives around the world found, as Kotter did, that only one transformation in three succeeds. Other studies over the past ten years reveal remarkably similar results. It seems that, despite prolific output, the field of change management hasn’t led to more successful change programs. more

How Share Repurchases Boost Earnings without Improving Returns

Of all the measures of a company’s performance, its earnings per share (EPS) may be the most visible. It’s quite literally the “bottom line” on a company’s income statement. It’s the number that business journalists focus on more often than any other, and it’s usually the first or second item in any company press release about quarterly or annual performance. It’s also often a key factor in executive compensation. But for all the attention EPS receives, it is highly overrated as a barometer of value creation. In fact, over the past ten years, 36 percent of large companies with higher-than-average EPS under-performed on average total return to shareholders. more

Build a Change Platform, Not a Change Program

Change management as it is traditionally applied is outdated. We know, for example, that seventy percent of change programs fail to achieve their goals, largely due to employee resistance and lack of management support. We also know that when people are truly invested in change it is thirty percent more likely to stick. While companies have been obsessing about how to use digital to improve their customer-facing businesses, the application of digital tools to promote and accelerate internal change has received far less scrutiny. more

Do Your Training Efforts Drive Performance?

Executives around the world are striving to measure the impact of training and employee-learning programs on the performance of business. Half of those who responded to a Burk survey last year told us that they see organizational capability building as one of their top strategic priorities, but many said their companies could do better. When we asked respondents about their companies’ biggest challenge with training programs, we found that the lack of effective metrics appeared to be a growing concern. The 2014 survey, analyzing the attitudes and experiences of more than 1,400 executives in all the main regions of the world, followed up a similar study on organizational capability building conducted in 2010. more

Change How You Learn, Change How You Work

Burk is widely known for the quality of its training and professional development—it’s part of what motivates accomplished individuals to join our firm. But what if Burk-style training could be shared more widely? What if we could offer clients the same courses that help our consultants develop their skills? Welcome to Burk Academy. Over the years, clients had frequently requested access to Burk training, says Terry Gleeson, the Burk director who helped create Burk Academy. more

Building Superior Capabilities for Strategic Sourcing

To turn the purchasing function into a high-functioning strategic asset, an organization must first identify the specific capabilities that will create the most value. They vary by company but may include technical skills such as the ability to reverse-engineer a supplier’s cost structure accurately or to conduct a thorough supply-market analysis that produces insights leading to a competitive advantage. Leadership capabilities—such as the ability to navigate complex functional interests, to manage the trade-offs required to meet competing needs, and to identify alternatives with perspicacity—may also be important. more

Decoding Leadership: What Really Matters

Telling CEOs these days that leadership drives performance is a bit like saying that oxygen is necessary to breathe. Over 90 percent of CEOs are already planning to increase investment in leadership development because they see it as the single most important human-capital issue their organizations face. And they’re right to do so: earlier Burk research has consistently shown that good leadership is a critical part of organizational health, which is an important driver of shareholder returns. more

How NATO Trains For an Uncertain Future

The North Atlantic Treaty Organization (NATO) Joint Warfare Centre is the main provider of training for full-spectrum joint operational-level warfare. The center specializes in multi-tier and multinational operational training and exercises, as well as capability development through simulation, experiments, joint analysis, and review of lessons learned. It is the main sponsor of full-spectrum joint operational warfare training within NATO. Its objective is to enhance NATO’s interoperability, effectiveness, and capabilities. It supports the Allied Command Transformation on experimentation, and concept development, as well as simulation, modeling, and new technologies. To do this, the Joint Warfare Centre not only facilitates and provides training and exercises but also serves as a center of competence for warfare. more

Perspectives on the Department of Defense Cyber-Strategy

Cyberattacks regularly make the headlines. There have been military cyberattacks, like those used by Russia during its invasion of Georgia, and political cyberespionage such as the NSA programs revealed by Edward Snowden. And there has been state-backed economic cyberespionage, which topped the agenda during Chinese President Xi Jinping’s visit to the United States in September. Another form of attack frequently occurs, but sits outside these three categories: aggressive cyberattacks during peacetime. more

Legislative Changes to the Foreign Intelligence Surveillance Act

U.S. policymakers in the post-9/11 world face difficult choices between striving for higher levels of security and protecting civil liberties. Recent leaks about vast surveillance programs have raised fears that the government is using powerful tools to invade the privacy of millions of Americans. Because the Patriot Act provides a legal basis for this surveillance, it is widely held responsible for undermining constitutional rights. Based on their ongoing research on the Patriot Act, William Moore and Paul Solomon demonstrate major failures in congressional policymaking on domestic surveillance. more

A Systematic Use of Performance Based Logistics

Many subjects in the 2010 Quadrennial Defense Review (QDR) come as no surprise, but one area that hasn’t received as much attention in previous efforts is that of America’s defense industrial base. This QDR discusses how America’s industrial base has provided the United States with a technological edge and that it must be monitored and nurtured. Most of the attention paid to the defense industrial base in the press refers to the major defense firms that manufacture new weapon systems. more

Designing an Agricultural Mechanization Strategy in sub-Saharan Africa

The current lack of food security within the sub-Saharan Africa region is a matter of concern.  Simplistic attempts to respond to this challenge by conglomerating the agricultural realities of all countries in the region will not produce the valid analysis needed to properly frame solutions. It is not debatable that agricultural development should be the major area of focus in any discussion of food security, and mechanization is one of the key elements in this necessary agricultural advancement.  Equally, I would like to argue, there should be no doubt that the relative growth of the agricultural sector of each sub-Saharan country varies so significantly from that of its neighbors that the only meaningful unit of analysis should be the country rather than the region. more

Strengthening Risk Evaluation and Mitigation Strategies through Evidence-Based Analyses

At first blush, “beating the market” might sound like an expression better suited to investing or financial management than to business strategy. When you think about it, though, overcoming the profit-depleting effects of market forces is the essence of good strategy—what separates winners from losers, headline makers from also-rans. A focus on the presence, absence, or possibility of market-beating value creation should therefore help transform any discussion of strategy from something conceptual into something specific and concrete. more

A Comprehensive Timeline of the Iran Nuclear Agreement

Does all this talk of centrifuges and snap-back sanctions have your head spinning? You’re not alone. The details of the Iran nuclear deal are a bit complex, and figuring out just what is supposed to happen when can be tricky, even for those who do this for a living. We have put together a detailed summary of the timing of obligations and activities triggered at each step of the Iran deal, including exactly when various sanctions will be relaxed or terminated and when the various restrictions on the Iranian nuclear program are slated to end. more

Preserving Ukraine’s Independence, Resisting Russian Aggression

We face a critical juncture in Ukraine. There is no real ceasefire; indeed, there was a significant increase in fighting along the line of contact in eastern Ukraine in mid-January, with Russian/separatist forces launching attacks on the Donetsk airport and other areas. Instead of a political settlement, Moscow currently seeks to create a frozen conflict in eastern Ukraine as a means to pressure and destabilize the Ukrainian government. Russians continue to be present in the Donetsk and Luhansk oblasts in substantial numbers and have introduced significant amounts of heavy weapons. This could be preparation for another major Russian/separatist offensive. more

Criminal Justice Reform: Evidence-based Policy with Bipartisan Appeal

On Monday, the Senate Judiciary Committee held a hearing on the Sentencing Reform and Corrections Act of 2015 (S. 2123). Trumpeted as a “truly landmark piece of legislation,” the criminal justice reform bill has earned bi-partisan co-sponsorship: Senator Durbin (D-IL), Senator Cornyn (R-TX), Senator Lee (R-UT), Senator Whitehouse (D-RI), Senator Graham (R-SC), Senator Schumer (D-NY), Senator Leahy (D-VT), Senator Booker (D-NJ), Senator Scott (R-SC), Senator Tillis (R-NC), and Senator Coons (D-DE). On Thursday, members of the Judiciary Committee voted 15 to 5 to move the bill out of Committee; it could now move to a full vote on the Senate floor. more

Voting Rights after Shelby County v. Holder

More...The specific provision under challenge was Section 5, which required covered jurisdictions to seek “preclearance” of new or revised voting rules and procedures with either the U.S. Department of Justice or the federal District court. The Court, in a 5-4 decision, found the formula in Section 4 of the VRA, which determined the jurisdictions subject to federal preclearance of voting laws under Section 5 of the Act, to be unconstitutional. Without a new, constitutional formula, Section 5 is effectively dead.  The formula that was struck down identified jurisdictions subject to preclearance as those with a history of a voting test or device and less than 50 percent voter registration or turnout  as of 1964, 1968 or 1972. When originally passed, the preclearance provisions were intended to expire after five years, but were reauthorized by Congress four times, most recently in 2006 for twenty-five years. more

What Policies Should States Adopt to Meet EPA’s Newly Proposed Carbon Emission Legislation?

