It is still going down....

In the last three months I have witnessed the widening of the first financial crisis that I could follow on the news and understand its extent. Despite the fact that I see what are the reasons behind it, I am still stunned when I look at the evolution of shares since the beginning of this year. That it, in average shares have fallen with 70% since January 2008.

What is even worse is that we have been warned by economists that this is not the bottom of the crisis, although for us normal people it seems to be bad enough. Apparently it will become even worse, as the financial crisis extends to other industries and to the entire economy.

I will stop at the latter part of the previous statement as I find that this is where it hurts us. The scarcity in loans and credits allowance that exists nowadays has a direct negative impact on the businesses, that are stopped from growing through the use of long-term credit lines for diversification purposes. What is more, businesses are affected short-term also through the cut of the short-term credits. These ensured a balanced working capital and thus smooth transactions between producers and their customers.

There is even more to this. As firms cannot grow anymore and global demand for all products contracts (see the demand trend for crude oil, whose price fell to 40% of its value this spring), production level decrease. This leads to a decreased employee capacity, which will be met through:
- switching some of the full-time positions to part-time work
- temporary and permanent layoffs

From here you now the way: unemployment -> temporary increasing need for social security -> higher budget deficits + decrease in economic growth -> need for external financing -> increasing role of IMF, European Central Bank -> increasing importance of the state again

All in all, the future doesn't look bright.....it seems grim and this raises my concerns about the conditions of launching into my professional career. For sure it's not the best time for entering the labour market, but there's little room for me to choose.

Winter and the tourism industry

After a sad, rainy autumn, winter has finally come to Switzerland. And it's not only me who is happy that at least now I can clearly define what season it is...Happier than me are the hotel managers who, despite the financial crisis, have their hotels fully booked for the Christmas - New Year time frame.

So, how can this be explained?

I have two arguments for this:

1) Most of the bookings for the Christmas- New Year timeframe were made well in advance, that is in July - August, when the crisis didn't seem so grim. Added to this, I have a secondary cultural explanation for this behavior. As most of the tourists are Germanic, which have an increase need for planning in advance, they wanted to make sure that they have secured well in advance every detail of their winter holiday.

2) The impact of the crisis on the individual people comes with a delay of a few months - this means that the demand for vacations will decrease for spring and summer holidays which are to be booked now or until December.

How come this delay?

It is part of a vicious circle, which starts with the scarcity of money and loans, which negatively affect the growth needs of the businesses. What is more, as people decrease their spending and increase savings in the expectation of bad times, the demand for products and thus the industrial production decreases. This leads to a decrease in the business activity, in shrinking capacity and temporary layoffs.

To conclude, the tourism business will notice the effects of the crisis and recessionary period starting with the end of this year.

Copenhagen - the smallest creative European capital

My first visit to Scandinavia started with Copenhagen, the capital of Denmark. It is known to be the smallest capital in Europe.
Although I haven’t spent too much time in Copenhagen so that I know it very well, four days were enough for me to create an impression about the creative potential of the city.

Thus, I can now say that Copenhagen is one of the most creative cities in Europe, much more creative than the cities in the German space I would say. Why?
As I walked through the inner city, I recognized all the characteristics that Richard Florida was talking about when describing a creative city. That is:

- It has a good transportation system which promotes the use of ecological transportation means (bicycles and Christiania bicycles).


- It is open to gay and lesbian communities.

- It allows everyone to behave naturally and to show off their personalities.


- It offers enough leisure and entertainment activities catered to all tastes: opera, theaters, but also lots of coffee shops, bars, clubs.































Besides this, you can see singers and artists performing on the streets.

Micro-urban events are part of Copenhagen daily landscape. In the picture below you can see a Lego event, where the inhabitants had the opportunity to show their creativity using Lego stones (no direct advertising was attached to this event).


















- Different parts of the town cater different social classes and ages – there are areas, which are more family friendly (quiet and close to the beach); other areas (next to the S-train south west line) which offer modern housing conditions at an affordable price; and student areas or for others with a similar budget.

However, there are also some negative things that I noticed in Copenhagen, like:

- Youngsters (teenagers) and people in their 20-ies – use to excessively drink during the weekend and then stroll through the city at night. For the ones like me not used to this landscape, it was a bit shocking, to say at least.

