Inequality in distribution of wealth


My attention was drawn yesterday to an Oxfam report highlighting that the world’s richest 62 people own as much as half the population of the world. Since 2010 that’s come down from 388 to 62, which does seem to be a worrying direction, but frankly whether 388 or 62 that’s an incredibly tiny fraction of people holding as much as 3,700,000,000 people (roughly). How can that happen? Taxation has long been a mechanism for the re-distribution of wealth and Oxfam make great points about the need to address tax evasion and tax avoidance on an international scale.

But the last time I saw so much concentrated in so few it was when I looked at the relationship between book sales and sales rank on amazon, see my earlier post here. I had a graph that just hugged the axes. I then found that sense could be made of the relationship when you looked at it as a log – log relationship. Drawing the parallel between books and wealth, if you assume that there are 7.4 billion people in the world and they all write a book, then take the sales of the author ranked at 3.7 billion and assume everyone below that sells the same number, which hugely exaggerates the sales of the bottom half of the population, those sales would add up to 118 books. The sales of the top 62 authors would total 27,700 books. So that’s an even more skewed distribution of book sales to the elite few than world distribution of wealth. Of course it’s a lot less important than the big question of inequality, but I’m an engineer and believe that if you want to solve a problem you have to really understand the problem and the maths behind it. Book sales have little to do with taxation but much to do with publicity, celebrity, fashion, connections and talent. Now hands up, I don’t know the answer, and my maths has grown rusty. So I pass on the analysis to my younger readers. I just feel in my water that there is some interesting similarity in the mechanisms at work that concentrate so much in the hands of so few.

 

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Clarity of Risk Description


A good tip that I learnt a few years ago is that you should start a risk description with ‘There is a risk that …’ it encourages you to describe the uncertainty and the impact it may have. For example Budget cap isn’t a risk description. There is a risk that the budget cap may be exceeded resulting in delay or cancellation of project packages, is a better description of risk.

Creative Writing and Plots


I blogged about my journey from a non-fiction to fiction author here, and celebrated my first fiction publication here. One important thing I failed to tell was why my score improved from around 65% for the 1st assignment to, I think, 95% for the 2nd assignment. It also went on to be published as There Must be More in the anthology Something Hidden. My brilliant tutor @brianevansjones had observed that my first story didn’t have a point. I was digesting this whilst watching the quiz show University Challenge when the question was asked, “who wrote The Seven Basic Plots: Why We Tell Stories?”  I thought I don’t know, but I need to read it. It’s Christopher Booker, by the way.

It’s a very thorough, well researched and well written book. It’s a very long book but kept me enthralled to the end. This book is the main reason for my improved writing from 1st to 2nd assignment. I made the attached aide memoir to remind me about plotting. I hope it helps.

Seven Basic Plots

Electricity Storage – Realizing the Potential and Cutting Red Tape


I have written several times before about climate change, renewable energy and the vital role energy storage has to play in renewable energy. The Institution of Civil Engineers have just published an excellent report Electricity Storage – Realising the Potential which focuses on the benefits and barriers. Whilst I have been very aware of the benefits, I hadn’t realized the absurd red tape which has been preventing more storage being provided.

Apparently because electricity storage is both a source of demand and generation an operator pays double the BSUoS charges (Balancing Services Use of System). Also because storage is classified as generation, DNO’s (Distribution Network Operators) are not permitted to operate it. Seems crazy to me. @David_Cameron I know you’re busy but please take a look at the ICE report.

Politics, Cameron’s Speech and Ice Cream Vans #CPC15


Whilst eating my lunch I’ve been reading coverage of David Cameron’s speech at the Conservative Party conference. Some of the Twitter comments have been interesting. The Telegraph columnist @DPJHodges said “This isn’t a centrist speech. It’s a centre-left speech” and former Young Fabian chair @Jhallwood says “I’m tribally Labour, I’ve fought for the Party since childhood and I’m nodding along to so much of this speech. Big problem.”

Whilst studying for my MBA one of the modules included some political theory and the bit which has stuck in my mind concerned the stability of a two party system and the instability of a three party system.  The argument is as follows. Imagine a beach on a summer day. An ice cream van turns up. Where will it park? It will park in the middle of the beach, to capture as many customers as possible. Now a second ice cream van turns up, where will it park? Strange as it may seem, the best place to park will be right alongside the first van. That way each van gets half the available customers. If the second van parked further to either left or right of the first van, opening up space between it and the first van, then they would share the customers in the gap, whilst the first van still had all the customers on the other side. So with two vans, they both try and take the middle ground. If a third van turns up the situation becomes completely unstable.

How weird is it that with the Liberal Democratic Party having been virtually wiped out at the last election, the Labour Party should have decided to completely abandon the centre ground and march off into the loony left, long grass? David Cameron must think it’s Christmas. One van’s broken down and  another van has parked at the extreme left end of the beach. Cameron can choose his spot as far away from UKIP as he dares and take perhaps three quarters of the beach.

Mark Carney, Climate Change and Garden Ponds


Mark Carney, Governor of the Bank of England has warned that global warming could become one of the biggest risks to economic stability. We’ve heard it before and I’m not a climate change denier. The evidence of human induced global warming is there.