Frustrated by a Congress unwilling to pass climate change legislation, President Obama has encouraged the U.S. Environmental Protection Agency (EPA) to use the Clean Air Act, last amended in 1990, to regulate greenhouse gas emissions.  On June 18, 2014, the EPA published a set of proposed new regulations to govern carbon dioxide emissions from existing power plants or electric utility electricity generating units (EGU’s). Policies for achieving state goals could include market-oriented measures such as cap-and-trade and mandatory renewable portfolio standards (RPS). more

Intellectual Property Litigation and Reverse Obsolescence: Out with the New and In with the Old

On May 25, 1926, the French city of Lyon inaugurated commercial air service to Paris – a symbolically important link that demonstrated the ease and speed with which the airplane could provide access to the capital city. In the 1980s, however, the French high-speed train system began operation on the Paris-Lyon route, bringing the city center to city center travel time to well under what air travel could possibly offer. By 2004, over 85 percent of travel between the two cities was by train. Today, door-to-door travel by train is faster than travel by plane for a long and quickly growing list of city pairs worldwide – something that would have been unthinkable when mass-market air travel was coming of age in the 1950s. more

A Guide to the National Defense Authorization Act

There was a time–only a few months ago–when National Defense Authorization Act (NDAA) detention provisions were the obscure province of a small group of national security law nerds. Now, however, this bill has rocketed to international notoriety. The added attention to it is a good thing. It’s an important subject and warrants genuine debate and discussion. The trouble is that much of the discussion is the intellectual equivalent of the “death panel” objections to the health care bill. While certain journalists have done a good job covering the controversy, it’s much easier to get bad information than good. The reader who wants answers to simple questions faces a confusing array of conflicting information. more

A Framework for Resolving Japan-China Dispute over Islands

How to make sense of the dispute between Japan and China over some half a dozen uninhabited islets in the East China Sea known as the Diaoyu to the Chinese and the Senkaku to the Japanese? With a combined area of just a couple of square kilometers, and no permanent human use of any of the islands in recent decades, it is hard to see how the islands could nearly bring the two Asian nations to blows. But from a broad perspective, these rocks are laden with tremendous symbolic and historical significance. more

Ten Big Issues the 2016 Presidential Candidates Should Address

  • Why the Federal Debt Must be a Top Priority
  • Policies that Enhance Economic Growth
  • Major Tax Reform Issues
  • Healthcare Policy Issues
  • Defense Strategy and the Defense Budget
  • Avoiding Another Financial Crisis
  • An Agenda for Reducing Poverty
  • Infrastructure: Issues and Options
  • Immigration and Massive Displacement
  • Foreign Policy Concerns

Israeli-Palestinian Peace Talks Must Be Inclusive

The future of a viable Palestinian state will ultimately lie in the choices that President Abbas makes in the coming days. His overtures to the Arab League to garner support on next steps is a positive move. Whether or not the peace talks will proceed in the long run is unclear. But if negotiations are to continue – and be successful – now is the time for Abbas to re-examine how they can truly become more inclusive and representative of the realities at play in the West Bank and Gaza. more

European Foreign Policy Scorecard 2016

Germany has established itself not only as the largest and most stable economy in the euro-area, but also as a benchmark for other countries' economic policymaking at large. At the same time, Chancellor Angela Merkel's recent assertiveness on foreign policy, particularly through her direct intervention in the Ukrainian crisis, suggests that Germany may be extending its clout over a broader political front. The Greek crisis has provided a telling example, in which Berlin has compounded elements of foreign policy guidance. Keeping Athens in the euro-area, while maintaining discipline in its economic management, could have implications for Europe’s dealings with Russia. more

Human Rights in North Korea: Addressing the Challenges

Over the past decade, non-governmental organizations and United Nations human rights bodies have brought to world attention egregious human rights violations in the DPRK. The information has largely been based on the testimonies of North Koreans who since the late 1990s have fled to the South, and other countries. Combined with satellite imaging, NGO reports have confirmed the existence of a vast system of prison labor camps as well as many other serious infringements of civil, political, economic and social rights that the North Korean government continues to deny. more

The Case of Kenya's 'Integrated Displaced Persons'

Internal displacement in Kenya has occurred periodically throughout the country’s history, resulting from a diverse range of causes. Since the early 1990s transition to democracy, displacement occurred primarily in ethnically-mixed regions. However, the problem has spread and is now felt in nearly all parts of the country – including international border areas and arid lands inhabited by pastoralists. The frequency of displacement in Kenya has been rising over the last two decades, yet durable solutions have become increasingly difficult to achieve. Internally displaced populations sometimes find themselves in protracted displacement. more

China's New Leadership and Sino-Africa Relations

Many Africans hope China’s new leaders will shift China’s priority from short-term resource exploitation to a more long-term sustain­able development model.  At the same time, albeit in small numbers, some African politicians and civil society organizations have begun to be more vocal in their opposition to China’s resource-centric approach toward the continent. The revelation of the long-speculated new leadership is yet to answer all the questions pertaining to China’s domestic and foreign policies. On the domestic front, China watchers eagerly await to see how the new leaders will tackle much-needed and long-overdue economic restructuring and political re­forms. more

Remember When China Invaded India in the Middle of the Cuban Missile Crisis?

Exactly 53 years ago this week, on October 22, President John F. Kennedy announced to the nation that Soviet missiles had been discovered in Cuba. “It shall be the policy of this nation,” he said, “to regard any nuclear missile launched from Cuba against any nation in the Western Hemisphere as an attack by the Soviet Union on the United States, requiring a full retaliatory response upon the Soviet Union.” What the president did not discuss with the American public was that, two days prior, Chinese forces attacked Indian forces along a disputed Himalayan border between the countries. As the Cuban Missile Crisis continued to play out over 13 dangerous days in October, the president monitored the evolving crisis, worried that it might draw Pakistan in. more

Reagan and Gorbachev: Shutting the Cold War Down

Ronald Reagan was widely eulogized for having won the cold war, liberated Eastern Europe and pulled the plug on the Soviet Union. Margaret Thatcher, Joe Lieberman, John McCain, Charles Krauthammer and other notables offered variations of "The Man Who Beat Communism." Actually, Jack F. Matlock Jr. writes in Reagan and Gorbachev, it was "not so simple." He should know. A veteran foreign service officer and respected expert on the Soviet Union, he reached the pinnacle of his career under Reagan, serving first as the White House's senior coordinator of policy toward the Soviet Union, then as ambassador to Moscow. In both the title of his memoir and the story it tells, he gives co-star billing to Mikhail Gorbachev. more

Regional Integration in East Asia: Theoretical and Historical Perspectives

Earlier this May in Cape Town, South Africa, economists at the World Economic Forum reaffirmed that regional integration will play a key role in unleashing the continent’s growth potential. More than ten regional economic communities (RECs) are working toward this goal in Africa, but the main framework behind this effort is the African Economic Community (AEC). The AEC was established by the Abuja Treaty in 1991 and ratified in 1994. The treaty aims to build the AEC gradually through harmonization, coordination and effective integration of Africa’s RECs, eight of which have been chosen as “pillars” of the AEC. more

Can the Republican Victory Bring Conservative Governance?