- Christiania Quarter – is a city within a city located in Christianhavn Quarter. At the first sight it looks like a ghetto. The inhabitants of this community are people who refuse to integrate in the Danish community. This small quarter benefits of tax exemption, but no real business is run there. The community members have their own workshops, art shops, or whatever they have thought of doing to sustain themselves. While a few years ago, this place was not visited by external people, the police interviewned and now this part of the town can be crossed, at least during the day.



All in all, Copenhagen left me with the desire to return to this place some other time and enjoy more of what it has to offer. It is a very alive city so to say and this can energize its inhabitants.

Lund - What do you need to have an exciting life in a small city?

When one usually thinks of small towns, especially in Romania, first characteristics that come to mind are: boring, uninteresting, limits oneself development, etc.

However, today I was impressed to visit the town of Lund and see what high quality of life people living there have. Lund is an university town situated in southern Sweden, about one hour by train from Copenhagen..

So what makes life so exciting in Lund?

1) Infrastructure – transportation system is very extensive and the town is bicycle friendly. The town is very well connected by railway and highway to bigger centers like Copenhagen (1h distance), Malmö (15min), Götheborg and Stockholm.

2) People - Lund is one of the oldest social sciences university in Europe, dating back from the 17th century. Thus you can see a lot of young people on the streets, which makes the town alive.

3) Social capital – there is an opera, a theater, an arts’ center, a football stadium, lots, lots of green public places.

Furthermore, the town has a lot of associations, including sports associations like: kajak association and a kayak school.
There is a special lively atmosphere that the town has even on Sundays, a day of the week when many other cities are practically dead.

I would like to extend the third point, about the social capital as I find it very interesting how the town succeeded to attract and keep the creative class there. From my daytrip impressions I can conclude that:

- the arts center provides a meeting place for young and old inhabitants of the town. On Sundays it transforms itself into a self-service restaurant and the place is roaming of young people, families with small children running around as well as eldery people with a young spirit.

- the numerous caffees and restaurants all over the inner city allow everyone to have an intelligent conversation in an enjoyable atmosphere while tasting different national food specialities. This high variety of places impressed me in such a small town. However, we need to be aware that the town is in Sweden, a country which is more foreign friendly than many other EU countries.

- the town has incredible many green areas and parks and is crossed by several water canals. The latter allows young and old to practice all sorts of water sports, especially kajak , rowing and swimming.

There would be so much to analyse at this town and learn from its features. However, I feel that in this case the local government has played a critical role in understanding the needs of the inhabitants and being aware that they need to keep the creative class in order to foster a sustainable economic growth. Furthermore, local government is conscious of the competition that it faces with neighbouring towns like Malmö or Copenhagen.

Sustainability of the third way

Yesterday I was talking about how German women give up their careers entirely in order to have a family and about the predominance of the men in the German business landscape.

In the last two days I've faced a totally different model, usually called in economics "the third way". Namely it is the economic model of the Scandinavian countries. This model is characterized by solidarity, an extensive social system financed through a high income taxation on level.

So is it efficient?

At the first view it seems to be as streets are clean, transportation system is very developed. What is more, what I found interesting here is the high proportion of young mothers with children. That is with 25 women already have 2 kids. Even if at the first sight this has made a strong impression on me, I found three explanations for this phenomenon.

1) The extensive social system that I was previously talking about supports young people to have children early in their adult lives.

2) There is a different mentality that I've encountered in these countries. People get together and form a couple and then a family early in their lives, but in 60% of cases these relationships end.

3) The labor market is flexible enough to offer different possibilities to work through: part time and flexible time working, teleworking or other forms of working from home.

All these encourage couples to have a family soon enough as, contrary to Romania, they don't have think of the financial challenges. The state has sufficient resources to support them in such cases.

What other explanations do you see to be plausible?

Reading a culture by its airplane passengers

Never before had I made a connection between the passengers that one meets on a route and cultural particularities. However, this time it was too obvious not to notice.

While flying from Zurich to Copenhagen via Düsseldorf, I couldn’t helped notice that 90% of the passengers in the plane were 30+ German males, all wearing a business casual outfit. Taking by their looks, they were all on business trips and not as tourists. And so I wondered: where are all the working women? Germany is a country with a proportional number of men and women, so why this phenomenon?

Then I remembered what I discussed with some German colleagues not too long ago. Apparently Germany is one of the men dominated countries in the EU. That is, 50% of women over 30 in Germany stay at home or have part time jobs. Furthermore, some of my German colleagues recall that they’ve always had their mom at home around and so did their friends.

