Today, the second Monday in June, would normally have been the first day of the conference I have chaired over the last 15 years, INFINITI. From a small workshop to a 200+ delegate conference it has grown over these years. As it happens we had decided to park it for the year to reassess, but it gets me thinking of why conferences happen and why they wont go away.Continue reading
Brexit , now that is is really happening, is going to cause a major strain on this country. In that context, and accepting that we don’t want to steal their boots while the body is still warm, it beehooves Ireland to take every opportunity presented to take business from the UK.
Much of the discussion on gains to be made has concentrated on the financial services area. There is a natural synergy here – a lot of back and middle office activity in London needs to move, to keep within the Eurozone, and Dublin has a fair amount of attractions to these activities. In addition, there should be some potential for agribusiness to take up now UK based activities exporting to the EU. Much of the existing cross border trade comes from the agrifoods area. While nobody wants to destabilise the North, the reality is that the days of exporting material for further processing in the north then reimporting for another stage, these are gone. Agribusiness to the UK will also take a hit – upwards of a billion euro is at stake here. However, the UK also exports a lot of agrifood to the EU – 73% of its exports go to the EU. With even the softest barriers these will decline, and that represents an an opportunity for Irish agribusiness.
To its credit the Government and the state are aware of these issues and work is ongoing to mitigate the effects.
Behind all this however we have a sector which has evidenced potential for significant post Brexit export growth where the state, far from encouraging it is in fact strangling it. This is the higher education sector. Every non –Irish student who comes to study is an export. Exports of educational services from Ireland represent a potentially enormous market. In the UK some 400k students per annum enter to study, many in the area of English language but as many for longerterm degree and diploma studies. Ireland has approximately 12,500 students from outside the EEA in its institutes of technology and universities. Some 32,500 are in areas such as English language or private colleges. This is a large body of exports. It is responsible for approx. 1.75b in value added per annum
Two strangulations exist. First, we have a dreadful reputation in the English language school area. Despite this the department of education and skills has yet to fully implement its own recommendations and to put in place a statutory framework around quality in the area. It remains essentially self regulating, and we know that that is a system which ultimately fails. Until these schools are regulated we cannot grow them in confidence.
Taking the state related bodies an even more bizzare issue hobbles these. In the financial crisis a regulation known as the Employment Control Framework was put in place on all universities and Institutes of technology. This in effect had a dual effect – it controlled overall numbers of staff and also controlled the distribution of staff (academic and professional) as between grades. The ECF, as it was known, was implemented for the 2011-2014 period. Yet, as we come towards the middle of 2017, it is still being implemented. It is being implemented due to the lack of the Department of Educatin and Skills , again, agreeing a new framework with the universities. As a consequence, universities and institutes of technology cannot grow other than by non exchequer funds. Willy nilly, in the absence of a serious commitment by the Department of Education and Skills (perhaps it should be renamed the Department of Primary and some Secondary Education) as to a stable financial system for higher education, the sector has moved decisively from state to non state funding. This is most evident in the university sector. Thus my own institution, TCD, in 2015-6 , obtained 138m from the state ( HEA block grant, free fees waivers and state research funds awarded) , 38% of total income . TCD is probably on track to have 25-30% of its income from the state in the medium term, based on the trajectory of the last number of years. UCD in 2015 obtained just over 30% of its income from the state. Over the last decade state funding has declined by 25% while numbes of students have gone up by 25%. But the state remains , via the HEA, which provides less then 15% of income, the arbiter of not just staff numbers but staff deployment.
This strangles any opportunity post Brexit to grow. More students need more resources, and dismay some as it might, higher education is a environment where staff, costly staff, are needed. But if staff cannot be hired, then the system cannot grow. Exports are choked off. This makes no sense.
Published as a column in the Irish examiner
What do Trinity Business School researchers do? Come along on Friday and see. For FREE!