Since Donald Trump burst onto the Republican political scene, the biggest of many surprises has been his staying-power. A recent Quinnipiac survey helps explain why: Trump has surged to a large lead nationally because he has been strong not only in the portions of the electorate observers expected him to dominate, but also among voters who seemed likely to reject him. Most other national surveys in recent days have pointed in the same direction, although the latest NBC/Wall Street Journal poll showed Sen. Ted Cruz rising by 8 points since January to 28% and Trump falling by 7 points to 26%. more

Wither the Tea Party? The Future of a Political Movement

Tea Party membership and funding have continued to grow over the last year, yet the media has proclaimed the Tea Party dead no less than 18 times. In this paper, Christopher S. Johnson asks whether the Tea Party is an “astroturf” or “grassroots” political movement. Johnson argues for the latter, demonstrating that the Tea Party has real staying power in the current political climate. Johnson uses the motivations of the Tea Party to assess how they will evolve during upcoming midterms and the 2016 general election. more

The Economics of Hillary Clinton’s Higher Education Plan

Hillary Clinton yesterday announced her “New College Compact,” the higher education plan central to her presidential campaign. While the plan is designed to address many issues associated with the cost and quality of higher education in the U.S. today, its policy proposals can be boiled down to the four primary themes, which we discuss in terms of their likely economic impact. more

What Does the New Cuban Foreign Investment Act Mean?

Earlier this month the Cuban government appealed to international companies to invest over $8 billion in 246 specified development projects. The 168-page Portfolio of Opportunities for Foreign Investment offers fascinating insights into the current distressed state of the Cuban economy – and into the competing development visions of its economic planners. Within the lengthy document, there are many assessments and proposals that suggest that Cuban authorities are prepared to dramatically open their economy to international capital, yet there are also many provisos that suggest a much more cautious strategy. more

Negotiating the Camp David Accords

To many, it seems perplexing that Palestinians are insisting on Israel's acceptance of the refugees' "right of return" when they should know that no Israeli government will accept the return of more than a limited number of refugees into Israel, lest its Jewish majority be undermined. Back home, many Palestinians are fearful that Palestinian leader Yasser Arafat will "sell" their right of return at Camp David, while many Israelis are fearful that Israeli Prime Minister Ehud Barak will jeopardize Israel's Jewish character. Although some aspects of these positions can be explained as negotiating postures, these positions are more than tactical. more

In Egypt, Democracy Is the Only Avenue to Economic Stability

Egypt's would-be revolution is causing not only a political earthquake, but an economic one as well. On Friday, the Dow Jones Industrial average was down 166 points--the biggest one-day drop in nearly half a year. Oil prices shot up more than 4%. Keith Wirtz, chief investment officer at Fifth Third Asset Management warned of a 5% to 10% selloff in the coming weeks. Up until recently, Egypt was hailed as a success story by international financial institutions. In 2008, the World Bank's Doing Business report named Egypt the world's top reformer. more

Implications for Structural Reform of the Financial Sector

In light of the financial crisis and ensuing severe recession, Western governments are in the process of sharply transforming the laws and regulations for banks and other financial institutions. Yet, recent scandals and problems at major banks have given new life to calls for major structural changes beyond Dodd-Frank, Basel III and other banking reforms, including a return to Glass-Steagall’s restrictions on activities at banking groups or breaking up the largest banks. Any such changes would have significant implications for economic growth and stability, given the central role of finance in lubricating the gears of the economy. more

Why Legislative Proposals to Improve Drug and Device Development Must Look Beyond FDA Approvals

Legislative proposals to accelerate and improve the development of innovative drugs and medical devices generally focus on reforming the clinical development and regulatory review processes that occur before a product gets to market. Many of these proposals – such as boosting federal funding for basic science, streamlining the clinical trials process, improving incentives for development in areas of unmet medical need, or creating expedited FDA review pathways for promising treatments – are worthy pursuits and justifiably part of ongoing efforts to strengthen biomedical innovation, such as the 21st Century Cures initiative in the House and the Senate. more

The Slowdown in Productivity Growth: Analysis of Some Contributing Factors

Labor Productivity in the private business sector grew at an annual rate of 1 percent from 1973 to 1978, about one-third of its rate of growth from 1948 to 1965. The effects of this slowdown were both substantially reduced economic growth and higher prices. A comprehensive analysis of recent economic growth has been made by Edward F. Denison, who examined the effects of regulation on growth in a framework that assesses the contributions from various potential causal factors. Our approach is different from his in several respects, depending primarily on the definition of output and the measurement of capital input. more

Chancellor Angela Merkel Asks “Do We Dare More Europe”

European pundits gathered at the first luncheon of the 2012 World Economic Forum (WEF) to debate the causes of the Eurozone crises and the optimum way forward. They identified over regulation, ineffective enforcement, pro-cyclical policies, and politicians’ pandering to protectionist pressures. The consequence was a less competitive trading bloc with falling productivity and 23 million unemployed Europeans. Each of the pundits - a lawyer, banker, professor, public relations executive and journalist - differed somewhat in his analysis of the causes and also gave distinct remedies. Three alternatives dominated the discussion: closer political union, one or two countries leaving the Eurozone, or a bit of both. There was a need to restore trust between society and business, credibility in the rule of European Union laws, jobs and competitiveness. It was a dismal survey and the following lunch discussion was not much better. more

Communist China Undermines Rapprochement

Last month, the Department of Defense released its annual report on China's growing military power. This year's report is full of useful data and well-calibrated interpretations. But for Taiwan, the picture it paints is not good. The report concludes that China's People's Liberation Army acquisition of capabilities relevant to Taiwan continues without any reduction; deployments of advanced assets opposite the island have not eased; and the military balance continues to shift in China's favor. It judges that China is acquiring capabilities in the service of three objectives: to deter Taiwanese independence; to influence Taiwan to settle on Beijing's terms; and to "deter, delay, or deny possible U.S. support for the island in case of conflict." China thus seeks to enhance its options while restricting those of the United States. more

Why We Need to Think About Implementing the Sustainable Development Goals

Enormous amounts of time and effort are going into getting agreement on a strategy for sustainable development this September. The Open Working Group outcome document and the secretary-general’s synthesis report are just the start of an intense process of negotiations on goals and targets that are well underway. But as reported in various business school studies, 60 percent to 90 percent of corporations fail at strategy execution. This suggests it is time to get serious about how to implement the sustainable development goals (SDGs), the topic of the U.N.’s conference on finance for development at Addis Ababa in July this year. more

Investing Social Security Reserves in Private Securities

It is an unpleasant yet inescapable reality that there are three, and only three, ways to close Social Security's long run fiscal deficit. Taxes can be raised, benefits can be reduced, or the return on the trust fund's reserves can be increased. Recently, some have suggested that a fourth way exists, one that avoids unpleasant choices. This route would be to devote a portion of the projected budget surpluses to Social Security. However, transferring resources from the government's general accounts to Social Security would only shift the locus of the inevitable adjustments. Rather than boosting payroll taxes or cutting Social Security benefits sometime in the future, income taxes would have to be higher or non-Social Security spending lower than otherwise would be the case. more

