The winemaker who battles temperatures as low as -25C

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Media captionHow the wines of Canadian winemaker Norman Hardie are winning fans around the world.

With winter temperatures regularly dipping below -25C at his vineyard, winemaker Norman Hardie definitely didn’t choose an easy place to grow his grapes.

“Minus 25 is the absolute death knell for vitis vinifera [the common grape vine], we actually have to bury our vines in the winter [to protect them]. It’s a huge job,” says the 51-year-old.

“And then we can get snap spring frosts that can quickly ruin a crop. We lost more than 80% in 2015.”

While most of us associate winemaking with warm countries, Mr Hardie has since 2004 been making wine in… Canada.

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Johnny C Y Lam

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Norman Hardie Winery is currently continuing with its 2017 harvest

Based in picturesque Prince Edward County, Ontario, a two-hour drive east of Toronto alongside Lake Ontario, the summers are more often glorious.

The winters, on the other hand, are harsh, which means that the team at Norman Hardie Winery face a race against the cold weather every November.

“I have 80,000 plants today, so that is almost a quarter of a million canes [the vine’s branches] that we have to tie down by hand, and then cover with a mound of earth,” says Norman.

“Before we then carefully open up and untie in the spring.”

If that wasn’t labour intensive enough, come April and May Norman and his team have to light fires and position wind turbines to try to drive away late frosts. But sometimes, such as in 2015, they just aren’t that successful.

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Johnny C Y Lam

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Norman Hardie says that Canada’s cool weather helps him to make excellent wine

Up against such challenges, you might question why Norman ever chose to plant vineyards and build a winery in Ontario. He says that despite the challenges, the combination of cool weather and the clay and limestone soil of Prince Edward County allow him to make world class wines.

“The great wines are always made on the edge, and we’re certainly on the edge,” says South African-born Norman, who prior to going into winemaking had been a sommelier (wine waiter) in Toronto.

“I’d rather be here than anywhere else in the world because the flavours we get out of these soils are unique.”

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Norman Hardie Winery

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While many wine regions around the world have cold winters, they aren’t as cold as Canada’s

Primarily making white wines from chardonnay and red wines from pinot noir, Norman Hardie’s wines now have a cult following in Canada, and are even said to be the favourite tipples of Canadian Prime Minster Justin Trudeau.

But from day one, Norman – who studied winemaking in Burgundy, Oregon, California, South Africa, and New Zealand prior to establishing his own winery – wanted his wines to be sold internationally.

This brought his next big challenge – how to persuade a sceptical world to take Canadian wine seriously, when even Norman admits that 30 years ago the country made “terrible wine”.

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Canadian wine production remains a drop in the global ocean

Norman’s solution was to turn himself into a travelling salesman, and build up his wine’s global reputation “one top sommelier one top buyer, and one top wine journalist, at a time… flying around the world, pounding the pavement, speaking to people, changing people’s ideas about Canada”.

So attending wine fairs, visiting wine importers, and knocking on the doors of Michelin-star restaurants, he started to slowly build up export orders.

This is the first feature of a new 20-week series called Connected Commerce, which highlights companies around the world that are successfully exporting, and trading beyond their home market.

Focusing particularly on the UK and New York, Norman says his personal, face-to-face approach enabled him to let some of the most influential people in the global wine world “understand what we’re doing, why we’re doing it, and how we are doing it”.

He adds: “You can only do that with face time, and once you have them they are your evangelists.”

From selling 6,000 bottles in 2004, Norman Hardy Winery produced 240,000 in 2016. From that 6,804 bottles were exported across eight countries – China, Denmark, Japan, New Zealand, Sweden, Taiwan, the UK, and the US.

And he still is regularly overseas promoting his wines, including spending five to six days every year in the UK.

Back at the winery, there are now six year-round employees, rising to 50 in the busy summer months and at harvest time in late September and October. The business now has annual revenues of 4.1m Canadian dollars ($3.3m; £2.5m).

John Downes, a London-based wine expert, who has the top master of wine qualification, says that Norman was right to recognise the fact that as Canada is such a little known wine region he had to do a lot of marketing work to “stand out” on the global stage.

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Prince Edward County is now home to 40 wineries

Mr Downes adds: “A lot of people in wine don’t tell stories, they say ‘here’s my wine what do you think about it?’.

“But they don’t tell the story behind the wine, and that gives the picture of the wine to the consumer. Norman does that very well.”

While exporting wine is not without its challenges, such as the need to produce different labels for each country, Norman says that building up a vibrant export business has also boosted his sales in Canada.

Now preparing to bury the vines for another winter, Norman says: “That credibility, that international credibility, says you’re doing something right.”

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The human cost of China’s economic reforms

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Luo Yanli is worried about the bad smell from the electric car factory over the road and what the fumes might be doing to her baby and toddler.

Mr Yu is worried that millions of workers the Chinese government plans to lay off from failing state owned companies will be “abandoned” like he says he was 15 years ago.

Mark Weinberger is worried about China’s mountain of national debt, the possibility of bankruptcies and – ultimately – what it might mean for the thousands his multinational firm employs in China.

All three tell me they support reforms to overhaul China’s mammoth economy; but their stories, from three very different parts of China, reveal the consequences and anxieties associated with the changes.

Health fears

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Media captionWhat has China’s president achieved so far?

The early autumn nights are still warm and humid in Shenzhen where Yanli lives in the south of China. But she doesn’t open the windows in her apartment because of the strong smell from the sprawling BYD electric car factory.

“Before we bought the apartment the developer told us the plant would move elsewhere” she says. “After we moved here little seems to have changed.”

The factory was inspected last year after protests. Airtight seals were installed to contain the fumes. When we visited locals told us some production had been moved to another site.

With her baby boy on her lap and her daughter playing with a plastic fork beside her, Yanli says: “The smell is very strong and it has severely affected out lives”.

They don’t know if it’s dangerous but, like most of their neighbours, they have plants in their apartment in the hope they’ll absorb the smell seeping in.

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Luo Yanli has concerns about fumes from a local factory

The complex is home to the world’s biggest manufacturer of electric cars. BYD is a global leader in a technology that China hopes it can dominate; electric vehicles, and specifically the batteries that power them.

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The big push towards electric isn’t just about industrial strategy, it’s about trying to tackle China’s immense pollution problems – the most obvious of which is dirty air.

With incentives for infrastructure and aggressive quota demands for, mostly foreign, manufacturers, this is part and parcel of Beijing’s effort to make China’s economy less focused on government investment and cheap exports – and instead to one that is technologically advanced, with a sustainable base and driven by consumer spending.

So is a bad smell and worries about fumes a price worth paying for this progress, I ask Yanli? Yes it is, she intimates. The windows are firmly shut, though.

Survival of the fittest

Almost 3,000km (1,800 miles) away in Shenyang, taxi driver Mr Yu points to where the lead smelting plant used to stand, where he worked. It’s long gone, replaced by car dealerships and apartment blocks. You can buy a Cadillac where he used to walk through the now demolished main gate.

It’s 15 years since he was laid off in the wave of liberalising economic reforms with compensation of just over a year’s salary – about $5,000 (£3,700).