However, I expect that with time the mentality has changed and now women consider having a family and a job. But, surprise.... Yesterday I talked to a female German colleague in her 20-ies, who told me some things which surprised me to say the least. She shared her view with me on this family and career issues. Apparently she doesn’t want a career in investment banking, or in other challenging businesses.

What is more, she would prefer to have a routine job and plenty of time than a challenging job but less time. This is not valid for the future 30+, but also for now. Moreover, she doesn’t imagine having a family with children and not being the entire day home with them. In other words, she intends not to work anymore when she has children.

If I compare this to the other countries, namely to Eastern European countries and Romania in particular, things are quite different. Romanian females have both a career and children and can still make it. The main reason for this situation is financial, but now it has become more a lifestyle.

All in all, it’s quite interesting to compare cultures on dimensions which are less obvious for outsiders.

The Centenary

Dear all,

Today we won't debate anything, but we'll set ouselves in a weekend mood. However, so that our brains don't get too bored, look at the insights centenaries give about life.

I was positively impressed to see this photo exhibition on the hallway at the University of St Gallen (HSG). It sends me the impression that HSG has still kept a hidden human side although it doesn't really show it too often.

Still, I hope this feeling is true and not my other hunch, which says that the university is doing this only for PR, brand image purposes so that it shows in the media as a multilateral oriented university.

Regulations for bicycles in Switzerland

I have been waiting for a long time to happen and it finally did: the police stopped me while I was biking today. Strange, isn't it?

In Romania it would be strange because there bicycles are de facto not considered to exist on the streets although there are some cyclists on streets. Police is Romania is probably too concerned with managing the automobile traffic and does not get involved in how bicycles circulate.

So what does this mean for the cyclists?

Basically, they can go whatever, however they want on the streets as long as they don't get hit. Furthermore, they needn't have any lamps or other protection elements. They can even get drunk and still hop on the bike and cycle to get home. However, don't think that this has only advantages.

So what are the disadvantages?

First, you are in danger when you find yourself on the street between the cars because they see you only as an obstacle and not as an equal participant in the traffic.
Second, if there are no rules to follow, the cyclists can adventure in dangerous maneuvers that put their lives in danger.
Third, you don't have any special parking places for your bike. this means that it can easily be stolen or hit if somebody thinks it stands in his/her way while parked.

But how is it in Switzerland?
I'll mention only those facts that I usually come across.

1) Every bicycle that runs on the streets needs to hold a vignette, similar to the ones for the cars. In this case, this is an insurance, like a car insurance.

2) It is forbidden to cycle if you drank. Should the police stop you, you risk losing your driving licence. Yes, your driving license although all you drove was a bike.

3) The police can stop you like any traffic participant and ask you for your documents. The reason why they stopped me today was to check if I had all the lamps. If something misses, then you risk being fined.

4) Cars usually pay great attention to the cyclists and give them priority. It somehow makes you feel good when you make a Porsche stop in front of you to allow you to cross the street. :-)

Coming back to more serious reasons, all this attention given to cyclists as well as the special dedicated bike routes promote the use of bikes for within town circulation, making the air more breathable and reducing noise.
For the cyclists it brings some significant advantages: rapidity especially in traffic jams and use of bike both as a sport and as a utility vehicle.

What do financial markets and relationships have in common?

"Once confidence is destroyed, it's not easily restored" says Angel...

This statement is usually used in the context of a relationship when one of the partners loses trust in the other because of an incident. However, in this case, the sentence refers to the financial markets. So, what is it all about? Who is the actor in the financial market that cannot be trusted and who is the other party?

According to academics, the injection of governmental money that is offered to the banks in distress is not enough to counteract the descending trend of stocks on the market. This happens because banks are afraid that they do not hold enough information about the other players in the industry, so they have limited willingness to lend money to fellow banks.

To use the relationship metaphor again, let's imagine that one of the partners does something immoral, which makes the other one to lose confidence. After such an event it takes significant time and efforts from both sides for the trust to be reinforced again. Furthermore, the next time you will be even more careful knowing what it can happen. As the saying goes " after you got burned with soup, you will blow even in yoghurt".

Back to the financial markets. What does this mean? Basically, as long as banks don't start trusting one another and start to lend money to each other (credits), we risk not to have enough liquidity on the market. This can happen despite all the bad asset purchases made by the governments and despite all the insurances which governments now give to the financial players.

