Economic Digest – December 2017

DENTISTS

There is fierce competition for scarce patients in the larger cities of Canada. A 2016 study shows one dentist per 1,622 patients compared with one for every 1,742 in 2005. Today, practices routinely stay open seven days a week, often with extended hours and they reach out to patients rather than vice versa, either electronically or by phone to book appointments and offer incentives such as free teeth whitening to get patients in the door. To start a new practice in downtown Toronto runs about C$800,000 to $1-million, meaning that dentists starting from scratch can expect about three years of negative cash flow before they can turn a profit. The shortage of patients has the effect of making it easier to buy an existing practice than to start from zero.

YOUTH

Since 2005, the share of young people (aged 20-24) who are not in employment, education or training (NEETS, for short) has fallen slightly, from 17.3 per cent to 16.3. Some countries have made striking progress, largely owing to increased access to further education. Nearly half of young Turkish adults were NEETS in 2005, by 2016, less than a third was. In Germany the figure was 18.7 per cent of youth and by 2016 the figure had dropped to 10.8 per cent. However, the share of NEETS in Ireland, Portugal and Spain has risen to at least a fifth since 2005 principally because of the financial crisis and its aftermath.

INDIA

Once the pride of British colonial rule, India’s creaking rail network is poised for its greatest transformation in decades as work begins on a bullet train. The scheme will be funded largely by a US$20-billion loan from Japan, underpinning a deepening strategic alliance. The trains will reach speeds of up to 220 miles per hour and the project includes a four-mile tunnel under the Indian Ocean near Mumbai. The rail link between Ahmadabad and Mumbai will cut the journey from eight hours to three. There is widespread scepticism as to the wisdom of spending billions on a bullet train when India’s dilapidated rail network desperately needs investment and repairs. The network, which carries 23-million passengers a day on 45,000 miles of track has a dismal safety record. More than 33,700 people died in rail accidents in 2015.

ROBOTS

Scientists have built and tested a walking robot that can pick up and carry objects, but is so small that it cannot be seen by the naked eye. The nanobots, made from DNA have the potential to assemble new chemicals and materials at the molecular level, build incredibly miniaturised circuit boards and deliver medicines to the blood stream.

TIME

A recent study of 3,000 firms across 11 countries claims that small and medium sized enterprises (SMEs) are spending an average of 120 days a year on administrative tasks such as accounting and generating invoices. This leaves less time to develop new products or the designing of a new marketing plan.

ON-LINE

The recent filing of Chapter 11 by Toys R Us highlights the challenges of e-commerce and typifies the ailments of bricks-and-mortar retailing. Toys are particularly suitable for online shopping. Unlike a dress, they do not need to be tried on for size, and unlike a peach, do not need to be felt for ripeness. Mothers aged 25-44 spend almost as much time shopping as they do eating and drinking. Given the choice of buying a toy online or in a store, many parents opt to buy online. Amazon makes that extraordinarily convenient. It is expected that 41 per cent of toys and games in the US will be purchased on line this year, about twice the proportion sourced from the internet in 2009.

FLOODING

Consumer protection agencies are warning those shopping for used cars to stay alert as some vehicles damaged in the recent floods south of the border may appear on the Canadian market. Many vehicles will likely be disposed of by insurers, but some may be imported into Canada and sold to unsuspecting drivers. The vehicles may seem to be in perfect condition but damage caused by flooding may take months or even years to appear. Over time, water damage can keep airbags from deploying, cause the car’s computers to shut down or ruin electric steering systems.

SLAVERY

Last year, 25-million people around the world were in some type of involuntary servitude; between 2012 and 2016, 83-million were subjected to at least a brief period of such work. A quarter of such exploitation happened outside the victim’s country of origin. The definition of forced labour was laid down in an ILO convention in 1930: work or service extracted from people against their will and under the menace of a penalty. Around a sixth of people experiencing such treatment today are forced to work by the state, primarily in prisons or the army (including conscripts made to do non-military tasks.) Another 4.8-million were victims of sexual exploitation.

PODS

Sleep pods are coming to more and more airports. The concept is not new, Japan opened its first capsule hotel in the late 1970s. Last month, Washington Dulles airport put out a call for proposal for a company to provide a comfortable place within the airport to sleep and relax. Mexico City’s airport has just added space-age pods for US$30 a night. Pods in Amsterdam, London and Paris are charging $42 for four hours. A company which is operating in three American airports is charging $32 an hour. Some pods have televisions and charging stations and sell items such as toothbrushes. One concern with the concept is

revenue. Airports generally take a cut of the money that retailers in the terminal make and some airports may think twice before giving up room to pods.

ENERGY

The Canadian Paediatric Society is warning that children and teens should avoid sports drinks and caffeinated energy drinks which can pose a range of health risks from obesity and dental cavities to heart rhythm problems and delusions. The Society is advocating for continued legislation to prevent marketing of these energy drinks and sports drinks to children and adolescents in general. Currently, such advertising is restricted but energy drinks are still often targeted to young people at sporting events and on social media.