Despite the years he gets visibly emotional when I ask if there’s any part of the city that’s still recognisable from his time as a steel worker.

He says he was “abandoned” by the government. There was no training for a new job, no support aside from the pay-off. But two children and a taxi licence later he’s a believer in reforms that bring competition to the market place.

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Mr Yu was laid off from his job as a worker and now drives a taxi

“I think the rule ‘survival of the fittest’ should apply”, he says as we drive around, “baggage should be cast aside” he adds. But there is also this, “isn’t it true that the people should be properly settled?”

They know a lot about “settling” workers in Shenyang. It’s the capital city in China’s weakest performing province.

Liaoning was once the manufacturing heartland. Now it’s trying to rescue the towns and cities around the coal mines and steel plants that help make up this country’s “rust belt” and is about to get its first privately owned bank, called the “revitalisation” bank.

Away from car dealerships and the mega malls we go to Linsheng on Shenyang’s outskirts. Food and rubbish is dumped in piles on its main street. One ground floor apartment in a housing estate has a home-made pigeon coop in a bay window. Parts of the building are decaying. It’s home for the workers at the nearby coal mine.

As China tries to tackle chronic over-capacity in its traditional industries it’s also moving away from dirty coal to heat homes and power its economy. Many mines are being mothballed.

A bus driver outside Linsheng’s pink-painted community hospital tells me he used to do 17 trips to the mine every day, now it’s just seven. “A lot of people have retired but the company is not able to hire new employees – nobody wants to come because the salary is low.”

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A construction site in Shenyang, the capital of China’s weakest performing economic province

As the sun goes down a woman who runs a fruit stall says her business had taken a 30% hit in the last two years, which she puts down to workers’ salaries falling.

The market boss claims people are buying pork and making it last for two or three days instead of buying daily. A retired miner, who like most of the people we talk to in Linsheng doesn’t want to go in front of a microphone, says income for some is down 50%.

Still growing

So what of taxi driver Mr Yu’s call for “survival of the fittest”? President Xi Jinping shows little sign of going that far. It looks like his government’s early pledge to enhance market forces – giving them a “decisive role” has remained just that, a pledge.

Thousands of factories have been closed but that’s as much about their polluting effect than their productive inefficiency.

There have been consolidations in various sectors of the myriad state-owned enterprises. The (almost all state-owned) banks have come in with debt for equity deals – something close to a bail out – for the most troubled companies.

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But there hasn’t been a wave of bankruptcies. Preserving social stability is likely to be the main reason for this. A wave of concentrated unemployment could see protests that could threaten order.

Indeed 2016 actually saw increased cheap credit and a boost in government spending. Rather than an assault on inefficient state-owned entities, many going, only with increased – and cheaper – debt.

Still, the world’s second largest economy continues to grow, at rates many in the developed world would envy; 6.7% last year, but the rate of growth is slowing, a plateau is approaching.

Debt bubble?

Debt and risk are the two things that some think will combine to produce an economic catastrophe in China – but not Mark Weinberger, the CEO of EY, one of the big four accountancy firms.

“I don’t see an impending catastrophe,” he says, when we met in Shanghai: “The growth is still there to be able to pay off debt”.

Such optimism is perhaps not surprising from a man who advises the mayor of China’s second city. But Mr Weinberger warns nobody should be complacent: “When the debt gets so large it crowds out growth because of the cost of that debt – that becomes a problem”.

And China’s debt is huge; it is currently about 260% of annual economic output and is predicted to rise. What makes it particularly worrisome is that the bulk of this is held by state-owned corporate entities.

Risky practice has been growing too, particularly around the so called “shadow banking” sector. So much so that Beijing cracked down on the insurance market in particular, and went after some of China’s best known private firms who were deemed too risky in the way they raised money.

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EY chief executive Mark Weinberger says he doesn’t see “an impending catastrophe”

Firms who owned or had stakes in New York’s Waldorf Astoria, Deutsche Bank, Club Med and Wolves FC were all targeted. It’s steadied the boat, but that appears all.

Other far more significant reforms have not yet happened; financial market reforms, substantial rural land reform, changes to the internal passport-like hukou welfare system.

One thing that is happening though is a deepening of the role of “the party” at the top of China’s state firms. There were reports this summer that foreign owned firms or joint ventures have been asked to give the Communist Party equal say over their major corporate decisions.

Xi Jinping faces a multitude of challenges in his country’s economy as he embarks on his second term at the top. Strengthening the party’s hold on the means of production is one of Beijing’s responses.

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From sweets to furniture: The secrets of selling online

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Geoff Pugh

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Lavinia Davolio says selling her luxury sweets on Amazon Marketplace has been good for business

What are the best ways to sell online? And how do you make sure you have a website that really works? Part one in our eight-part series exploring all things e-commerce.

Lavinia Davolio makes luxury handmade sweets inspired by her Italian heritage. She says her business received a boost when she opened a store on Amazon’s Marketplace.

“It’s easy for clients to discover something unique and handmade if it’s available through such a trusted online platform,” she says.

“And it means we can offer convenient next day delivery at a competitive price and give our boutique confectionary an incredible reach and visibility.”

Lavinia is one of thousands of small businesses who’ve decided to set up shop on an e-commerce marketplace – Amazon, eBay, Etsy, Alibaba’s Taobao, Rakuten to name some of the largest – rather than go through the hassles of setting up their own websites.

Amazon charges retailers a 15% commission, but in return even the very smallest entrepreneurs can get a slice of the retail titan’s global pulling power just by uploading images and descriptions of their products and then setting their pricing.

For an additional fee, Amazon will store and dispatch your goods – the kind of one-stop convenience that is ideal for newbies, suggests Alan Braithwaite, a visiting professor at Cranfield School of Management.

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Media captionDespite the convenience of online shopping, people still love the physical store

“Something like Amazon Marketplace is a no-brainer,” he says. “Entry costs are very low and straightaway you have a very wide marketplace at your fingertips.

“When you’re starting out with your own website you’re having to attract the traffic, which means a lot of search engine optimisation [SEO]. This can be complicated and mean extra costs if you need outside help.”

Some e-tailers want more creative control over their online shops, however – and to keep more of the sales income for themselves.

Going it alone is certainly a lot cheaper than it used to be, but according to payment processor WorldPay, the average small business spends £2,500 on setting up an e-commerce platform.

At its most basic this will cover product display and listing, navigation structure, a shopping cart facility, search features and secure payment gateways – a checklist that swells with business growth.

DIY website providers such as Wix, Weebly and SquareSpace, help the technical novice with design templates and SEO support from as little as $4.50 (£3.40) a month.

And these days, off-the-shelf “software-as-a-service” add-ons can give a basic website selling and fulfilment functionality that “means you can be online and trading for as little as £500,” says Prof Braithwaite.

But “cheap isn’t always best,” he warns. “It’s your front window so it can be worth spending a bit extra – around £5,000 on a developer.”

And Clare Jackson, founder of e-tailer The Wooden Furniture Store, points out that you have to be prepared to improve and adapt your website constantly or risk losing sales. You can’t pay your set-up fee then sit back and relax.