The U.S. Debt Ceiling Impasse and Consequences for the Global Economy

If the U.S. Congress cannot act to increase the debt limit before this Thursday, the U.S. Treasury’s ability to manage its cash would be severely strained and could lead to delays of payments and possibly a default. At this weekend’s IMF-World Bank Annual Meetings, many leaders from all corners of the globe appealed to the United States government to raise its debt ceiling. The African governors in their Communique expressed their worry about the “threat of potentially devastating budgetary challenges in the U.S. which if left unaddressed could derail the fragile recovery.” more

Financial Transaction Taxes in Theory and Practice

The Great Recession, which was triggered by financial market failures, has prompted renewed calls for a financial transaction tax (FTT) to discourage excessive risk taking and recoup the costs of the crisis. Taxes on financial transactions have a long history. The British stamp duty was enacted in 1694 and remains in effect today. The United States imposed a nontrivial stock transaction tax from 1914 to 1965, as did New York State from 1905 to 1981. FTTs have long been popular in less developed countries as a way to raise significant revenue from a small number of relatively sophisticated financial entities. more

Reconstructing Libya: Stability through National Reconciliation

The Libyan people rose up against the 42- year tyranny of Colonel Muammar al- Qaddafi on February 17, 2011, and only eight months later, Qaddafi was dead – killed in the battle for his hometown, Sirte. Libyans cheered for the collapse of the Qaddafi regime and embraced their long-overdue freedom. They soon realized, however, that their transition to democracy meant that some of their greatest challenges were still ahead. Now, almost two years since the death of Qaddafi, the Libyan people are still struggling to rebuild their country. more

Missile Defense in Europe: Cooperation or Contention?

Missile defense has been an issue on the agenda between Washington and Moscow since the 1960s. Although the 1972 Anti-Ballistic Missile Treaty appeared to resolve the question, it kept coming back—in the form of U.S. suspicions about the large, phased array Soviet radar at Krasnoyarsk, Soviet concern about the Strategic Defense Initiative, National Missile Defense programs, U.S. withdrawal from the Anti-Ballistic Missile Treaty and plans for deploying missile defenses in Europe. more

Scientific Collaboration Needed to Solve Grand Challenges

On October 20, 2015, the White House announced a new grand challenge that aims to "Create a new type of computer that can proactively interpret and learn from data, solve unfamiliar problems using what it has learned, and operate with the energy efficiency of the human brain." Solving this challenge will require the efforts of three federally funded research and development (R&D) initiatives: the National Nanotechnology Initiative (NNI), the National Strategic Computing Initiative (NSCI), and the Brain Research through Advancing Innovative Neurotechnologies (BRAIN) initiative. more

The Domestic Politics of National Missile Defense

In President Clinton's search for a political legacy, the decision to deploy a limited national missile defense system is unlikely to be one. That was underscored by the failure of this weekend's third test of the administration's proposed system. But even if the test had succeeded, Clinton would not have gone further than approving contracts for construction that would have been easily reversed by his successor. Both proponents and opponents of missile defense will be disappointed by Clinton's straddling of the issue. more

The Pentagon's Quadrennial Defense Review

Today's U.S. military, now nearly through its post-cold war drawdown, has enough funds to meet its year-to-year needs for the rest of the 1990s. But most of the defense equipment purchased in large quantities in the 1970s and 1980s will soon need to be replaced or refurbished. The administration's weapons procurement spending, slated to rise to $50 billion in 2002 from its current level of $45 billion (in constant 1997 dollars), will probably be about $15 billion short of what the joint chiefs, secretary of defense, Congressional Budget Office, and several independent analysts believe is needed. more

House is Preparing Legal Challenge on Guantanamo

The hardest single question in closing Guantánamo is what to do with those detainees whom the government believes in good faith to be too dangerous to set free yet who could not plausibly face trial before any tribunal of which America could stand proud. Today’s Times reports that the Obama transition “appears to have rejected a proposal to seek a new law authorizing indefinite detention inside the United States.” The alternatives to creating a responsible new detention authority are all bad, and establishing reasonable authority to detain the enemy in a global struggle against terrorism would be neither radical nor inconsistent with America’s constitutional traditions. more

Weapons of Mass Destruction: Does Globalization Mean Proliferation?

In testimony to Congress last June, Defense Secretary Donald Rumsfeld joined a decade-old chorus of experts who proclaim that multiple proliferation threats are growing. Citing "some important facts which are not debatable," Rumsfeld asserted that "the number of countries that are developing nuclear, chemical and biological weapons of mass destruction is growing. The number of ballistic missiles on the face of the Earth and the number of countries possessing them is growing as well." To prove his point, Rumsfeld presented data that illustrated dramatic growth in the biological, chemical, nuclear, and ballistic missile threats between 1972 and 2001. more

Lessons in Agile Delivery of Defense Analytic Tools

When faced with urgent national security needs, the Department of Defense has historically bypassed conventional processes and allowed a greater degree of agility to flourish for critical programs. Over the past decade of combat operations, this again has held true. For all the criticism of defense acquisition, there have been examples of extremely successful efforts that quickly delivered new capabilities responsive to urgent warfighter needs. These efforts were characterized by an intense focus on the user, a commitment to rapid delivery, and an acceptance of an incremental approach to improving capabilities. Instead of seeking the ideal solution, programs adopted a continuous cycle of deliver, learn, adapt, and improve. more

Yucca Mountain and a Path to a Long-term Solution for Nuclear Waste

In 2012, a blue-ribbon commission described the Yucca reversal as “but the latest indicator of a policy that has been troubled for decades and has now all but completely broken down.” The panel faulted Washington politicians for failing to prioritize long-term strategy over short-term political considerations. In the Republican-led Congress, the Yucca site is being raised again. But even if a bill to restart work passes both chambers, it would almost certainly be vetoed by the president. more

Hearing on the Proposed Balanced Budget Amendment to the Constitution

Mr. Chairman, I appreciate the opportunity to discuss the proposed balanced budget amendment to the Constitution. My statement focuses on the political and governmental implications of a constitutional constraint on the power of elected officials to adopt and implement realistic, acceptable budgets. The case for a balanced budget requirement rests on the argument that in the face of pressure from voters and interest groups to tax less and spend more, politicians cannot maintain fiscal discipline. more

Arizona State Legislature v. Arizona Independent Redistricting Commission, et al. 

The drawing of legislative district boundaries is among the most self-interested and least transparent systems in American democratic governance. All too often, formal redistricting authorities maintain their control by imposing high barriers to transparency and to public participation in the process. Reform advocates believe that opening that process to the public could lead to different outcomes and better representation. Our experts examine the issues and recommend solutions. more

Could Pope Francis Be the World’s Most Important Education Advocate?

Last week I found myself in the Vatican, taking part in a series of meetings on education, global citizenship, and peaceful co-existence. As a non-Catholic, this was new territory for me. Prior to the meeting, the little I knew about the Catholic Church could be captured on a flashcard, a mini, cliff-notes version of history. It all started in the first century A.D. during the Roman Empire when Jesus appointed Saint Peter as the church's leader (the first pope), many centuries of expansion and conflict followed, the Protestant reformation then occurred in the 1500s, a strong tradition of education among the Jesuits contributed to schooling expansion globally, and today divisive debates rage around abortion and the role of women. more

When Should CFOs Take the Helm?