GARDENS

The world’s botanic gardens contain about a third of all known plants and help to protect 40 per cent of endangered species. Scientists say that with one in five of the world’s plants on the brink of extinction, botanic collections hold the key to saving rare plant life. In the first detailed study of plants grown in botanic gardens, they recorded more than 100,000 species. About 500-million people visit botanic gardens each year. As well as being popular visitor attractions, they are a centre of learning and education.

ANTIBIOTICS

Around 15,400 tonnes of antibiotics a year are sold in the US, of which 80 per cent go to farmers. Chicken farmers use even more than those who raise pigs and cattle. Only a small percentage of the drugs are used to cure illnesses. Their main function is to make broilers fatten up more quickly or to act as a prophylactic against cramped conditions in which they are raised. A chicken’s weight at slaughter today is twice what it was 70 years ago and it achieves that weight in half the time. The EU banned the use of antibiotics for growth promotion 12 years ago.

PUBS

Business tax rises will kill Britain’s pubs, beer campaigners have warned, as one in three have closed down since the 1970s. Over the past four and a half decades, at least 25,000 pubs have closed, taking the number from 75,000 to 50,000 today. Research shows that sales of wine and spirits now make up a third of pub takings.

SHALE

Alberta’s most promising shale prospect could yields billions of barrels of crude, according to a new study, that points to a substantial resource beyond the province’s maligned oil sands industry. Duvernay shale, which covers 130,000 square kilometres of the province’s western flank, is a smaller cousin to the Eagle Ford shale in Texas, one of several that has helped transform the US into a major global crude exporter. It shows that Alberta has huge potential outside of the bounty of extra-thick crude surrounding Fort McMurray. Exact results will vary depending on economics and other factors, but the Duvernay has the potential to produce 3.4-billion barrels of crude oil, 76.6-trillion cubic feet of natural gas and another 6.3-billion barrels of natural gas liquids.

SANITATION

India vies with China to be the world’s fastest-growing large economy, but its record on basic sanitation is dreadful. Around 450-miillion people relieve themselves in playgrounds, behind trees, by roadsides, and on railway tracks and river banks. In cities, 157-million urban dwellers, more than the population of Russia, lack decent toilet facilities. The World Bank links one in ten deaths in India to poor sanitation. The government has set aside US$29-billion for a nationwide sanitation programme which claims to have constructed 49-million toilets to date, with another 61-million still to go.

MINING

The Brazilian government has revoked a controversial decree that would have opened up a vast reserve in the Amazon to commercial mining. The area, covering 46,000 square kilometres straddles the northern states of Amapa and Para. The area is thought to be rich in gold, iron, manganese and other minerals. From the moment the decree was signed, it was widely condemned by activists and celebrities who voiced concern that the area could be badly compromised.

MILK

Fizzy milk could be about to hit supermarket shelves with one of the UK’s biggest milk producers planning to make it the next big drinks trend. A dairy company owned by 12,500 farmers has said a sparkling fruit and milk drink will be trialled in the UK, Singapore and the UAE before being rolled out across the world. It comes as millions of consumers are ditching cow’s milk for non-dairy milks like almond and coconut, leaving milk producers desperate for business. Between 2014 and 2016, milk sales in the UK have fell by around US$325-million. In countries including Iran, Turkey and Afghanistan, a milky drink, which is often served fizzy, is commonplace.

RESEARCH

The UK and the US have reached a deal to develop a special relationship for science. An agreement between the two countries aims to make it easier for researchers to travel, collaborate and share facilities. US science bodies are said to be eager to take advantage of research opportunities lost because of Brexit. Possible strategic areas of collaboration include: synthetic biology, information technology and GM research.

SAVINGS

A start-up is turning waste into wealth by helping companies like IKEA slash the amount of food they throw away. The global hospitality industry throws an US$100-million worth of food away estimates a company called Winnow, which says its technology can save commercial kitchens big dollars and stop good food going to waste. Winnow shows chefs how much they are wasting in real time and what it costs their employers. Retail giant IKEA estimates that Winnow have helped its in-store restaurants save the equivalent of 350,

000 meals worth nearly $900,000 in just eight months. The London-based start-up has been largely funded by “impact investors” who want a measurable environmental or social impact on their return.

FRUITCAKE

Ice-covered Antarctica is one of the world’s most hostile natural environments. But a new find by the Antarctic Heritage Trust suggests it is no match for a 106-year old British fruitcake. Conservators found the elderly cake on Cape Adare, and believe it belonged to British explorer, Scott of the Antarctic. A New Zealand-based Trust found it in Antarctica’s oldest building, a hut built by a Norwegian team in 1899 and used by Scott. Although the cake tin was rusted, it was in excellent condition and the cake smelled edible.