But I wonder what impact technological change will have. The year before last we put a small pond in our garden. My wife bought a solar powered aerator which keeps the pond healthy I’m told. It seemed to work quite well, emitting a small stream of bubbles when the sun shone. This year it failed and a new one was purchased. It’s the same size panel as last year’s model but it’s more like a soda fountain. It only calms down to the rate of its predecessor when the sun goes behind a cloud. Solar panel efficiency is really accelerating. Electric vehicles are getting better all the time, and when I change my car next time, I’m pretty sure it will be a plug-in hybrid. In my book Project Sponsorship I cite technological change as one of the key drivers of change and use music as an example. 78’s dominated for around 60 years, but were rendered obsolete by vinyl records. They lasted 20 years alongside cassette and cartridge tape formats before the CD took over. Now I have my entire music collection and my photo collection on my phone, and haven’t bought a CD for probably 10 years.

Maybe I’m just a glass half full man, but I’m keeping my fingers crossed that the human race’s technological prowess, that accelerated CO2 emissions in the first place, will bring it under control faster than we thought.

Project Sponsorship on GpmFirst


Now you can dip into Project Sponsorship and many other project management books on GPMFirst. Click here

GpmFirst is Gower’s new online platform providing access to our full library of 120+ (fully searchable) project management books – as well as a rigorously moderated, expert CoP featuring author extras, articles, templates, checklists, slides, training tools, models, videos, podcasts, workshops and facilitated discussions – designed to be accessible online and via smartphone.

The Union Flag


I've just read a tweet by Oxford Dictionaries @OxfordWords called Jack and the Flagpole: What do we call the British national flag? As an Oxford man I always defer to the OED on all points of English, however on this subject I believe there is a higher authority, the Admiralty Manual of Seamanship Volume 1.

Colours

This is a general term describing any flag which is flown to denote the nationality of a ship or a body of people, or of a place. Examples of colours are the ensign and jack worn by ships. Note that colours are said to be worn by ships, other types of flag are flown, never worn.

Jacks

Jack is the name given to the colours worn on a staff at the stem or on the bowsprit by ships or vessels in harbour, at anchor, moored to a buoy or alongside. It is a smaller flag than the ensign and can be square or rectangular in shape.

Ships of the Royal Navy wear the Union Flag. There is a historical reason for allocating the Union Flag as a jack to ships of the Royal Navy. In the days when a man-of-war and a merchant vessel looked very alike and both wore the same ensign , it was essential that one should be distinguished from the other, and so the Union Flag was ordered to be worn only by HM ships of war.

Very simple then. Our national flag is the Union Flag. This is also the Union Jack when worn by one of Her Majesty's ships.

 

Corbynomics, Public vs. Private Investment and Project Sponsorship


I’ve just read a post from the BBC’s Robert Peston on Corbynomics, and in particular the probable next Labour leader’s economic policy dubbed QE for people. Peston finishes his update with the observation “Or to put it another way, quantitative easing for people makes good economic sense only if you believe that a state investment bank would make viable investments that the private sector refuses to make.”

For any project to be viable, the test is whether the benefits outweigh the costs. Because the benefits usually roll in some years after the costs are expended, it is necessary to account for the time value of money. Investors must appraise projects by their NPV (Net Present Value) calculated using their WACC (Weighted Average Cost of Capital). Private sector investors typically draw capital from shareholders and banks, equity and debt. Governments (those considered prudent anyway) can usually borrow money at lower cost than the private sector, and therefore an investment would normally be more viable as a public sector investment than a private sector one. Fifteen love to Corbyn.

Another factor to consider is the nature of the benefits. For infrastructure projects there are normally social and economic benefits to consider as well as the revenue benefits. A private sector housing developer will be interested in the profit it makes from selling houses. The public sector can also benefit from the bricklayers that it is no longer paying unemployment benefit to and the tenants it is no longer accommodating in Bed & Breakfast accommodation. Social and economic benefits also help to make projects more viable to the public than they do for the private sector.

But (and it’s a big but), governments tend to be terrible Project Sponsors. They rush into projects without clearly defining what they want, keep changing their minds, and cut funding when they have their next good idea they want to invest in instead. The National Audit Office published a report in 2009 into the performance of PFI (Private Finance Initiative) projects and found that PFI projects performed better than non PFI projects in delivery to programme, delivery to budget and quality. That’s quite a feat considering the immense cost and time of bankers, lawyers and other consultants setting these PFI projects up. However it is precisely the immense effort expended in defining exactly what is required and the clarity of contractual relationships that made these projects successful.

For more on project appraisal and project finance please refer to my book on project sponsorship.

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Project Sponsor Job Qualification


I note some interest in Project Sponsor job qualifications. Firstly a project sponsor must know his organization very well. He or she must really understand what it is trying to achieve through the project. The sponsor must be a great communicator, able to translate jargon between the organization and the project manager. The sponsor also owns the business case and is the guardian of the organization’s investment, so a good understanding of the business case and project appraisal is necessary.

Click for a table from my book detailing factors necessary in a Project Sponsor

Factors necessary in a Project Sponsor

So to add to experience within the organization I would suggest an MBA and perhaps a PRINCE2 practitioner qualification. Or you could read my book.

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