So, is it accurate to compare the relationships among banks with interpersonal relationships?

Probably the complexity of both lies in different aspects, but they seem to have some things in common, namely the need for:

- trust / confidence
- open communication and information exchange
- long term benefit orientation

Let's talk again about rural development...again

Yesterday I visited...again...the beautiful town of Appenzeller. For the ones who know the place, I know that you are already jealous for not being able to re-see it again (sic). For the ones who haven't visited it, pay attention and continue reading. :-)

So, how can you make money if you're living in a town which is known only for keeping its traditional way of living?

1) Take herbs from the area, mix them and sell them as Appenzeller Tea.
2) Do you have any fruits in your garden: strawberries, grapes, plums...whatever grows in your country. Then you should make spirits (all sorts of schnaps, alcoholic drinks) out of them, put them a local brand name and sell them in souvenir shops.
3) If you have anything else to sell which is locally produced, then pack them ecologically, traditionally and sell them at a premium price.

In every small town or village that is on a main road or has a touristic attraction spot such ideas can be used as a source of additional revenue.


And here are some examples to inspire you:

Säntis Trip

After a month of daily raining and pale light the entire day, today we were lucky enough to have a sunny day with a clear, blue, autumn sky. Needless to say that I had to take advantage of this unique day I would say and go on a trip. And what can be a more appropriate activity than climbing up the Säntis on such a clear weather?

For the ones not yet initiated in the Appenzeller Region, Säntis is the highest peak in Eastern Switzerland, with an altitude of about 2500 m. As you can see from the pictures bellow, it has worth the effort to get there because the view was absolutely fantastic and left me breathless.

The Säntis peak is situated in the Region Appenzeller, which offers one of the most authentic Swiss landscapes and where you can still see how the inhabitants live according to the traditional, local customs.
Appenzeller is the land of the mauve Milka cows, of snow-white sheep, of crystal blue lakes and fresh green grass.

Enjoy the pictures!

It's time for critical life questions

While catching up with several high-school and university colleagues, I've discovered that we share the same concern at the moment:
What to do with our lives?


After being done or almost done with our studies, it's high time for our next big decisions in life:
"where will I work? in which industry? what do I enjoy doing? where do I want to live? what's more important to me?"
become daily questions that make our minds twist and turn.

So, how do I approach it? I've started asking people I know, mostly colleagues from Romania, about what they want in life, how they perceive the Romanian business environment and career opportunities there, and if they have ever considered to work outside Romania.

The answers were congruent no matter what they studied. The conclusions of my small scale survey are:

- Romania is a place of lots of business opportunities. As an entrepreneur you can make money whatever your business is specialized in. As an employee, the more challenging career opportunities in terms of tasks and learning perspectives are to be found in multinational companies.

- The ones surveyed all shared the wish of working sometimes in the future outside Romania, even if not on a permanent basis.

- Neither of them knows for sure what they want to do for a job and they see their first job as "scanning the industries to look for what I like". As long as you're enjoying the activity that you're doing, it's enough for now. You needn't have to stay in your first job forever.

When I asked them on what criteria they choose the location to live in, some patterns were evident:

- choosing to be where the most interesting accessible career opportunities were
- choosing to stay in the same city as where they have studied because they have most of their friends there
- choosing to be close to the family

When being asked why they plan to go and work outside Romania, opinions were also congruent:

- outside I can have a better quality of life - free time opportunities, housing, transportation system
- the mentality of people is different - waiting for someone to help you vs. making your way
- i want to work in a diverse and international environment - enjoy diversity of people, food, traditions
- i want to be able to use foreign languages at my work


Although this didn't really help me in making my decisions, it was a nice feeling to see that I'm not the only one who is going through this tough time now. We should have faith that things will turn out to our best and try to find the answers to ONE question only at a time.

Strategic positioning in the mobile handset sector

Let's start by recalling some important dates:

- 2008, July, the 9th.: the new LG Secret (LG-KF750) touch-screen phone is launched
- 2008, July, the 11th.: new iPhone 3G is revealed by Steve Jobs
- 2008, September, the 23rd. : T-Mobile G1 (Google phone with the Android OS) is released
- 2008, October 2nd.: Nokia 5800Xpress (Tube) came up on the market

Nokia finally released yesterday its first touch-screen mobile phone, at a two years' distance from the pioneer Apple. This has been one of the last novelties for this year coming from the leading mobile phone producers.
The purpose of this post is not to explain you the technical capabilities of these smart-phones, neither to compare them on a point by point basis. What I want to do is to make you aware of the changes in the strategic positioning of these companies.