Economics can be useful. By this I dont mean the quasi’mathematical faffing about that some , including practitioners, think of as economics. Nor do I mean forecasting, something economists are both poor at and addicted to doing. I mean the way of thinking, the juxtaposing of scarce resources versus unlimited desires. In higher education this last while we see how useful it might be.
Generally, if something seems too good to be true then it probably is- Hence my concern with the new online honours digital degree thing offered by the Digital Skills Academy. Continue reading
A couple of weeks ago the NYSE, the largest and perhaps the most influential stock exchange in the world, was closed for a few hours. And nothing happened. The global economy went chugging along without a problem. Perhaps the time has come to consider whether we need to have trades taking place in time intervals measurable only by CERN and comprehendible only by Dr Who.
A further , related issue is that when we think of the stock exchange we are not thinking of the whole market by any means. Just as in other areas stock traders are increasingly resorting to trade in what are called ‘dark pools’, trading centers outside stock exchange rules and regulations. Some studies put the volume of stock traded on these in excess of 40%. The ultra high frequency trading game, characterised by some as an arms race, may exceed 30% of all trades made on exchanges.
While the consensus of research is that there are undoubtedly private, individual gains to be made from shaving a nanosecond here and a millisecond there in executing share trading, the consensus is also that the social benefit is very hard to find if it exists at all. To some extent high frequency trading does increase liquidity of stock transactions, and increases pricing efficiency measures. However, a question that can be legitimately asked is whether or not this matters. Economically, if we are spending hundreds of millions on something that doesn’t yield an overall economic or social benefit then it is wasted expenditure.
Some research suggests that this high speed game is exactly that- wasted. There is some evidence that high frequency trading is associated with increased quote stuffing (submission of lots of offsetting orders to increase congestion and thus advantage the first mover) and increased volatility. There are, in economic terms, externalities with respect to high frequency trading.
Given all this, it may be time to consider slowing down the pace of financial trading? If there is little social benefit, and if the economic benefits are unclear, and I have we got ourselves into this “arms race”. A number of proposals, and analysis, have emerged over the last couple of months which address the extent of which financial trading could be slowed down without any loss of liquidity, and a proposed new methodologies and approaches to ensure that financial training can continue. In essence the proposals are that instead of trade is being processed as they arrive, but on the problems noted above, that they be processed perhaps once per second. Trades would still be executed in the order in which they arrived, so there will still be a significant incentive for companies to invest in high speed trade positioning. But the actual trades themselves would only be executed once per second. That’s still nearly 25,000 opportunities to trade per day.
It is unclear as to whether or not this is possible; it would require coordinated regulatory change on a global basis. Just as a financial transactions tax, a great idea in principle, founders on the rock that so long as one major player opts out then a world where there is a financial transactions tax will see trade is moving towards the area where there is no, so too in an environment where ultra high-speed trading is slow down it requires all major players to agree. Now the Greeks are down a game theoretic finance Minister perhaps he might be available to design the regulatory coordination mechanism…
This is an extended version of an Irish Examiner column
Greek myth, which is in case you missed it full of tragedies, is the cultural mine that keeps on yielding for the present crisis.
So, I am, along with some colleagues, interested in taking on some postdoc fellows under the Marie Curie programme.
One would be on a project on the the global determinants of metal and other critical mineral production. The main thrust is to examine the relationship between mineral production costs and mineral prices, investigating which leads which and in what regard.
The second is to address the matter of higher education institutions within the framework of local regional development objectives of maximizing employment, output and FDI investment potential as part of a suite of supply-side policies. The aim is for the candidate to work towards an analysis of the local Irish context and subsequently aim to make a series of comparisons with other similar regions of the European Union.
Candidates should have a phd in economics, with ag/resource economics a boon for the first and economic geography/regional studies for the second.
If you are possibly interested, let me know by email, with a compresensive CV, letter of interest, and a sample of recent research.
The greek mess shows how debased the whole Euro project has become. Its time to think the previously unthinkable and consider how to unscramble the eggs. Its time to think about how to back out from the Euro.