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The Wooden Furniture Store

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Clare Jackson says she had to adapt her website’s content for mobile screens

When they discovered that most customers were coming to their website from mobiles, they had to completely rethink the design.

“With mobile users likely to be on slower connections it’s crucial to get more speed into the user experience, so we introduced image optimisation and a content delivery network.

“This adapts content to the sizes of screen and devices being used, meaning that the images load much quicker.”

A fast website loading speed is crucial for e-commerce success.

Research by application performance company, Apica, finds that 40% of online shoppers refuse to wait more than 10 seconds for a website to respond.

The website change cost just $200 but has contributed to a 500% hike in sales from mobile and a 230% upturn in mobile visitors, says Ms Jackson.

“As a small business, we combine our agility with the kind of technologies which just a few years ago would have been unaffordable for someone our size,” she says.

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Iffley Road

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Wife-and-husband team Claire Kent and Bill Byrne moved their running wear business to Shopify

Claire Kent and Bill Byrne, the husband-and-wife team behind luxury running wear, Iffley Road, found that replacing their bespoke website with the “easy and intuitive” e-commerce platform, Shopify, made a big difference to their online business.

They liked the fact that they were no longer reliant on a third party but could make changes to the site themselves in minutes.

Ms Kent, a former Morgan Stanley equity analyst who had never used Facebook or Twitter before, and who admits to being “completely untechnical”, says she has found analysing customer data surprisingly straightforward using Shopify.

A range of tools gives her data on purchase frequency, customer lifetime value, gross margins and net profit – insights she credits with doubling sales.

“It’s like I’ve suddenly got glasses on whereas before I was blind,” she says. “I’d say to anyone that you really need to be looking at analytics every day as you learn so much.”

More Technology of Business

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She advises retailers to accept that a website will need to evolve with customers’ changing expectations.

“Many SMEs prioritise aesthetics over function; you can have a site that looks amazing but if you don’t have the right platform then it just isn’t going to deliver.”

Listening to feedback and acting on it is also crucial, argues Prof Braithwaite.

“Get friends and families to transact on [your website] and listen to feedback, making sure that payment is secure and seamless is an absolute priority; customers won’t come back if this isn’t right.”

“Fail fast, fail often” may be the mantra amongst the technology giants in Silicon Valley, but it is also apt for online retail entrepreneurs. You have to make mistakes, learn from them, and adapt quickly to achieve success in this global online marketplace.

The next feature will look at the best way to take payments and market your online shop.

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Can these beads stop ‘history’s biggest mass poisoning’?

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Media captionA handful of these resin beads can save lives

The beads of resin may not look like much but they could save hundreds of thousands of at-risk people in Bangladesh and parts of India.

Human Rights Watch says up to 20 million people are at risk from arsenic poisoning in Bangladesh.

Millions have already suffered from what the World Health Organisation calls “the biggest mass poisoning in human history”.

Millions of “tube-wells” have been dug across Bangladesh since the 1940s. The simple pumps were rolled out across the country by the government and NGOs from the 1970s onwards as a way of delivering cost-effective bacteria-free water.

However during the 1980s cases of arsenic poisoning began to emerge.

Arsenic can not be seen or smelt; the first signs of its impact are skin lesions which only emerge once the poisoning has taken place.

The poisoning can set off a range of heart diseases and cancer and the external symptoms look a lot like leprosy, which can lead to victims and their families being shunned by the local community.

A heavy price

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Siaton Nessa says arsenic poisoning has ruined her life and affected her family as well

Siaton Nessa Meherpur has lesions on her skin from arsenic poisoning. She’s in her mid-50s and she says the disease has blighted her entire family.

“Because of this well my whole skin is filled with black patches,” she says.

“I am worried about my children because no one is prepared to marry them.”

While the government has made efforts to replace the wells, in many rural areas they are still the primary source of water especially as many families have dug their own tube wells.

Human Rights Watch estimate 43,000 people die each year in Bangladesh from illnesses caused by arsenic poisoning.

New solutions

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Minhaj Chowdhury’s Drinkwell is offering an “entrepreneurial solution” to the water crisis

Minhaj Chowdhury, 28, was raised in the United States but visited family in Bangladesh during school holidays.

“It shocked and deeply saddened me to think how we never had to worry about water being fatal in the US but here in Bangladesh one in every five deaths was associated with unsafe drinking water,” Mr Chowdhury says.

After his grandfather died due to a disease linked to water he decided to take action.

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The BBC’s Innovators series reveals innovative solutions to major challenges across South Asia.

Ever heard of the concept of “jugaad”? It’s a Hindi term meaning cheap innovation.

If you have created a life hack or innovation that you are proud of, or spotted one while out and about on your travels, then share your picture with us by emailing [email protected], use the hashtags #Jugaad and #BBCInnovators and share your picture with @BBCWorldService, or upload your submission here.

Learn more about BBC Innovators.

In 2013 he founded Drinkwell, in partnership with Dr Arup K SenGupta who invented a particular type of resin technology and had already been active in implementing it in India.

The resin removes arsenic and other harmful substances from water and once it has been used Drinkwell filters the water through a series of other tanks to take out other harmful substances.

The water is sold locally by “Drinkwell” entrepreneurs and the money raised is used to maintain the system.

The pricing is set depending on location but a monthly subscription costs anywhere between $0.05 (4p) and $0.12 for 20 litres (4.4 gallons) a day.

Entrepreneurial opportunity

According to the United Nations, 30% to 50% of all water projects fail after huge investments because of a failure to maintain the facilities.

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Drinkwell entrepreneur Habibur Rehman’s plant in Manikganj, Bangladesh sells 150,000 litres a day

Dr Khairul Islam, the country director for the charity Water Aid in Bangladesh’ believes that social entrepreneurs have a role to play in tackling the arsenic poisoning.

Dr Islam told the BBC that the main problem so far has been operation and maintenance.

Because Drinkwell includes operational and maintenance costs at the centre of its model he says it is the kind of model “this country needs”.

The first Drinkwell plant began dispensing water in the Manikganj district in 2015. Today that one plant alone has 750 daily customers and dispenses 150,000 litres a day.

The network has grown across the country, often by going into schools to deliver safe drinking water for students’ meals, from there the word spreads across communities.

There are now 30 Drinkwell filtration plants in India and Bangladesh serving more than 100,000 people.

Mr Chowdhury believes this is just the start for Drinkwell. He hopes to eventually reach hundreds of millions of people across Asia.

He is already talking to the Bangladesh government about rolling out the technology across the country.

By involving the communities in the maintenance through their entrepreneur network Mr Chowdhury believes the system can provide clean water “forever”.

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The ‘working class boy’ who built a £1bn business

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Mr Davdra’s wife recently treated him to a new Harley Davidson

Paresh Davdra is thrilled about the brand new Harley Davidson waiting for him in a friend’s garage.

It’s not a sign of a mid-life crisis, he insists, but a wedding present from his wife who he married in August.