I will try to position the four mobile handset producers on three dimensions:
1) technological novelty
2) price (comparison on the price on www.electromaticinc.net)
3) fun dimension

So let's take them in chronological order.

<The LG secret is the latest LG mobile phone with a touch-screen, which brings with it a 5mp integated camera. However, it doesn't have WiFi. The price is 400$ without a contract. Analyzed on the three dimensions, it is positioned high in the fun dimension and medium priced, with medium level of novelty.



The second generation of iPhone, the 3G brings with it a new, smoother design, and is technologically more advanced than the previous iPhone version. It includes: 3G technology, GPS, Wifi and a 2mp camera. It is being advertised as a "gorgeous phone" (Steve Jobs). If we place it on the three dimensions, it is high on all dimensions.

The T-Mobile G1 costs about 500$ without a contract, has WiFi, GPS and TV-out and a 5mp camera included. Plus, it works on the new Android operating platform. However, design-wise it is not so "sexy", nor as fun as the iPhone. The advantage is that it allows music download from all Internet platforms, unlike the iPhone who supports only the iTunes. Thus, we position it high on the technological dimension, high on price.

Lastly, the Nokia 5800 Xpress has bluetooth, a 3.2.mp camera and an improved sound surround included. It operates on a new Symbian platform which is supposed to be more user-friendly. Its Nokia Music program should be a response to the HTC G1 phone and to the iPhone. It is priced at about 400$. On the three dimensions, I would position it low on technology, medium on price and medium on the fun dimension.

To conclude:
- Apple has succeeded to maintain its strategic position despite its diversification strategy in the mobile phone sector. Apple stands for innovation, user-friendliness and fun at a premium price.
- LG keeps its position as a producer of handsets with rich media characteristics at a medium price.
- T-Mobile G1 aims to directly compete with the iPhone, although it lacks some of the "sexy touches" that the iPhone has. This strategic positioning is confirmed also on price dimension.
- Nokia - maintains its position as a mainstream phone producer, whose phones are characterized by reliability and viability. Price-wise, it is premium priced as compared to normal phones, but a little under-priced when compared to smart phones.

All in all, Nokia seems to be safe for know as it has a high brand recognition, high customer fidelity and a good distribution network. However, Apple's decision to lower iPhone's price makes me wonder where it wants to position itself in the long run. Provided that it keeps the same prices and widens its distribution network to include other network carriers than AT&T and Orange, it could become Nokia's direct competitor on the smart-phone segment.

Finally, let's not forget about Research inMotion, who produce the BlackBerries. For the moment, they are safe as they are on a niche segment, directly targeting big corporations. However safe they might feel because of their existing customer base and close contact with their buyers, they should take into consideration to upgrade their technology. Otherwise, the G1 and its next versions might become a threat.

Switzerland closes itself again

Do you remember my post about the the free movement of persons in Switzerland? If you don't, let me shortly remind you. Switzerland has signed several treaties with the EU which are aimed to enhance the businesses between the two parties. One of these treaties is related to the free movement of persons. Switzerland is supposed to prolong the treaty in December, when it will also include on their lists the two newest EU members: Romania and Bulgaria.

Today however, representatives from three parties have gathered enough signatures so that they can now propose in the Parliament a Referendum against this treaty. Probably the proposal won't pass through. Anyway, even the idea that members of three parties have considered taking this action is unbelievable.

In the world economy where Switzerland is one of the countries that benefits the most from the globalization (think of all the multinational companies headquartered in CH), it chooses to initiate such actions that makes it more difficult for the people to settle in the country. In the same line of reasoning, Switzerland needs to understand that it should keep itself open if it doesn't want to bear the consequences of companies leaving it because of its inflexible regulations.

Below you have the opinion of a tabloid newspaper about the free persons movement issue.
For the ones unfamiliar with this story, there is a long rivality between the Swiss and the Germans that is visible even at my university. Why? Germans are accused of coming to Switzerland for studies and then choosing not to leave the country anymore. Furthermore, due to the educational regulations, only 25% of the students may be of foreign citizenship at public universities. This makes to select only the best German students, who after graduation get the jobs of the Swiss. And so goes the story.