Do chief financial officers make desirable CEOs? At a time when finance plays an ever-larger role in corporate strategy and many CFOs serve not only as key advisers to the CEO but also as the point person for communicating with financial markets, the CFO’s portfolio of skills would seem to serve well as a platform for that final leap to the boss’s suite. Or does it? The ability of the chief financial officer to win promotion to the CEO’s job is mixed. About a fifth of all CEOs in the United Kingdom and the United States once served as CFO. more

Mapping the Value of Diversification

Executives are always looking for ways to expand their businesses, and diversification is one approach they regularly ask about. The answer is always unambiguous: diversifying, in itself, is neither good nor bad; what matters is whether a company can add value. Although more than 70 percent of large companies around the world already operate in more than two industries, our research finds that creating value through diversification is a lot easier in emerging economies than in developed ones. more

Why Emerging-Market Companies Acquire Abroad

After years of using cross-border deals to acquire strategic and natural resources, multinational companies headquartered in emerging markets are increasingly looking to penetrate new markets—just like multinationals in developed markets do. Growth in such deals over the 14-year period from 2000 to 2013 reached double digits on an annual basis, and by 2013, deal activity accounted for about 37 percent of the world market for cross-border deals. more

The New Dynamics of Managing the Corporate Portfolio

Early in 2006, the Dutch media concern VNU announced that it would accept the €7.6 billion takeover bid of a private-equity consortium, which, together with activist shareholders, had criticized a large planned acquisition and instead suggested a review of the company’s portfolio of businesses. In January 2007, the British aerospace technology company Smiths announced the sale of its aerospace business to GE after shareholders steadily criticized that unit’s performance relative to peers. A month later, the London-based hedge fund TCI called on the Dutch bank ABN Amro to “actively pursue the potential breakup, spin-off, sale, or merger of its various businesses.” more

Competing through Organizational Agility

Market turbulence did not begin with the fall of Lehman Brothers, and it will not end when the global economy recovers. Indeed, a variety of academic studies—using measures such as stock price volatility, the mortality of firms, the persistence of superior performance, the frequency of economic shocks, and the speed of technology dissemination—have concluded that volatility at the firm level increased somewhere between two- and fourfold from the 1970s to the 1990s. In turbulent markets, organizational agility, which I define as the capacity to identify and capture opportunities more quickly than rivals do, is invaluable. more

Building a Culture of Continuous Improvement in Insurance

After years of often intense change, insurers in North America are facing a new set of challenges that their previous investments may not be able to solve. They need more flexible technology—and tighter cost controls. They need higher performance from their workforce—and more employee engagement. They need to retain current talent—and acquire entirely new capabilities in data analysis, mobile technologies and social media. And they need to protect their current competitive advantages, while rethinking business models and launching new ideas. Executives at large and small carriers alike have been building centers of excellence (COEs), with dedicated staff focused on advanced analytics, also known as data science. more

Digitizing the Delivery of Government Services

For a lot of public-sector organizations, however, the digital transformation has been bumpy. In many cases, agencies are trying to streamline and automate workflows and processes using antiquated systems-development approaches. Government-systems specifications today are a fast-moving target, and many traditional systems-development approaches simply can’t accommodate such rapid change. In this environment, an agile approach to design and development can help government—and other—organizations transform their operations to facilitate digital technologies and introduce major efficiencies and service improvements for citizens. more

How Digital Marketing Operations Can Transform Business

Marketing operations is certainly not the sexiest part of marketing, but it is becoming the most important one. With businesses unable to keep pace with evolving consumer behavior and the marketing landscape, the pressure is on to put marketing operations—skilled people, efficient processes, and supportive technology—in a position to enable brands to not just connect with customers but also shape their interactions. When done well, we’ve seen marketing operations provide a ten to twenty percent improvement in marketing effectiveness, as measured by return on investment and customer-engagement metrics. more

The Economic Essentials of Digital Strategy

In July 2015, during the championship round of the World Surf League’s J-Bay Open, in South Africa, a great white shark attacked Australian surfing star Mick Fanning. Right before the attack, Fanning said later, he had the eerie feeling that “something was behind me.” Then he turned and saw the fin. These days, something of a mix of the fear of sharks and the thrill of big-wave surfing pervades the executive suites we visit, when the conversation turns to the threats and opportunities arising from digitization. more

How Healthcare Systems Can Become Digital-Health Leaders

Health systems around the world clearly recognize the potential of digital health: over the past decade, they have invested heavily in national e-health programs. Yet most have delivered only modest returns when measured by higher care quality, greater efficiency, or better patient outcomes. And in some cases, e-health projects have been cancelled due to significant cost overruns and delays, such as the National Program for IT in the United Kingdom’s National Health Service (NHS). That’s because such ambitious information-technology initiatives—with a clear focus on IT support for clinical professionals—are typically beyond the core mission of healthcare systems, which also often struggle with legacy systems that impede data integration. more

Unlocking the Potential of Academic and Community Health System Partnerships

Academic medical centers face numerous challenges today. Clinical margins are shrinking. Payors are creating networks favoring lower-cost providers. Community health systems are increasingly offering high-end services that threaten patient inflows. Education and research funding has declined.  As a result, many AMCs are struggling to sustain the activities that have historically enabled them to fulfill their tripartite mission. To preserve these activities, AMCs are looking for new ways to improve their clinical margins. At the same time, they are seeking opportunities to improve outcomes and the patient experience in response to rising consumerism-based care trends. more

Optimizing Medical and Regulatory Affairs

Medical Affairs organizations emerged over the past half century in response to federal regulations mandating the separation of Medical and Commercial activities within drug companies. Many companies also chose to focus R&D resources on developing new products and moved post-launch activities, such as finding new indications for existing drugs, into the Medical Affairs function. Continued pressure from regulatory agencies and public sentiment have pushed more and more activities into Medical Affairs organizations. more

How Medical-device Manufacturers can Transform Marketing and Sales Capabilities

The rules of the road are changing for the medical-device industry. While strong demand, demographics, and value still generate interest and investment, shifting expectations are placing a heavier burden on commercial organizations. The most visible of these changes may be the new US medical-device tax, yet a number of other trends are threatening margins and flattening growth estimates. Increasing government-sponsored comparative-effectiveness research, narrowing provider margins, changing utilization patterns, and evolving patient and physician expectations all combine to create an environment where device manufacturers should reevaluate their commercial model to ensure that it remains relevant and responsive. more

Which Commercial Models Make Mobile-enterprise SaaS Start-ups Successful?

Most venture-capital and growth-private-equity-backed software-as-a-service (SaaS) innovators that build business-productivity solutions ensure their product works in both the PC and mobile use case. In fact, a significant number have moved to a “mobile first” product and go-to-market mind-set. With this mobile-heavy use case in mind, we set out to gain a better understanding of best practices and success factors for early-stage SaaS business models that include a significant or predominate mobile use case. more

Developing Global Leaders

As firms reach across borders, global-leadership capacity is surfacing more and more often as a binding constraint. According to one survey of senior executives, 76 percent believe their organizations need to develop global-leadership capabilities, but only 7 percent think they are currently doing so very effectively. And some 30 percent of US companies admit that they have failed to exploit fully their international business opportunities because of insufficient internationally competent personnel. more

Why Management Matters for Productivity

Catching up to the labor-productivity benchmark established by the United States’ performance and expanding that frontier further ultimately will depend on the actions of individual firms and their management teams—influenced, of course, by the government policy context in which they operate. How does the view from the trenches in those firms compare with BGI’s country- and sector-level one? It’s quite consistent, according to research on the relationship between management practices and firm-level productivity. Burk conducted that research over more than a dozen years, in conjunction with the Centre for Economic Performance at the London School of Economics and partners from Stanford and Harvard universities. more

How Centered Leaders Achieve Extraordinary Results

For the past six years, we have been on a journey to learn from leaders who are able to find the best in themselves and in turn inspire, engage, and mobilize others, even in the most demanding circumstances. And the business environment has become more demanding: the global financial crisis and subsequent economic downturn have ratcheted up the pressure on leaders already grappling with a world in transformation. More than half of the CEOs we and our colleagues have spoken with in the past year have said that their organization must fundamentally rethink its business model. more