He just has one more test to pass to get his motorcycle licence, then he can hop on the bike and whizz around London for meetings.

The boss and co-founder of money exchange firm Rational FX, which reported revenues of more than £1bn ($1.3bn) last year, has a life that’s worlds apart from his parents and grandparents.

They were forced to flee Uganda in 1972 when dictator Idi Amin gave the Asian population just 90 days to leave the country.

“They came to the UK with just £50 between them,” says the softly-spoken Mr Davdra. “My grandfather had his own tailoring shop, but they had to leave everything behind.”

His family pulled together and bought a house in Harrow, north London, with his dad securing a job as clerk, and later as a financial controller, at a foreign exchange broker.

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Paresh Davdra co-founded RationalFX in 2005

Their fighting spirit rubbed off on the younger Davdra. “We were never really given anything – if I wanted something, I had to earn it.”

From the age of 16, he spent the school holidays holding jobs in a mobile phone shop and in telesales, while out of term at Middlesex University, he worked at his dad’s firm, taking up roles from filing to working in compliance.

He studied marketing and computer science at university, but tells me that technology does not come naturally to him.

“If you told my team I had this degree, they wouldn’t believe you. I’m always the one calling IT to connect the laptop to the printer,” he laughs.

As soon as Mr Davdra graduated, in 2003, he joined his dad’s company as a foreign exchange dealer, helping clients to buy and sell large quantities of foreign currencies.

He was in the role for just over a year, working with Indian-born Rajesh Agrawal, a friend of his father’s who had arrived in the UK in 2001. But two factors would spur him to quit.

“I’d tried to buy a property with my dad but the bank rejected the mortgage application,” Mr Davdra says. “It deflated me.”

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RationalFX is based in Canary Wharf, London

At the same time, Mr Agrawal resigned from his IT manager role. “When he decided to quit, I badgered him. I asked him to tell me what he was doing,” Mr Davdra says.

The two met for coffee and quickly agreed they wanted to set up a company together. The idea was to support customers buying property abroad with their currency needs.

“Everything we were doing at the old firm was manual, but we thought we could offer the same service online,” Mr Davdra says.

However, the duo faced a serious challenge: money. Mr Davdra was only a year out of university and had already taken out a personal loan to buy a BMW.

When Mr Agrawal took their business plan to the bank and asked to borrow £10,000, he was swiftly rejected. But he returned a few days later and asked for £20,000 to buy a car.

The bank said yes.

“I then sold my BMW and we were set,” says 37-year-old Mr Davdra, who also moved into Mr Agrawal’s home to save on rent.

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Mr Davdra’s grandfather had to flee Uganda in 1972

With just £32,000 between them, the pair launched their foreign exchange brokerage, RationalFX, in 2005.

Like many start-ups, the next difficult task was signing up customers.

“We got on the phones and started pitching to estate agents and attended every property industry event there was,” recalls Mr Davdra.

“We’d be in the office all day from 8am, then we’d just be at it in the evenings.”

Their big breakthrough came when they signed a number of estate agents who were selling properties in Dubai.

However, just two years after launching, the financial crisis hit. Mr Davdra reflects candidly on how it changed his young mindset.

More The Boss features, which every week profile a different business leader from around the world:

“I was 27 at the time and the business was doing great guns, and I was well on my way to being rich. That’s all I thought about it.

“It wasn’t really about building a business – that comes with time and maturity. But the crash brought that along. It was a good learning curve.”

Rational FX also felt the fall-out from the crash, with its growth slowing. But it weathered the storm and went on to diversify.

Today, its clients range from high-net worth individuals, either buying property or making investments, to medium-sized businesses, such as firms exporting cars or importing textiles.

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RationalFX employs 110 people

It reported revenues of £1.3bn in 2016, up from £1.1bn the year before, and pre-tax profits of £2.3m – largely because the firm reinvested heavily in its business, Mr Davdra says.

After enjoying success with Rational FX, the founders had an idea for an offshoot company – an online money transfer platform aimed at individuals sending lower sums to family overseas.

“We felt that Rational FX was driving revenues, but Xendpay [the new company] was more of a social initiative, to try and bring the costs of remittance down for people working hard to bring their families out of poverty.”

Xendpay has a “pay what you want” model, although it does suggest a minimum commission of 0.3-0.4% of the transaction.

Mr Davdra says that more than 70% of users pay the suggested fee, 10% hand over more, and the rest pay nothing.

The platform isn’t profitable yet, although Mr Davdra expects it to break even next year. “It was a bit of gamble but a risk we were willing to take.”

‘Still growing’

Last year Mr Agrawal stepped down from the firm after he was appointed Deputy Mayor of London for Business. He still owns 70% of the business, and is a non-executive director, while Mr Davdra holds the remaining shares.

Mr Davdra says he “misses him”.

“Apart from business, over the last 12 years we have developed a good relationship. He’s a very very close friend.”

For now, there are no plans to sell RationalFX, although private equity firms approach the firm “an average of twice a day”.

“Our brands are still growing and are quite young. It’s all about the right opportunity,” Mr Davdra says.

Headquartered at Canary Wharf, RationalFX and Xendpay together employ 110 members of staff.

Despite his penchant for expensive bikes and cars, Mr Davdra – who still lives in Harrow – has his feet firmly on the ground.

“I think we’re pretty humble. We’re working class, and we just do normal stuff. It’s the way we’ve been brought up.”

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How the humble S-bend made modern toilets possible

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“Gentility of speech is at an end,” thundered an editorial in London’s City Press, in 1858. “It stinks!”

The stink in question was partly metaphorical: politicians were failing to tackle an obvious problem.

As its population grew, London’s system for disposing of human waste became woefully inadequate. To relieve pressure on cess pits – which were prone to leaking, overflowing, and belching explosive methane – the authorities had instead started encouraging sewage into gullies.

However, this created a different issue: the gullies were originally intended for only rainwater, and emptied directly into the River Thames.

That was the literal stink – the Thames became an open sewer.

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Cholera was rife. One outbreak killed 14,000 Londoners – nearly one in every 100.

Civil engineer Joseph Bazalgette drew up plans for new, closed sewers to pump the waste far from the city. It was this project that politicians came under pressure to approve.

The sweltering-hot summer of 1858 had made London’s malodorous river impossible to politely ignore, or to discuss obliquely with “gentility of speech”. The heatwave became popularly known as the “Great Stink”.

Unlikely figure

If you live in a city with modern sanitation, it’s hard to imagine daily life being permeated with the suffocating stench of human excrement.

For that, we have a number of people to thank – but perhaps none more so than the unlikely figure of Alexander Cumming.

50 Things That Made the Modern Economy highlights the inventions, ideas and innovations that helped create the economic world.

It is broadcast on the BBC World Service. You can find more information about the programme’s sources and listen online or subscribe to the programme podcast.

A watchmaker in London a century before the Great Stink, Cumming won renown for his mastery of intricate mechanics.

King George III commissioned him to make an elaborate instrument for recording atmospheric pressure, and he pioneered the microtome, a device for cutting ultra-fine slivers of wood for microscopic analysis.

