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The high street is firmly back on the business agenda for UK entrepreneurs keen to boost visibility and engagement with customers, influencers and the media. Customers are buying and UK businesses are using every channel at their disposal to service demand while being in the spaces and places of the target shopper.  Because founders come looking for content and support on topics from raising money to hiring staff, Enterprise Nation is able to track sentiment and trends. Right now, the prevailing topic is how to service customer demand.  Customers, both large and small, are actively shopping both online and off line. Consumers are heading out in search of new experiences and products, and big brands – including corporates and government – are buying from small firms offering the niche services they are after.  Entrepreneurial founders are intent on servicing this demand regardless of the rising cost of doing business. There are three ways in which we are seeing this trend materialise:  E-commerce There are many platforms from which small businesses can sell both within the UK and overseas. Amazon has long had a position of strength in enabling spare room start-ups and growth companies to reach customers across the globe. The e-commerce giant is now being joined in a busy market by new platforms, such as Faire.com, which connect retailers to wholesalers, high street brands like John Lewis and Joules, who are starting their own marketplaces stocked with products from small businesses, and emerging sector-specific niche platforms, such as Glassette.com for homewares. All offer small businesses a rapid route to market, with payment solutions such as Klarna enabling a straightforward sales process for the customer.  Pop-up retail In order to meet customers, buyers, influencers and journalists on the High Street, small businesses are testing physical retail locations and bringing their brand into the real world. Property operators, including Sook, SituLive and Space and People, are making physical retail a viable option for the smallest of companies by allowing them to rent space by the hour, and on a budget. In-person events After a two-year hiatus, physical events are making a comeback, with the number of live business gatherings listed on our platform doubling in the past two months. As a result, we’re also seeing the return of the serendipitous meeting during the workday coffee break, or after-work drink, once again opening up new opportunities for the hustling entrepreneur.  Small businesses are powering on all cylinders and are staying updated on the techniques that will help them reach more customers effectively and efficiently. Doing so will deliver revenue, economic growth, and a vibrant business community successfully servicing market demand in entrepreneurial style.   Emma Jones is the Founder of Enterprise Nation, a business support platform and provider that operates in the UK and Ireland.

The unsettling effect of the pandemic on the job market is being felt as much in the US as in Ireland, as employers grapple to attract candidates with the skills they need to stay competitive, writes Dr Brian Keegan. People are harder to manage. It’s a stark realisation, expressed by a very senior Irish Chartered Accountant at a Fortune 500 company.   The pandemic may have been the great leveller across the world, but the process of recovery will not be as homogenised.   Just as in Ireland, the US has been scarred socially and commercially by the misery of COVID-19.  Within some sectors of American industry, huge resources are being devoted to little else besides hiring.   The unsettling effect of the pandemic on workers is prompting, not just career change, but location change. From the employer perspective, the traditional skill sets, which might once have automatically qualified people for well-paid employment, are changing.   Anecdotally at least, from the many members I spoke to during the Institute’s St Patrick’s day delegation to the US, led by our President Paul Henry, the most sought-after skill is project management — with specialisation in finance or data analysis an added bonus.   Educational establishments are already picking up on this shift. One Ivy League university is developing micro-certification, which is an accreditation for completing very short courses in high-demand skill sets like data mining. This isn’t merely reflecting the state of the job market, but changes in corporate strategies. Progressive industries have had a digital strategy as a priority for several years. This is now morphing into a “mobile first” strategy.  The pandemic has fostered recognition that consumer and brand loyalty is not merely built by online capability but by ease of access. This means getting your customer order capture and service delivery platforms onto mobile phones.   There is less sense of urgency over resolving supply chain issues. The prevailing sentiment is that, if the pandemic proved anything from a commercial standpoint, it is that supply chain issues can be worked out no matter how severely they appear to have been disrupted in the first instance.   Efficiencies in purchasing and supply need the clever use of data, and data usage brings risks and challenges all its own. There seems to be a view that systems don’t have to be 100 percent secure, just more secure than those of competitors.   As one US-based member in a national leadership role in IT suggested, every system is breakable. The trick is to ensure that yours isn’t the easiest one to break. Despite the staffing challenges, the common thread running through all these observations is relentless expansion. The ‘animal spirits’ which the great economist JM Keynes credited as the prime mover of economic activity are being boosted by an overwhelming sense of relief that the pandemic may now, in fact, be over.   This sense of relief is dangerous. Tragically, we have jumped out of the frying pan of the pandemic into the fire of war in Europe.   Not to diminish the horrible loss of life, the evil and unjustifiable attack by Russia on Ukraine may well cause even greater economic disruption across Europe than the pandemic.  Grain will be scarcer because Ukraine was the breadbasket of central Europe. The worldwide shortage of microprocessors will be exacerbated because key elements in their manufacture, notably Neon, were major exports from a stable and increasingly prosperous pre-war Ukraine.   The West has correctly chosen to punish Russia for its actions with sanctions, but effective sanctions cut both ways. The commercial priorities we had planned as we recover from the pandemic will have to change to reflect the invasion of Ukraine. The only saving grace is that people, though they may well indeed be harder to manage, are adaptable. Dr Brian Keegan is Director of Advocacy and Voice at Chartered Accountants Ireland.