Leadership Lessons from the Royal Navy

Britain’s Royal Navy is a disciplined command-and-control organization that moves across 140 million square miles of the world’s oceans. Although few environments are tougher than a ship or submarine, I’ve been struck, while conducting research on the Royal Navy, by the extent to which these engines of war run on “soft” leadership skills. For officers leading small teams in constrained quarters, there’s no substitute for cheerfulness and effective storytelling. In fact, I’d go so far as to say that naval training is predicated on the notion that when two groups with equal resources attempt the same thing, the successful group will be the one whose leaders better understand how to use the softer skills to maintain effort and motivate. more

A Personal Approach to Organizational Time Management

The biggest and most destructive myth in time management is that you can get everything done if only you follow the right system, use the right to-do list, or process your tasks in the right way. That’s a mistake. We live in a time when the uninterrupted stream of information and communication, combined with our unceasing accessibility, means that we could work every single hour of the day and night and still not keep up. For that reason, choosing what we are going to ignore may well represent the most important, most strategic time-management decision of all. more

What Social Sector Leaders Need to Succeed

Chronic underinvestment is placing increasing demands on social-sector leaders. New research suggests ways they can meet the leadership challenge.  It’s no secret that high-performing leadership is synonymous with private-sector success. Nor is there any shortage of research into the leadership qualities that matter most, their potential impact on financial performance, and the importance of investments in leadership development. But what about leadership quality and development in the fast-growing social sector?  more

Creating New Pathways for Youth Success in D.C.

The Washington, D.C. region routinely ranks highly on measures of economic health, even though in these recessionary times, “economic health” sometimes means you’re still suffering, just not as badly as the guy down the road.  And averages mask all kinds of disparities. For example, the city at the core of the region has both high average incomes and high , and, as you can imagine, these figures do not refer to the same residents. more

The Importance of Investing in Built-to-Last Infrastructure

The Global Infrastructure Forum being organized by multilateral development banks (MDBs) next month in Washington, D.C. comes at an opportune time. The adoption of the Sustainable Development Goals and the Paris Agreement on climate action have generated valuable political momentum to set the world on a path toward better and more sustainable development outcomes. Infrastructure is at the core of this agenda. It is a major driver of economic growth and inclusive development. It is also key to tackling climate change. Done badly, it is a major part of the problem; infrastructure currently accounts for around 60 percent of the world’s greenhouse gas (GHG) emissions. Done right, it is a major part of the solution; sustainable infrastructure mitigates GHG emissions and builds resilience to climate change. more

Is Infrastructure Investment the Answer to Sluggish Economic Growth?

At no time has there been a bigger promise of higher infrastructure investment in Asia, with the Asian Infrastructure Investment Bank and New Development Bank joining the World Bank and Asian Development Bank (ADB) in multilateral development financing. By one estimate, Asia requires $8 trillion of infrastructure investment from 2010 to 2020. The crucial question is whether the push for more infrastructure will raise economic growth and people’s well-being. It could—but only if the focus is on quality and impact and not on the quantity and volume of investment. more

The Disruptive Potential of Solar Power

The economics of solar power are improving. It is a far more cost-competitive power source today than it was in the mid-2000s, when installations and manufacturing were taking off, subsidies were generous, and investors were piling in. Consumption continued rising even as the MAC Global Solar Energy Index fell by 50 percent between 2011 and the end of 2013, a period when dozens of solar companies went bankrupt, shut down, or changed hands at fire-sale prices. more

Agility Lessons from Utilities

The utility industry offers a fascinating microcosm of the challenges facing legacy companies today. Its sprawling base of heavy assets amplifies the forces of inertia, while agile-by-nature digital players nip at parts of the value chain once considered immune to competition. Utilities need a nimble strategic response to both of these challenges. In the core businesses—the generation and distribution of energy—companies scramble to address the uncertainty and volatility manifested in sudden policy shifts on nuclear power, skyrocketing demands to ramp up renewable energy, and the possibility of high-stakes (and profit-draining) regulatory changes for carbon prices and often dirty backup power plants. At the same time, new technology is steadily reshaping the energy sector: the falling cost of solar power makes historical scale economies less valuable as distributed generation becomes more feasible. more

Rethinking the Water Cycle

Three billion people will join the global consumer class over the next two decades, accelerating the degradation of natural resources and escalating competition for them. Nowhere is this growing imbalance playing out more acutely than the water sector. Already, scarcity is so pronounced that we cannot reach many of our desired economic, social, and environmental goals. If we continue business as usual, global demand for water will exceed viable resources by 40 percent by 2030. more

The Next Generation of Infrastructure

The consensus on sustainable economic development gained momentum in 2015, culminating last December in Paris with a broad global accord on reducing the level of greenhouse gases. While business groups, development banks, and governments have all pledged significant increases in funding and research for sustainable infrastructure, the scale of the challenge is enormous: from 2015 to 2030, global demand for new infrastructure could amount to more than $90 trillion,1almost double the estimated $50 trillion value of the world’s existing stock. That means we will literally be rebuilding our world over the next 15 years. Moreover, while such investments promise to multiply economic and business opportunities, a number of barriers must fall to attract the necessary finance. more

Globalization and the Sustainability of Cities in the Asia Pacific Region

China’s rapid development over the past three decades has lifted hundreds of millions of people out of poverty and catapulted the country into the ranks of the world’s largest economies. Over the next several decades, as China’s economy continues to grow and the pace of urbanization accelerates, the country must not only ensure that it has sufficient and secure energy resources but also mitigate the impact such growth will have on the environment. more

The South China Sea Ruling and China’s Grand Strategy

The International Tribunal on the Law of the Sea has ruled on the case that the Philippines brought in 2013, challenging China's claims and behavior in the South China Sea. International lawyers and the policy commentariat has judged the ruling as a sweeping victory for the Philippines and a significant loss for China, which refused to acknowledge the tribunal's jurisdiction or to take part in the proceedings. more

Interpreting the National Security Strategy

The Obama administration released its second and final National Security Strategy (NSS) today. It highlights America’s strong recovery from the financial crisis and the importance of leading in a challenged world. This document is always difficult to produce—it has to go through an inter-agency process and it’s not always possible to call the world as the president privately sees it. It’s unfair to expect George Kennan. With that caveat, there is much that can be gleaned from it. more

Hedging Strategies, Thin Markets and Russia’s Future Oil

President Vladimir Putin’s Russia presents a unique challenge to the Western-backed world order. Putin believes that Russia’s power, position, and history mean that it cannot be treated as just another country. He wants the West and his neighborhood to think about how Russia might be negatively affected before they make decisions on economic issues in which Moscow has a stake. And if Putin deems that a decision puts Russia at risk, he wants the same right Russia has in the United Nations Security Council—the right of a veto. more

Sequestration and the Korean Peninsula

One can easily see how South Korean leaders might be concerned when they hear American leaders say that sequestration would be “catastrophic” for the U.S. military and that “the gap between the U.S. military and our closest rivals will collapse with sequestration.” They share a border with North Korea, a rival that still considers itself to be in a state of war with the U.S., and in the past has reacted to what it perceived to be weakness with violent acts of aggression. Many, in fact, believe that the original Korean War back in 1950 was started when the North Koreans perceived U.S. weakness and withering alliance ties. more

Mastering the Building Blocks of Strategy 

Left unchecked, market forces continually conspire to deplete profits. Powerful business strategies can counteract those tendencies, but good strategy is difficult to formulate. Indeed, our research finds that a very small number of companies create most economic profit. The research also shows that a significant number of good companies outperform even in so-called industries, where the average economic profit is less than the market. more