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Alexander Cumming’s S-bend was crucial in the development of the flushing toilet

But Cumming’s world-changing invention owed nothing to precision engineering. It was a bit of pipe with a curve in it.

In 1775, Cumming patented the S-bend. This became the missing ingredient to create the flushing toilet – and, with it, public sanitation as we know it.


Flushing toilets had previously foundered on the problem of smell: the pipe that connects the toilet to the sewer, allowing urine and faeces to be flushed away, will also also let sewer odours waft back up – unless you can create some kind of airtight seal.

Cumming’s solution was simplicity itself: bend the pipe. Water settles in the dip, stopping smells coming up; flushing the toilet replenishes the water.

While we’ve moved on alphabetically from the S-bend to the U-bend, flushing toilets still deploy the same insight.

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Rollout, however, came slowly: by 1851, flushing toilets remained novel enough in London to cause mass excitement when introduced at the Great Exhibition in Crystal Palace.

Use of the facilities cost one penny, giving the English language one of its enduring euphemisms for emptying one’s bladder, “to spend a penny”.

Hundreds of thousands of Londoners queued for the opportunity to relieve themselves while marvelling at the miracles of modern plumbing.

If the Great Exhibition gave Londoners a vision of how public sanitation could be – clean, and smell-free – no doubt that added to the weight of popular discontent as politicians dragged their heels over finding the funds for Joseph Bazalgette’s planned sewers.

More than 170 years later, about two-thirds of the world’s people have access to what’s called “improved sanitation”, according to the World Health Organization, up from about a quarter in 1980.

That’s a big step forward.

Economic cost

But that still means two and a half billion people don’t have access to it, and “improved sanitation” itself is a relatively low bar.

It “hygienically separates human excreta from human contact”, but it doesn’t necessarily treat the sewage itself.

Fewer than half the world’s people have access to sanitation systems that do that.

More from Tim Harford:

What the dynamo reveals about technological revolution

Battery bonanza: From frogs’ legs to mobiles and electric cars

How the lift transformed the shape of our cities

How air conditioning changed the world

The economic costs of this ongoing failure to roll out proper sanitation are many and varied, from health care for diarrhoeal diseases to foregone revenue from hygiene-conscious tourists.

The World Bank’s Economics of Sanitation Initiative has tried to tot up the price tag.

Across various African countries, for example, it reckons inadequate sanitation lops one or two percentage points off gross domestic product (GDP), in India and Bangladesh over 6%, and in Cambodia 7%.

That soon adds up.

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Open sewers are a common sight in Kibera, in Nairobi, Kenya

The challenge is that public sanitation isn’t something the market necessarily provides. Toilets cost money, but defecating in the street is free.

‘Positive externality’

If I install a toilet, I bear all the costs, while the benefits of the cleaner street are felt by everyone.

In economic parlance, that’s a “positive externality” – and goods that have positive externalities tend to be bought at a slower pace than society, as a whole, would prefer.

The most striking example is the “flying toilet” system of Kibera, in Nairobi, Kenya.

The flying toilet works like this: you defecate into a plastic bag, and then in the middle of the night, whirl the bag around your head and hurl it as far away as possible.

Replacing a flying toilet with a flushing toilet provides benefits to the toilet owner – but you can bet that the neighbours would appreciate it, too.

Contrast, say, the mobile phone. That also costs money, but its benefits accrue largely to me. That’s one reason why, although the S-bend has been around for 10 times as long as the mobile phone, many more people already own a mobile phone than a flushing toilet.

If you want to buy a flushing toilet, it also helps if there’s a system of sewers to plumb it into, and creating one is a major undertaking – financially and logistically.

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Otto Herschan

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Joseph Bazalgette, standing top right, views the Northern Outfall sewer being built below the Abbey Mills pumping station in 1862

When Joseph Bazalgette finally got the cash to build London’s sewers, they took 10 years to complete and necessitated digging up 2.5 million cubic metres (88 million cubic ft) of earth.

Because of the externality problem, such a project might not appeal to private investors: it tends to require determined politicians, willing taxpayers and well-functioning municipal governments.

And those, it seems, are in short supply. According to a study published in 2011, just 6% of India’s towns and cities have succeeded in building even a partial network of sewers. The capacity for delay seems almost unlimited.

Geographical quirk

London’s lawmakers likewise procrastinated- but when they finally acted, they didn’t hang about. As Stephen Halliday recounts in his book The Great Stink of London, it took just 18 days to rush through the necessary legislation for Bazalgette’s plans. What explains this sudden, impressive alacrity?

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The Houses of Parliament, photographed in 1858, the year of the Great Stink

A quirk of geography: London’s Parliament building is located right next to the River Thames.

Officials tried to shield lawmakers from the Great Stink, soaking the curtains in chloride of lime in a bid to mask the stench.

But it was no use. Try as they might, the politicians couldn’t ignore it.

The Times described, with a note of grim satisfaction, how MPs had been seen abandoning the building’s library, “each gentleman with a handkerchief to his nose”.

If only concentrating politicians’ minds was always that easy.

Tim Harford writes the Financial Times’s Undercover Economist column. 50 Things That Made the Modern Economy is broadcast on the BBC World Service. You can find more information about the programme’s sources and listen online or subscribe to the programme podcast.

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What is happening with Japan Inc?

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Japan’s reputation for precision manufacturing is coming under more pressure

Japan has long been held up as a shining example of integrity, assured quality and reliable products.

But the deepening scandal at Kobe Steel over falsified figures could further tarnish the Made in Japan brand.

Kobe’s troubles started when it admitted last weekend to faking data about the quality, strength and durability of some of the materials it delivered to more than 200 companies including Boeing, Nissan and Toyota.

On Friday it said the number of firms involved had risen to 500. The news has wiped out about $1.8bn (£1.3bn) off Kobe Steel’s market value this week.

But with at least half a dozen major Japanese companies admitting to fraud and misconduct in as many years, questions are being raised over why this keeps happening and if there’s a systemic problem in Japan.

‘Cutting corners’

Experts say the long term slowdown in economic growth from the 1990s onwards has been a major contributing factor. It has forced Japanese firms to change their business models, and this appears to have taken its toll.

“Large corporations used to live in a stable, predictable and growing market, but things have changed and some companies may have resorted to cutting corners,” says Takuji Okubo, managing director and chief economist of Japan Macro Advisors, in Tokyo.

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Kobe Steel’s Hiroya Kawasaki apologised for the “tremendous trouble” the firm had caused

Until two decades ago, Japanese firms were focussed on growth strategies but the realisation that their economy would no longer grow as strongly anymore meant companies had to concentrate on restructuring, cost-cutting and extreme efficiency.

Speaking to the BBC, Martin Schulz, senior research fellow at Fujitsu Research Institute in Tokyo says these painful adjustments have seen some companies struggle “to adjust to the new rules of the game”.

The push to improve efficiencies made management desperate to show positive results, sometimes even testing the limits of quality control, he says.

Mr Schulz adds core-employees and managers have been stretched to the limit, which in some cases, resulted in overwork and misconduct.