Europe’s foreign and security policy is in bad shape. All eyes are focused on Germany’s new coalition to see how it will deal with the big strategic issues that will affect every EU member state, writes Judy Dempsey. What happens in Germany matters. As the European Union’s biggest economy and country, Berlin was pivotal during the global financial crisis, the euro crisis, the Russian crisis, and the migration crisis. Some member states viewed Berlin’s role as hegemonic. Others viewed it as a leadership necessary to keep the EU together – especially since other EU leaders were so weak. Angela Merkel, the former Chancellor who spearheaded these policies, was also a great supporter of the Good Friday Agreement and the Northern Ireland Protocol. Her outlook was based on her philosophy of strategic patience, especially for the big economic and security issues. She rarely let the big dossiers – Russia, China, transatlantic relations, and Ireland – leave her desk. They were the remit of the Chancellery, not the foreign ministry. She had an insatiable appetite for detail and juggled Germany’s interests, which were crucial to the country’s export-driven economy, with the values upon which the EU and democracies are built and what she herself believed in. Olaf Scholz, her successor – who was her finance minister – will make a big effort to retain these dossiers, but it is not a given. Annalena Baerbock, the Green Party foreign minister, is determined to put values at the core of her foreign policy. Baerbock is not naïve enough to believe that any country can discard interests, but with German public opinion on her side – especially a younger generation acutely sensitive to human rights, climate change, values, and more European integration – Baerbock can exert influence. Take China, for example. The Greens know that Germany’s economic interests and trade relationship – and indeed Europe’s – with Beijing are huge. China has overtaken the United States as the EU’s largest import source for goods. All the more reason to use that clout. Yes, China can retaliate by threatening embargoes if the Berlin government increases its criticism of China’s human rights record, its ineluctable shift towards authoritarian rule, and its untransparent procurement procedures and weak intellectual property rights. But would Beijing go down that path? Germany is too big inside the EU, and its relationship with the United States is too important for Beijing to threaten Berlin. It picked on Lithuania, which for a small country has taken an admirably tough stance on China’s human rights records and has opened a Taiwan office. Beijing sent its wolf warrior diplomats into overdrive, but China’s crude tactics are backfiring in many EU member states. That is why the German coalition must defend its values. The more united the EU is, with support from the United States, the better. As for Russia, Germany has a deep, ambiguous and historical relationship with Russia. Angela Merkel went out of her way to stop, or at least contain, the conflict in eastern Ukraine. However, the Minsk Accords and the Normandy Format talks she brokered with France, Ukraine, and Russia are unravelling. In retrospect, it was a mistake that Merkel did not include the United States or the EU. Meanwhile, Russia is using its gas as a geo-security weapon and its military build-up against Eastern Ukraine in much the same way as Belarus’s discredited leader, Alexander Lukashenko, is using migrants to divide the EU. It’s all about testing Europe. In short, with this new German government ensconced, the EU must finally act strategically in a way that can combine values with interests. Europe as a bloc has the economic power to do just that. Putting interests first is doing the EU – and its credibility – a disservice. Judy Dempsey is a Non-Resident Senior Fellow at Carnegie Europe and Editor-in-Chief of Strategic Europe.