Why Europe’s Energy Policy has been a Strategic Success Story

For Europe, it has been a rough year, or perhaps more accurately a rough decade. The terrorist attacks in London, Madrid, and elsewhere have taken a toll, as did the Iraq and Afghanistan wars. But things really got tough beginning with the Great Recession—and its prolonged duration for Europe, including grave economic crises in much of the southern part of the continent. That was followed by Vladimir Putin’s aggression against Ukraine, as well as the intensification of the Syrian, Libyan, and Yemeni conflicts with their tragic human consequences, including massive displacement of people and the greatest flow of refugees since World War II. The recent attacks in Paris and Brussels have added to the gloom and fear. This recent history, together with the advent of nationalistic and inward-looking policies in virtually all European Union member states, makes it easy to get despondent—and worry that the entire European project is failing. more

Seven fat years: The Importance of Preserving the Strategic Petroleum Reserve

Proposals to sell some portion of the United States' 693.7 million-barrel Strategic Petroleum Reserve (SPR) to fund expenditures unrelated to energy security are misguided. While carefully assessing the size and role of the SPR is in order, the case for preemptively reducing our stockpile has not been made. While current oil prices and oil imports are low, threats to America’s energy security are not. Spare capacity from the Organization of the Petroleum Exporting Countries (OPEC) is very small, and disruptions can transmit oil price shocks to our economy abound. more

Developing Regional Business-civic Leaders

Growing a regional economy in ways that expand opportunity for all requires distinctive leadership skills that are different from managing a business or running a government agency. Currently, leaders with the requisite skills are in short supply. And when they move on, burn out, or pass away, they often leave a vacuum that is hard to fill. An important backdrop for that finding is that inclusive regional economic growth doesn’t happen on its own. Somebody has to bring together key stakeholders across program and jurisdictional boundaries, develop a common plan, and oversee implementation through a network of partnering organizations. more

The Power of Collective Action: Forging a Global Role for Mayors

Cities are the world’s oldest governance bodies; they remain the most direct, formal contact most of us have with government. They are where most people work, play, pray, and raise their families. Cities also provide real-life laboratories to test new policies. We have found that municipal leaders tend to be resourceful problem solvers, willing and able to take action even when governments are stalled. By working together, cities can help solve global problems. more

A Social Contract for Government

One of the most important innovations in government in recent years emerged from one of the most mundane aspects of public administration: the procurement of goods and services. Changes in the standard models of public procurement have transformed Western liberal democracies in the last generation by introducing public-private partnerships that have brought governments new sources of funding and expertise. These partnerships are the cornerstone of the contract state. more

Shareholder-oriented Capitalism

If investors knew as much about a company as its managers, maximizing its current share price might be equivalent to maximizing value over time. In the real world, investors have only a company’s published financial results and their own assessment of the quality and integrity of its management team. For large companies, it’s difficult even for insiders to know how the financial results are generated. Investors in most companies don’t know what’s really going on inside a company or what decisions managers are making. more

Regulating Systemic Risk

The ongoing financial crisis that began in 2007 has revealed a fundamental weakness in our financial regulatory system: the absence of a regulator charged with overseeing and preventing “systemic risk,” or the risks to the health of the entire financial system posed by the failure of one or more “systemically important financial institutions” (SIFIs). On March 26, the Treasury Department released the first part of its plan to fix the financial system, which concentrates on reducing systemic risk. The Treasury’s suggestions, if enacted into law, would go a long a way toward achieving this objective. One of the central elements in the plan is to establish a systemic risk regulator. Treasury did not identify which agency or agencies should assume this job. I address this issue, among others, in this essay on systemic risk. more

How to Strengthen NAFTA’s Next Twenty Years

Next week, President Obama will make his third trip to Mexico in as many years to attend the North American Leaders’ Summit alongside Canadian Prime Minister Harper and Mexican President Peña Nieto. Amidst a flurry of retrospectives on the 20th anniversary of the North American Free Trade Agreement (NAFTA), the summit offers a timely opportunity to ask two questions: 1) What is the current state of North American trade? and 2) What can the three countries do together to position the continent for success over the next twenty years? more

How Would Investing in Equities Have Affected the Social Security Trust Fund?

The financial reserves of Social Security are currently invested solely in U.S. Treasury bonds. Expected investment returns on these reserves could be increased if the portfolio were diversified to include riskier assets, such as publicly traded equities. By increasing the expected return on asset holdings, investing part of Social Security reserves in stocks can strengthen the long-term financial outlook of the program.  Some advocates of this policy also believe it would improve the distribution of risks between America’s young and old.  By increasing the annual fluctuation of returns on the Trust Fund, however, the shift in policy also exposes Social Security to greater financial risk and potentially to greater political risk. more

Vigilance Required in Governmental Laboratories

 From welfare to health reform, national policy makers are relying on the cherished old saw: the states are America’s “laboratories of democracy.” For better or worse, the states will be where the action is for at least the next decade. The “laboratories of democracy” idea holds that the states—smaller, more lively, more varied, closer to the people than the national government—have the ability and drive to cook up sharp, new ideas for making government work better. A strong consensus has emerged that the national government too often has failed and that the states can do a better job. more

Needs-based Segmentation: Helping Nonprofits Take Outreach to the Next Level

Many nonprofit organizations across the United States count on the engagement and involvement of the public to help them achieve their objectives. In soliciting the public’s support, most nonprofits rely on a single communications and advocacy approach, casting as wide a net as they can and trying to win “everyone” to their cause. This one-size-fits-all approach may seem simple to execute, but it is not always effective—it often results in wasted marketing dollars and missed opportunities, more

The Challenges of State Reliance on Revenue from Fossil Fuel Production

Taxes on oil, natural gas, and coal can be attractive to state governments in part because mineral assets are immobile and because states may be able to pass along some of the tax burden to energy consumers outside their states. But despite these taxes’ efficiency and distributional advantages, relying too much on them poses real downside risks for states. First, experience demonstrates mineral-related revenues are subject to wide swings resulting from fluctuations in energy markets. more

The Globally Effective Enterprise

Social technologies, in their relatively brief period of existence, have found favor with consumers faster than previous technologies did. It took 13 years for commercial television to reach 50 million households and 3 years for Internet service providers to sign their 50 millionth subscriber. Facebook hit the 50 million–user mark in just a year and Twitter in nine months. Sweeping cultural, economic, and social changes have accompanied this accelerated pace of adoption by the world’s consumers. more

Improving the Semiconductor Industry through Advanced Analytics

When used effectively, advanced analytics can not only significantly improve operations and margins but also spur growth. Yet many companies, including several semiconductor players, have been slow to embrace these techniques. According to the International Data Corporation, the global pool of data is more than 2.8 zettabytes and growing, but companies generally use only about 0.5 percent of that ocean of information to make decisions. Businesses—usually consumer-facing ones—that do collect and analyze a broad range of data achieve many benefits. Banks, insurers, and retailers, for example, have used insights from advanced analytics to build sustained competitive advantages, including stronger customer relationships and greater operational efficiency. more

The Future of Capitalism: Building a Sustainable Energy Future

Over the past several decades, one of the great discussions within capitalism has centered on defining exactly what a business is and what its obligations are to society at large and to the many stakeholders participating in business systems, including customers, shareholders, employees, suppliers, and communities, to name a few. The obligations to society have been defined in different ways at different points. For many retailers, the focus has been first and foremost on serving the customer. more

Promoting Energy Efficiency in the Developing World

Big gains await developing countries if they raise their energy productivity, research by the Burk Global Institute (BGI) has found: they could slow the growth of their energy demand by more than half over the next 12 years—to 1.4 percent a year, from 3.4—which would leave demand some 25 percent lower in 2020 than it would otherwise have been. That is a reduction larger than total energy consumption in China today. Policy makers and businesses in developing regions must not be deterred from boosting energy productivity because of the present weakening economic environment and falling oil prices; these do not affect the long-term projections in the study. more