But the need to open up new markets overseas to boost profits has created other problems for Japanese firms, especially at their subsidiaries abroad.

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Kobe Steel is Japan’s third largest steelmaker

Florian Kohlbacher, director of the Economist Corporate Network for North Asia, says some companies tried to grow too quickly by expanding overseas without having enough experienced managers to supervise operations.

Detecting fraud

The misconduct at Kobe Steel follows scandals at carmakers Nissan Motor and Mitsubishi Motors, as well as car airbag-maker Takata Corp, which filed for bankruptcy in June after a global recall sparked by 16 deaths and many injuries.

Just two weeks ago, Nissan Motor recalled 1.2m vehicles that had been certified by unauthorised technicians.

And the electronics giant Toshiba Corporation is still reeling from the consequences of an accounting scandal in which its profits were inflated.

Despite the prevalence of such high profile cases, experts say quality and compliance remain paramount in Japan.

But they still expect more scandals involving fraud and misconduct to be uncovered in future.

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Manufacturers of cars, trains and planes are checking if they used sub-standard Kobe Steel materials

Mr Kohlbacher says this is partly because new technology such as the internet of things and sensors have made it easier to detect wrongdoing, errors and fraud, while digitisation has helped to spread information about problems and improve transparency.

While it is still unclear how the data tampering at Kobe Steel was uncovered, “in a more transparent corporate environment, companies have to come clean on mistakes and misconduct much earlier,” says Mr Schulz.

Expect more scandals

Furthermore, more fraud and misconduct scandals are also expected to be uncovered as a result of laws to protect whistleblowers that came into effect in 2006.

The most explosive case came to light five years later when Michael Woodford, the British president of Olympus, became the most senior corporate figure in history to blow the whistle on his own company.

His revelations uncovered a $1.4bn (£880m) accounting fraud scandal in which the Japanese medical and equipment firm hid investment losses dating back to the 1990s.

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Quality control questions at Kobe Steel could further erode trust in Japanese firms

Mr Kohlbacher says more people have reported wrongdoings since the laws were enacted but it is difficult to confirm exactly how many people have been able to use the legislation to raise the alarm about wrongdoing in their companies.

And debate still rages in Japan on whether whistleblowers are adequately protected because the laws do not provide for penalties against companies that punish staff by dismissing or demoting them.

Some argue there are further safeguards from wrongdoing provided by Japan’s Consumer Affairs Agency, which opened in 2009.

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The news has wiped out about $1.8bn off Kobe Steel’s market value

It was created following several accidents caused by substandard products and a number of food poisoning scandals including a case involving Chinese dumplings.

“Any manufacturer that had a defective product would once have been dealt with by a government ministry but the Consumer Affairs Agency took over these responsibilities,” says Keith Henry from the consultancy firm Asia Strategy.

Mr Henry adds that the new reporting system focuses much more on the consumer rather than the manufacturer, with regulatory authorities willing to investigate and prosecute cases of misconduct.

Rebuilding the brand

Some people believe the unwanted spotlight on Japanese firms could actually have a positive effect.

“There seems to be wide agreement now that just focusing on costs and increasing profitability won’t be sufficient as future strategies,” says Mr Schulz.

Mr Kohlbacher says he now expects “companies to have a close look at their operations and make sure they amend any problems before they turn into something major”.

But some warn tougher penalties are needed for companies that fail to meet government standards because self-regulation does not always appear to work.

Citing the recent Dentsu case last week in which the Japanese advertising giant was only fined 500,000 yen (US$4,400; £3,321) for breaching labour regulations, Mr Okubo says “I think there’s something very wrong here.”

But rather than highlighting a systemic problem in Japan, Mr Okubo says the prevalence of misconduct cases was evidence that “corporate governance in Japan is working” because firms are reporting internal problems so that they can be dealt with.

As for companies that want to distance themselves from the fraud and misconduct, he says: “It is about time that each manufacturer stops branding itself as ‘Japanese’ and instead starts to build their own brand”.

Source : [1]

Formula One teams’ costs rocket after rules changes

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Lewis Hamilton during the Japan F1 Grand Prix

Next weekend Britain’s Lewis Hamilton could secure his fourth Formula One title at the United States Grand Prix.

His Mercedes team is a staggering 145 points ahead of arch-rivals Ferrari despite the sport introducing rules this year which aimed to put the brakes on the dominance of a single outfit. They came at a hefty cost.

The new regulations were designed to make for closer racing by increasing aerodynamic and mechanical grip through the introduction of wider tyres and wings.

According to one of the teams it has “rewritten” the rulebook and the impact is just as noticeable off track as on it.

But if some had hoped the rules might stop Mercedes from running away with the F1 championship they will have been disappointed. Ironically, they have also forced up its rivals’ costs.

Only the frontrunners have had the resources to foot the bill from their cashflow whilst one of the outfits lower down the grid even had to get a driver to cover the cost.

Research has revealed that new regulations fuelled a £167.6m increase in the F1 teams’ costs in 2016. They rose 14.5% to hit a combined £1.3bn – the highest-ever total recorded in the sport.

F1 cars are designed the year before they race so the bulk of the investment in them is paid for then, too. It means that the cost of this year’s campaign is reflected in the teams’ 2016 accounts and the final one of them was filed last week.

Eight of F1’s ten teams have to file publicly-available accounts – the only exceptions are Ferrari as its outfit is run by the car manufacturer itself, and Swiss-based Sauber where firms don’t have to release their finances.

The costs of the teams’ operating companies came to an average of £165.9m in 2016, topped by Northamptonshire-based Mercedes which spent £274.9m excluding the investment in its engines.

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F1 teams’ costs rose 14.5% to hit £1.3bn last year

It is the highest ever total recorded on the accounts of a British F1 team and even eclipses the turbocharged spending levels before the 2008 economic crash which drove Toyota and Honda out of the sport.

At the other end of the spectrum is last year’s new entrant Haas F1 which spent a third as much as the championship leaders.

Haas has managed to keep its costs down by taking advantage of a new rule allowing teams to buy in more parts than before. Haas uses a Ferrari engine with a chassis created by Italian manufacturer Dallara which also makes the cars for the F2 junior series.

Relying on suppliers reduces research and development expenditure which, along with staffing and engine costs, is one of their biggest costs – it rose across the board in 2016 as teams had to design cars to meet the new regulations.

They were introduced by F1’s governing body the Federation Internationale de l’Automobile (FIA) to address criticism that the outcome of races was clear before they started due to the dominance of Mercedes.

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Haas has kept costs down by buying in more parts than before

With Hamilton at the wheel it has won both the constructors’ and the drivers’ championship for the past three years running. This year is set to be no different but there has been a far higher price to pay.

Writing in the introduction to its accounts Mercedes’ team boss Toto Wolff notes that there has been “an increase of £27.9m in operating costs mainly due to the impact of technical regulation changes and movement in foreign exchange rates”.

The 2016 accounts for Force India, also based in Northamptonshire, give more insight into the effort required to meet the new rules.

It says that combined with the change in tyre-sizes “our traditional method of retaining 50% of the previous season’s car and updating the remaining 50% is not possible for 2017”. Over 90% of Force India’s car this year is completely new.

