Work, business & professional services

A world without secrets?

Just as individuals are distressed when personal information appears on the internet, companies are feeling the damaging effects of data leakage. In some cases, it is deliberate; in others, it is simply the ability of electronic data to easily cross boundaries unless tightly controlled. The challenge is to keep data under control while giving the kind of access employees need to help run a business effectively – and remain transparent to stakeholders.

It’s a tricky edge to walk. Renault recently suspended executives for passing on blueprints for electric cars, AOL saw a private strategy document become public, and now Bank of America is investigating to see if it will be the subject of a megaleak, forecast by Wikileaks hero, Julian Assange.

In the days of paper, it was much easier to manage and protect data and the systems were all “structured information”. Today’s information is “unstructured”, as it includes text files, presentations emails, as well as financial data or payroll systems. Moreover, there are more ways to pass it on, whether through wikis, web conferencing, smartphone apps, and even outsourcing. Younger employees also have their own technologies and may transfer what they need to their own phones, PCs or spreadsheets. In fact, it appears many employees have more access than they need, which is called “over-entitlement”.

Companies are urged to use special software, such as “content management” (classifies digital content and decides who has access to it), “data loss prevention” (inspects traffic out of the network) and “network forensics” (looks for suspicious patterns in network activity). Just as technology has enabled the collection of massive amounts of data, it must now be used to protect that data. But there needs to be a balance between secrecy and transparency.

Like many of us, companies often don’t know what or how valuable their information is. They have to decide which data should be kept, how long for, and how sensitive it is. At the same time, it has to gel with their strategies on transparency. For example, Best Buy believes its customers should know as much as its employees and Twitter tells them they can tweet about anything. It’s a risky move, but it’s naked.

Large corporations, like the individuals who work in them, can’t afford to ignore the challenge of keeping what’s private, private. Back to the “naked corporation” or time for a small cloak?

Protecting older workers for a change

As if Japan hasn’t had enough troubles lately, it’s in dire need of some entrepreneurial energy and a boost in productivity. Yet, the group of workers most likely to supply it seems to be held down by a system that favours older workers. Many young Japanese are “irregular workers”: casual workers who work for half the salary of regular workers, who are more likely to be in their 40s or older.

Some 45% of the young, aged 15-24, held irregular jobs last year (twice the rate of older workers), compared to 17.2% in 1988. Moreover, only fresh graduates get the jobs – graduates of three years or more are considered to be less amenable to corporate cultures. The Welfare Ministry recently addressed this problem by offering subsidies to employers to take them on. Presumably the older workers are already well inculcated and won’t cause trouble.

There were only 19 initial public offerings (IPOs) in 2009 (66 in the US), suggesting that Japan seriously needs some fresh blood with new ideas. Other research has shown that younger people tend to generate more radical ideas than older ones, even though older ones may be more experienced in carrying them out.

This story, from Japan, makes a change from the usual claims, all too true, that Baby Boomers can’t get jobs in the West. It seems we don’t value our older workers nearly as much. Perhaps the continual search for entrepreneurship is just a symptom of an individualist society, as opposed to Japan, which is a collective society. But we might well see an exodus of young Japanese from Japan that won’t help that country or the Baby Boomer cause.

Capitalism with a Chinese twist

If Japan is looking economically jaded (see Protecting older workers for a change, above), China is charging ahead with its own brand, dubbed “bamboo capitalism”. This describes a kind of heavyhanded capitalism applied essentially by bureaucrats. Certainly the burgeoning infrastructure projects, such as roads, power plants and bridges - and the transfer of foreign intellectual property - are a result of state momentum. But the real source of GDP, 70% of it in fact, is created by private entrepreneurs.

Less than 10% of China’s 43 million companies are state owned, and the average ROI of unlisted private companies is 14%, compared to 4% in fully or partly state-owned businesses. There was a 30% boost in registered private businesses from 2000 to 2009. Moreover, they are often outside the laws about owning land, employing labour, taxes or licensing, and regulation of this sector is commonly called “one eye open, one eye shut”.

Lack of legal restrictions is unfortunately accompanied by lack of legal protection, for example, intellectual property. It also makes it more difficult to go beyond local boundaries. Raising capital becomes an unofficial affair, with rates beginning at 18% and ending at 200% in some cases. Loans rarely go beyond two years.

So what works for bamboo capitalists can’t work indefinitely. Yet competition from private companies has helped push up wages and benefits, creating a more robust consumer culture. Employees have also noted the rewards available from owning, as opposed to working on, a production line. The term “bamboo capitalism” is a somewhat patronising term, I believe – it fails to recognise the incredible strength and tenacity of bamboo.

Make yourself look good online

Just as companies are deeply concerned about what is said about them online – and how much of their data is no longer secret – individuals have the same concerns. There are many stories (and lawsuits) about people who have committed one indiscretion, and been plastered all over the internet. But it’s worth remembering that, if you don’t like being top of the search results for a drunken moment, you can manipulate your profile to be top for a better reason.

If you can’t beat ‘em, join ‘em. It’s time to manage your profile on the internet in the same way that companies manage theirs – good PR. Young people know prospective employers are looking at their internet activity and they’re already learning the need to look good. Goodbye drunken party, hello tennis club.

There are two companies that can help in accomplishing this task. Spokeo, a Californian company, uses a web “scraper” to combine all records about you with public ones to provide a complete profile about you. For a fee, someone can access this profile, but you can also remove it.

Reputation.com also does what it sounds like. This company can remove your name from undesirable sites, but it can also work to put you on the desirable ones. As most people don’t look past the first few pages of results (The Law of Surfing), the purpose is to make sure these pages show you in your best possible light. (For example, I did a quick search of me and found myself on LinkedIn, Facebook, and my own personal site – it was only on later pages that I appeared in sundry links from the grimy past…)

Everyone leaves a digital trail. (See: A world without secrets, above.) It’s up to you to take responsibility for that trail, so that the people who choose to follow it end up with the desirable you.

Chinese labour is no longer cheap

There was a time when Chinese labour was cheap, but now the average worker there is more expensive than in any other emerging Asian economy. It appears that prices for manufacture can rise every couple of months and, if you don’t accept a price, it can go up again. Some businesspeople are even choosing to move production back to Europe because quality is falling too. What’s going on?

Prices are shooting upwards in China, perhaps faster than the official figures claim. Minimum wages are about to rise 20% in Beijing and 10% in Shanghai, suggesting that Chinese workers are more demanding about what they earn. Currently, 60% of the workforce are of working age but, because of the one-child policy, this balance moves to 50% by 2040 and less than 40% by 2050. Many young workers will be forced to support their children and their aging parents.

This also affects the stockmarket. Societe Generale has found a clear correlation between the growth rate of retirees plotted against the price/earnings ratio. As people retire, the stockmarket becomes cheaper because people take their money out. The same applies to the housing market as retirees downsize. Japan is a good example of this correlation in action. The same is likely to happen in America, where the median age will be 41 by 2030 (compared to 41 in China).

The advice is to stay out of the Chinese stockmarket, where the ratio of working people to retirees will change much more rapidly. Meanwhile, people looking for work should start to concentrate on the massive market of retirees looking for goods and services to support their lifestyles.