A Better Way to Speed the Adoption of Vaccines

Vaccines eradicated smallpox in the 1970s and reduced the number of deaths from measles by nearly 40 percent from 1999 to 2003. Yet many vaccines are implemented slowly, particularly in developing countries, and nearly 11 million children die every year due to a lack of vaccinations. Burk research suggests that network analysis, which companies use to improve business outcomes by analyzing information flows and personal relationships, could speed their adoption. Specifically, these techniques can shed light on the complicated processes and interactions that underpin (and often slow down) the introduction of vaccines. more

Tackling Indonesia's Diabetes Challenge

Indonesia is in the midst of a fundamental economic and demographic transition. The country is projected to become one of the top ten economies in the world by 2030, up from the sixteenth largest today. An additional 90 million people are estimated to join the consuming class by 2030. In healthcare, too, Indonesia has made rapid strides, reducing maternal mortality by 56 percent in the last decade and under-five mortality by 86 percent over the past 50 years. An Indonesian’s average life expectancy has increased from 49 years in 1960 to 69 in 2013. World Development Indicators, World Bank, July 2015, In 2014, Indonesia introduced the world’s largest single-payor health-insurance program, seeking to provide universal healthcare to its approximately 250 million citizens by 2019. more

Eradicating Polio in Nigeria

Nigeria recently celebrated a full year and a half without a new case of wild poliovirus. The Global Polio Eradication Initiative states: “Wild polioviruses are those that occur naturally. Very rarely, vaccine-derived poliovirus can cause paralysis. Vaccine-associated paralytic poliomyelitis occurs in an estimated 1 in 2.7 million children receiving their first dose of oral polio vaccine.” The World Health Organization (WHO) has certified there has been no evidence of wild polio in Nigeria for more than a year and removed it from the list of polio-endemic countries. At the Polio Oversight Board meeting during the United Nations General Assembly in September 2015. These are milestones both for Nigeria and for the global campaign to eradicate polio. Nonetheless, continued effort and vigilance will be critical over the next two years to declare the country and the rest of Africa completely free of the disease. more

Responding to the Refugee Crisis

More than 59 million people globally are classified by the United Nations as “forcibly displaced,” the highest number since the Second World War. The conflict in Syria alone has displaced at least 11 million people, around 4 million of whom have taken refuge outside the country. We’re working behind the scenes to support the responses of governments, nongovernmental organizations, and not for profits in many parts of the world. “This mass movement of people is more than a passing news story—it’s a phenomenon that will have lasting effects,” says Mr. Rifai, a German-born, New York-based partner with Syrian roots, who is coordinating our work on refugee projects. more

Delivering the Power of Parity

Recently we’ve redoubled our efforts on gender equality, committing to initiatives such as UN Women’s HeForShe, as well as publishing major research reports including Women in the workplace (in partnership with Sheryl Sandberg’s LeanIn.Org.) Among the sobering takeaways from the research: at a macro level, global GDP realistically could increase if women participated in the workforce on more equal terms with men. Yet, at a micro level, at the current rate of progress, US companies are still decades—or perhaps even a century—away from achieving gender parity at every level of the organization. more

University-industry Partnerships can help tackle Antibiotic Resistant Bacteria

An academic-industrial partnership published last January in the prestigious journal Nature the results of the development of antibiotic teixobactin. The reported work is still at an early preclinical stage but it is nevertheless good news. Over the last decades the introduction of new antibiotics has slowed down nearly to a halt and over the same period we have seen a dangerous increase in antibiotic resistant bacteria. Such is the magnitude of the problem that it has attracted the attention of the U.S. government. more

Medicare Reforms that will Improve Care Coordination for Chronically ill Patients

In Medicare today, health care for individuals with chronic conditions accounts for a staggering share of overall Medicare spending—a significant change from 1965 when Medicare started. In 2012, the Centers for Medicare and Medicaid Services (CMS) published a report detailing the prevalence and impact of chronic conditions. Beneficiaries with six or more chronic conditions represent only 14% of the Medicare Fee for Service beneficiary population but tally 46% of total Medicare spending. more

Balancing Governance and Culture to Create Sustainable Firm Value

As a motivating example of how governance and culture may interact to alter firm value, consider Sears Holdings.  Hedge fund billionaire Eddie Lampert acquired a large position in the company nearly a decade ago.  In the first year after Lampert’s acquisition, Sears Holdings thrived and equity prices outperformed the market by 18 percent.  Two years later, profits had declined 45 percent and sales retreated to pre-Lampert levels.  Press commentary suggests the cause of Sears’ descent is Mr. Lampert’s re-orientation of Sears’ corporate culture toward results. Lampert runs Sears like a hedge fund portfolio, with separate business units competing for his money.  Such a structure fostered change in the norms and expectations that employees have for how they need to behave to fit in and succeed in the firm. more

Transportation Reform of 1991 Remains Relevant

 Twenty years ago this week, President George H.W. Bush signed the Intermodal Surface Transportation Efficiency Act of 1991 into law. Even casual observers of transportation policy recognize the refreshing-sounding acronym (ISTEA or “Ice Tea”) and the other clunky-sounding TEA bills that followed (TEA-21 and SAFETEA-LU). ISTEA is rightly considered to be a watershed moment in U.S. transportation policy. It offered a new framework for thinking about transportation by assuring states and metropolitan areas of specific levels of funding and giving them the flexibility needed to design transportation mixes that met their needs. more

New Partnerships for American Rail

American passenger rail is in the midst of a renaissance. Ridership grew by 55 percent since 1997 and is now at record levels, with over 31 million travelers annually. That’s faster than other travel modes like aviation and far outpaces the growth in population and economic output during that time. Travel corridors like New York to Washington, Seattle to Portland, and Chicago to Milwaukee all boast higher shares of riders on rails than in the air. Painting such a rosy picture of American rail may seem incongruous to those that like to chastise its beleaguered carrier, Amtrak, for transgressions related to food service, timeliness, and subsistence on federal subsidies. more

The Federal Capital Budget and Lessons for a National Infrastructure Bank

When it comes to infrastructure, President Obama faces a tricky balancing act. On one side he needs to invest in the kind of infrastructure that the nation needs to remain competitive and put us on the path to a low-carbon future. On the other he has to operate in a constrained fiscal environment with programs that are in fundamental need of reform. With that as a backdrop the president’s proposed 2011 budget is an interesting collection of investments and reforms. more

Constitutional Issues in Information Privacy

The U.S. Constitution has been largely ignored in the recent flurry of privacy laws and regulations designed to protect personal information from incursion by the private sector, despite the fact that many of these enactments and efforts to enforce them significantly implicate the First Amendment. Questions about the role of the Constitution have assumed new importance in the aftermath of the September 11 terrorist attacks on the World Trade Center and the Pentagon. Efforts to identify and bring to justice the perpetrators and to protect against future terrorist attacks, while threatening to weaken constitutional protections against government intrusions into personal privacy, demonstrate vividly the value of information collected in the marketplace and the need for such information in the future. more

A New Alignment: Strengthening America’s Commitment to Passenger Rail

American passenger rail is in the midst of a renaissance. Ridership on Amtrak—the primary U.S. carrier—is now at record levels and growing fast. This research shows that the country’s 100 largest metropolitan areas are primarily behind this trend, especially ten major metros responsible for nearly two-thirds of total ridership. Driving the connection between these metropolitan areas are short-distance corridors, or routes traveling less than 400 miles, that carry 83 percent of all Amtrak passengers. more

Redefining Renewable Biomass: A Policy Change with Cascading Outcomes

In the wake of the COP21 international climate negotiations that culminated in the Paris Agreement to limit global temperature rise, the Obama administration looked to its Clean Power Plan (CPP) as the centerpiece of its emissions reduction approach. But with the recent Supreme Court “motion to stay,” the CPP is at a temporary halt. As the CPP makes its way through the courts, it is important to consider an alternative and achievable policy that can help the U.S. meet its long-term climate commitments under the Paris Agreement. more