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Force India has helped cover its increased costs with cash from driver Nikita Mazepin

The team planned to cover its increased costs with income from an unlikely source: a driver contract signed with Russian youngster, Nikita Mazepin, “secured a cash injection ahead of significant regulation changes ahead of the 2017 season”, said Force India.

Mazepin was just 16 when he signed up last year and he has tested for the team twice since then, most recently in July after the Hungarian Grand Prix. He has ample resources to pay as his father Dmitry became a billionaire through owning the mineral fertiliser producer Uralchem.

Despite this, Force India still chalked up a net loss of £11.6m – the largest of any team in 2016.

The regulation changes even dented the bottom line of British manufacturing giant McLaren. Its went from a net £3.4m profit in 2015 to an after-tax loss of £3.2m the following year.

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For F1 teams, victory on the track is more important than making a profit

Overall the teams made a combined net loss of £2m last year. Perhaps surprisingly this is nothing new as unlike most businesses, profit is not the barometer of success in F1.

Instead teams judge their performance on racing results and tend to spend all of their income on this in a bid for victory.

Some even pump in more than they make, with additional funds usually coming from owners’ pockets or debt. The theory is that it is better to win and make no profit than make money and finish low in the standings.

Victory on track increases a team’s ability to bring in more sponsorship,, as brands are prepared to pay more to be associated with a winner.

The teams’ revenue generally comes from three sources with two providing the lion’s share. They are fuelled by F1’s huge television audience (390m viewers last year). The first key revenue source is sponsorship which comprises around a third of the teams’ revenue,

Another third comes from prize money. F1’s parent company, which is owned by American investment firm Liberty Media, pays the teams around 66% of its annual profits as prize money and it came to $985.5m (£742m) in 2016.

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Despite numerous failed attempts there are new proposals to introduce a budget cap for F1 teams

Payments from owners represent around half of the teams’ remaining revenue and the marketing benefit from the exposure on TV compensates for this investment.

If costs increase these payments often rise to compensate and last year Red Bull poured in four times more money into its flagship team. Its investment into Red Bull Racing hit £40.6m as costs surged 9.2% to £197m.

As its owner has deep pockets Red Bull Racing doesn’t need to rely on drivers who pay but income from them is the remaining source of revenue for F1 teams. They are a hallmark of teams at the bottom of the grid but their days could be numbered.

Despite numerous failed attempts F1 hasn’t given up on introducing a budget cap and recent reports suggest that Liberty Media will shortly present plans to the teams for introduction in 2021 when their current race contracts expire. But it will be the sport’s governing body, the FIA, that will ultimately decide on any changes

A limit of £114m has been suggested and this would level the playing field as the smallest teams are already below this whilst the frontrunners would have to scale back.

Although it may seem like a logical direction for the sport to go in it would make the recent boost in spending seem all the more pointless.

Source : [1]

Where are all the women in economics?

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Clara Starrsjo is a second-year economics student at Cambridge University

We hear a lot about the under-representation of women in so-called STEM fields – science, technology, engineering and maths.

But the proportion of women in economics is by some measures smaller.

In the US, only about 13% of academic economists in permanent posts are women; in the UK the proportion is only slightly better at 15.5%.

Only one woman has ever won the Nobel Prize in economics – American Elinor Ostrom in 2009.

And there wasn’t even a single woman on some of the lists floating about guessing who this year’s prize winner would be – it went to the behavioural economist Richard Thaler.

Some have argued that these figures aren’t necessarily the result of bias.

Maybe, they say, women are simply behaving rationally and choosing different disciplines that are perhaps more suited to their temperament and skills, or choosing to work in different but related fields.

But Cambridge University economics lecturer Victoria Bateman says that can’t really explain all of the gap.

“I think that that way of thinking about the problem is completely false,” says Dr Bateman, who is a fellow at Cambridge’s Gonville & Caius college.

“But I think [it] helps explain why economists have for too long hushed up this problem.

“Because if economists’ models are suggesting that sexism doesn’t exist, that it’s all a result of people’s free choices and… their personal characteristics, then you deny the fact there is a problem.”

‘Hotties’ vs ‘Wharton’

In fact, there is a growing body of research suggesting that there are some biases – overt and subconscious – that might be contributing to the lack of women in academic economic departments.

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The proportion of women choosing to study economics at the undergraduate level in the UK has declined over the last decade.

A study published by University of California, Berkeley’s Alice Wu made waves earlier this year.

Using natural language processing, Wu analyzed over one million posts on a website called, which is a sort of online forum where academic economists discuss job openings and candidates.

Like many places on the internet, the conversations aren’t particularly pretty or politically correct.

Wu found that when posters on the site discussed female economists, they used starkly different terms than those that were used to discuss male economists.

Many of those words are incredibly offensive. Posters tended to discuss a woman’s physical appearance (hot and hottie were in the top ten) whereas those terms used with men tended to emphasise their intellectual ability (Wharton and Austrian – for the school of economic thinking – were in the top terms for men).

‘Women incur a penalty’

The paper caused a lot of debate within the economic community – with many saying that what people say on the internet isn’t necessarily an indication of how they truly think.

University of Bristol professor Sarah Smith says: “I think it’s an extreme view. I don’t think it’s a representation of everyone in the profession.”

But, she adds: “I don’t think it’s surprising when you tie it up with looking at the proportion of women at different levels.”

Prof Smith – who is also the chair of the Royal Economic Society’s Women’s Committee – cites other evidence that suggested a bias against women in the economics profession, such as a paper published by Harvard researcher Heather Sarsons.

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Heather Sarsons

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Heather Sarsons found that women’s contributions to co-authored papers tended to be undervalued

That paper found that an additional co-authored paper on an economist’s resume correlates to an 8% increase in the probability of a male economist getting a tenured post – but only a 2% increase for female candidates.

Interestingly, the gap decreased if women co-authored papers with other women.

Ms Sarsons wrote in the paper: “While solo-authored papers send a clear signal about one’s ability, co-authored papers do not provide specific information about each contributor’s skills. I find that women incur a penalty when they co-author that men do not experience.”

Her paper, she added in a footnote, was intentionally single-authored.

There are more studies – ones that suggest that female economists’ papers take six months longer to peer review in top journals than their male counterparts; that when women get tenured faculty jobs in economics, they get paid less; and that even if a woman makes it to the front of a lecture hall – there might be no men listening to them.

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Victoria Bateman

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Victoria Bateman organised a Women in Economics day at Cambridge in 2015 to encourage more young women to enter the field.

“There was a very interesting and quick bit of number crunching that was done by the Centre for Global Development which has headquarters in both Washington and London,” says Cambridge’s Dr Bateman.

“When they looked at male attendance at the seminars that they run they found that it fell off quite dramatically whenever gender was mentioned in the seminar topic.”

Dr Bateman says the fact that there are so few women at the top has meant that many young women can’t view themselves in those positions. She notes that in the early 2000s the proportion of women studying economics in British universities was around 30%.

It’s down to just 26% today.