After two years of lockdowns, restrictions and anxiety, Ireland is opening up. Three members explore how their goals have changed – both personal and professional – in 2022. Jennifer Nickerson Owner Tipperary Boutique Distillery Limited In 2021, our goals were focused on survival. We had been hit hard by COVID-19 and were trying to keep our heads down to make sure that we would make it through the year. Everything was about existence. Our focus has definitely changed in 2022. We are thinking about growth and opportunities; the conversation is about breathing life into new ideas and developing critical markets. We have some fantastic product ideas and interesting distillation projects, but I think the most interesting and novel opportunity will be tourism in 2022. Our distillery has been operating for over a year now but hasn’t been open for tours. I think the opportunity to welcome visitors will allow people to understand our distillery and allow us to tell our story naturally. We are an entirely authentic business, a true field-to-bottle distillery, and people will be able to experience this for themselves when they visit us. My main challenge this year is both personal and professional. I will be coming back into the business from maternity leave with fresh ideas and will need to figure out how to make these work with a small child in tow.  I poured my life into Tipperary Distillery for six years and barely took a day off – I took a laptop on every holiday and even worked on our honeymoon. We have been lucky to get a good crèche space for our little boy, but I’ll need to work smarter this year to make everything happen for our business and still be present for our baby when he needs me. In some ways, COVID-19 has helped in this regard, setting the stage for more online meetings and showing how much we can achieve remotely, but I still see this being the main challenge as we try to find a new normal. I’m feeling hugely optimistic about the year ahead. There are so many opportunities as life begins again in 2022, and while some challenges will crop up as we emerge back out into the post-COVID world, for us, they bring infinite possibilities. Mark Lawther Assurance Director EY I think it’s safe to say that we all hoped 2021 would be the year that we managed to emerge from the pandemic. While things didn’t work out that way, I feel a real sense of optimism as 2022 gets underway.  While challenging, the great ‘work from home’ experiment has genuinely proved just how effective we can be when working remotely. Before COVID-19, I wouldn’t have considered the possibility of delivering complex global audits in an entirely remote way! But by using cutting-edge digital technology and integrating that into our audit processes, we were able to continue to provide high-quality audits, enhance the way we look at risk and offer unrivalled insights to our client throughout the process. We haven’t just adapted our working approach with clients, we’ve also had to modify how we work internally. We have a fantastic culture of collaboration at EY, and of course, we are a training firm, so a lot is learned by observation. Having fewer days in the audit rooms meant our newer staff had fewer opportunities to learn by osmosis from senior colleagues, so we were mindful that we had to find creative ways to continue to nurture junior talent. Leveraging the latest tech, we were able to find plenty of opportunities for people to learn from each other while tapping into our extended networks to help people make valuable contacts.  My hope for 2022 is to fully embrace hybrid working and give our newer team members greater access to the ‘on the job’ learning that I was lucky to benefit from in my early career.  Overall, when reflecting on the past two years, the most significant benefit of the disruption has been the opportunity to be much closer to those that matter at home. I have spent two years at home on time for dinner with my kids, and my travel and commuting time has been virtually zero. As we move into 2022 and adopt a new hybrid approach to work, I plan to keep these benefits going a few days a week. Isabelle Cairns Tax Manager James Hardie International Finance DAC 2021 brought with it a new role in a new organisation, and although it’s been a year, we haven’t yet been working in the office at full-team capacity. Mastering the balance of the hybrid work model and building strong team connections are worthy challenges that lie ahead for businesses and their employees. The most significant change from last year is the specificity of my goals. What was previously pencilled in for ‘one day’ has now been given an actual timeframe. A positive taking from the pandemic was having time and space to reflect on what matters, which, in turn, helps decision making going forward. Working in tax in a growing global business, combined with the ever-changing international tax landscape, certainly keeps one on their toes! Right now, navigating international tax reform and its associated implications across business operating jurisdictions is a key focus. While some things are out of our control, it’s great to get back into planning for life beyond lockdown. Now that international travel is on the cards, adventuring to far-flung destinations is something I look forward to. Climbing Mount Kilimanjaro, a long-term resident on my bucket list, is a more realistic prospect this year. In 2022, I look forward to in-person meetings and other opportunities to connect face-to-face with colleagues.  Personally, I hope to get my foot on the property ladder. Aside from, I have signed up to cycle the Ring of Beara with a group of friends. Two very different challenges, both of which I look forward to with a degree of apprehension.