‘Only half the story’

That women aren’t even choosing to enter the discipline really surprised me. So I went to Cambridge to speak to some of the current undergraduates in economics.

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Paulin Nusser says she noticed that there were very few women teaching her economics courses.

I met Paulin Nusser, a final year economics, student at the University Centre on a busy Sunday. I asked her what her experience studying economics had been like.

“When I think back to my lectures last year for instance out of the 11 lecturers and supervisors I had throughout the year that are based in the faculty – just one was a woman,” she says.

This is why she says it can sometimes be hard to imagine a career in academic economics, even though she hopes to pursue it at postgraduate level.

“Representation is just something that does affect me because I am subconsciously looking for role models or someone where I can say you know, ‘oh that could be me standing up there teaching this lecture’.”

Clara Starrsjo, a second-year student says she notices that her male and female classmates approach economics problems differently – which often leads to better, more comprehensive answers.

This is why she’s become passionate about increasing the number of women who study economics – including meeting with potential female economics students at a Women in Economics day each autumn.

I ask her why she tells these women they should enter the field – even if the odds may seem stacked against them.

“For the moment economists have only looked at the world around them through male eyes and this only provides us with half the story,” she says she tells them.

“And with only half the story how can we get results that will help the whole population?”

Source : [1]

The companies making bicycles from wood

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Connor Wood

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Connor Wood makes its bike frames from white ash or black walnut

The forerunner of the bicycle – the laufmaschine or running machine – bears only a passing resemblance to the pedal-bikes we know today.

Invented in 1817, it had no chain and was powered by the rider pushing his feet along the ground in a walking or running motion.

Even more unusually, its frame was made from wood.

Jump forward to 2017, and a crop of bike makers is turning back the clock – at least in terms of using wood as a core material.

These firms make their bicycles in part, and occasionally wholly, from woods such as ash, oak and walnut.

They are driven by a love of craft and design, the desire to use natural materials, and a passion for cycling itself.

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Connor Wood

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Chris Connor decided to combine his long held passions for woodwork and cycling

And they have attracted a small but growing base of enthusiastic customers, willing to pay high prices for their lovingly crafted creations.

“People like having something unique, something different,” says Chris Connor, the founder of Connor Wood Bicycles.

“They also appreciate the craftsmanship. Not a lot of things are built by hand these days.”

The company was born in 2012, after the 48-year-old American decided to combine his long held passions for woodwork and cycling.

All his bikes all have wooden frames; the other parts, such as the gears and wheels, are made from steel, carbon or rubber.

Prices range from $3,500 (£2,600) to $11,000.

Sales have gradually been increasing, but it hasn’t been easy, says Mr Connor. That’s because of a perception among some cyclists that wooden bikes may break or be unsafe.

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Niko Crepnjak

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Woodster Bikes makes its frames from beech and bog oak

In fact, Mr Connor says wood is very durable, which is why it’s used to make tool handles, skis, boats, even light aircraft.

It also absorbs vibrations well, making cycling on bumpy roads smoother, less tiring and quieter.

“And of course, these bikes look great,” says Mr Connor, who makes his frames made from “strong but flexible” white ash or “eye candy” black walnut.

A recently published book called “The Wooden Bicycle: Around the World” features 111 companies that make bikes from wood or bamboo.

Only one, Splinterbike in the UK, sells 100% wooden models with its bikes featuring wooden gears, chains and wheels.

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Tjaša Matičič

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Woodster Bikes cost from 2,500 euros to 17,000 euros

However, most limit their use of wood to the frame, and occasionally parts such as the handlebars and forks. Other parts will be made from materials typically associated with bikes, such as aluminium.

It is the unique design of wooden bikes, and their bespoke craftsmanship, that underpins their appeal, says Gregor Cuzak.

The Slovenian co-founded Woodster Bikes after meeting woodworker Iztok Mohoric, who had recently designed a bike with a wooden frame.

“I wasn’t interested at first, but after I saw it and took a ride, I was immediately convinced,” Mr Cuzak says. “People were watching me as if I was driving a wild sports car.”

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Thessa Lageman

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Piet Brandjes, right, co-founder of Bough Bikes with his son Bob

Like other firms in the space, Woodster is targeting customers who appreciate the finer things in life. Its bike frames are made of woods such as beech and bog oak, and prices range from 2,500 euros (£2,190) up to 17,000 euros.

In addition, every customer gets a book with a story about how their individual bike was made.

“We even plant a new tree at the same location where we cut one for your bike,” Mr Cuzak adds.

Piet Brandjes, 63, who co-founded Dutch firm Bough Bikes, agrees that wooden bikes “attract attention”.

For that reason, firms in the Netherlands such as Novotel and Rabobank have bought Bough Bikes for their guests and employees to use.

More stories from the BBC’s Business Brain series looking at interesting business topics from around the world:

The bikes are also used in a shared bike scheme at Schiphol Airport business park, in Amsterdam, so workers can give them a spin.

Mr Brandjes says all his models have French oak frames, handlebars and front forks. However, customers don’t need to worry about them getting wet in the rain.

“The bikes in the shared scheme have been outside for three years and they still look good,” he says.

“As long as wet wood dries again, it’s fine. You just need to polish it once a season.”

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Bough Bikes

Everyone I spoke to reported feeling frustrated by assumptions that wooden bikes were less safe and sturdy than other bikes.

Mr Connor tells me that by using the right woods and construction techniques, his bikes are perfectly durable.

“A strong seasoned wood, laminated to itself in strips with reversing grain directions, bonded with aerospace adhesives is incredibly tough.

“Add in interspersed layers of carbon fibre and Kevlar, like in my bikes, and the strength far exceeds the requirements for making a reasonably lightweight performance bicycle frame.”

As for how they function, Mr Brandjes points out that all of his bikes have been tested by TUV Rheinland, a renowned German organisation that certifies products.

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Bough Bikes

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French oak

However, other obstacles may hinder firms in the space.

For one thing, wooden bikes tend to be heavier than many road bikes. The various models of the three companies I spoke to weigh between 9.9kg and 25kg.

“You can’t make them as light as carbon bikes,” says Mr Connor, “but I don’t think a pound or two more or less matters.”

The people who buy them are not competitive riders, he adds.

Too pricey?

Another issue is that wooden bikes tend to cost a lot, which may be preventing higher volumes of sales.

American firm Renovo, whose bikes start at $3,995, is probably the number one producer of wooden bikes worldwide. And yet it told the BBC it had only sold 1,000 models since it was founded in 2007.

“If someone manages to create a wooden bike for under 1,000 euros (£914), sales might rise,” Mr Cuzak says.

He has only sold 10 bikes since he started in 2015, meaning that he and his partner still have to work on the company in their spare time.

However, Mr Connor runs his business full time, having sold around 65 pieces to date. And Bough Bikes has shifted about 600 bikes since it was founded in 2012.

Summing up what many in the wooden bike industry believe, Mr Cuzak says, “this is not a regular business, but a slow business”.

However, he adds: “We’ve planted the seed and are now waiting for the tree to grow. I believe it will, eventually.”

Source : [1]