Could the underperforming Capital Asset Pricing Model be replaced by a new, shinier model? Cormac Lucey examines the theoretical contender – the Holistic Market Model. For decades, the Capital Asset Pricing Model (CAPM) has been the foundation stone of modern financial theory. Its cost of capital formula is routinely used to estimate the corporate cost of capital. And that, in turn, is used to value companies. It lies at the base of the architecture of asset allocation models and “efficient frontiers” that dominate investing today. The trouble is that the CAPM doesn’t work very well. Actual returns bear only a limited relationship to the CAPM’s predicted returns. The CAPM is a bit like a banger of a car that is still driven by an impecunious student. They don’t drive the car because it’s any good – they drive it because it’s the only car they’ve got. Modern finance sticks to the CAPM even though it isn’t very good for the simple reason that it has nothing better to put in its place. But that may be about to change. Jacques Cesar of the consultancy Oliver Wyman has spent the last five years working out an alternative to the CAPM. He and his firm have introduced the Holistic Market Model (HMM), which they describe as a radically inclusive blend of finance, accounting, analytics, economics, history, and sociology that explains the stock market’s past performance and frames the future. The HMM involves rejigging several key finance variables. Earnings The HMM moves EPS (earnings per share) from GAAP to what are called “Buffett earnings”. This refers to the surplus that can be distributed to shareholders once all reinvestments needed to keep the business going have been made. When Cesar applies a cyclical price-earnings multiple to the revised earnings numbers, the market is revealed not to have been as extremely cheap as it appeared in the 1970s and 1980s, and not as expensive as it appears now. Discount rate Cesar comes up with a Really Truly Risk-Free Rate (RTRR), which is the current risk-free rate converted into real terms by subtracting inflation expectations. It also removes what Cesar calls a “Treasury Risk Premium”, which reflects changes in the incentives to buy bonds. Equity risk premium Cesar reckons we can account for almost all differences in the equity risk premium (and therefore all variation in the valuation put on stocks relative to bonds) using five factors: first, business cycle and sub-cyclical variations in economic and financial risk – a quantitative risk-aversion indicator shows where market crashes will happen; second, inflation falling outside the ‘Goldilocks’ zone – extremes of inflation and deflation cause problems for equities; third, intergenerational increases in risk aversion driven by long secular bear markets (like the one from 1929–1942); fourth, “imperfect risk arbitrage between equities and Treasury bonds” – the equity risk premium tends to be even higher than it should be when the RTRR is extremely low, like it is today; and fifth, a factor that explains periods of speculative excess. Supply and demand for equities Recent decades have seen ageing populations and increased inequality in the developed world, both of which have sustained increased demand for equities. Model the moves in supply and demand for equities successfully, and you can capture an important influence on share prices. Oliver Wyman is now publishing a series of detailed research papers explaining and validating its analysis. Key questions that the model poses for the next decade are: whether the four-decade decline in the RTRR will be reversed; whether inflation will remain in the Goldilocks zone; and whether a change in the regulatory regime will put pressure on corporate profit margins. Maybe the world of finance is about to get a theoretical car it likes driving, as opposed to one it has to drive for lack of a better alternative.   Cormac Lucey FCA is an economic commentator and lecturer at Chartered Accountants Ireland.

It is fair to say that Brexit and COVID-19 have bashed small businesses over the past 18 months. But for many, the experience has made them more resilient and fit for the future. When the first lockdown was mandated in the UK, I read of people on furlough who took time to learn new languages and pursue long-forgotten skills. Not so for millions of business owners who were thrown into turmoil, first wondering how they and their teams would financially survive and then, having made it through the first tense months, figuring out how to stay connected to customers. It’s a remarkable fact that the UK witnessed a start-up boom during this time. Companies House recorded the highest number of new company formations in June 2020. This was, in part, necessity entrepreneurship as those who could not find work were forced to create their own employment. But mostly, it was opportunity entrepreneurship where people with time on their hands spotted gaps in the market or took a side-hustle (a business run alongside the day-job) and turned it into a full-time venture. The task now is to ensure that these lockdown start-ups get access to the right support and have every opportunity to keep trading. For existing businesses navigating massive change, the ones that have survived reacted fast and pivoted to serve the changing needs of customers – which mainly required going online. At Enterprise Nation, we saw high demand from small businesses for education and training on how to build websites, master social media, accept online payments, onboard to delivery apps and marketplaces, and achieve all this while being cyber-secure. When the economy and High Streets re-opened, demands changed again to where online sellers wanted to test physical retail and meet customers in person. When buffeted, founders showed strength by simply figuring out how to trade through. Challenges remain in the logistics of getting products into and out of the UK – and the cost of doing so. Added to this are rising energy and supply chain costs, while a changing landscape of health and safety restrictions causes confusion. Yet, businesses are in the position of having faced this before. As we start the New Year, small business owners feel more in control of their finances (as they had to take a closer look at the books when there was the risk of no funds coming in). They are digitally more capable of responding to shocks as work has been done to polish websites and plugin e-commerce capability. And possibly most significant of all, resilience levels are at an all-time high. Founders feel that if they can navigate lockdowns and Brexit, they can take on anything. This bodes well for the year ahead. Emma Jones is the Founder of Enterprise Nation, a business support platform and provider that operates in the UK and Ireland.