Commercial awareness update 9th January by Ben Triggs

Is the UK the world’s strongest economy?

After a turbulent year, the UK ended 2016 as the world’s strongest economy, with business activity reaching a 17-month high in December. The economy grew by 2.2% last year, which was significantly higher than the Bank of England’s post-Brexit predictions, and more than Germany and the US. The UK’s Gross Domestic Product (GDP) actually rose more in the second half of 2016 than it did in the first.  Experts suggest only the German and UK economies will be in the world’s top eight by 2030, with the French economy forecasted to be less influential in the next decade.

The chief economist at the Bank of England, Andrew Haldane admitted economists’ pre-Brexit predictions were off the mark and has likened their inability to predict economic events to the ‘Michael Fish moment’. BBC Weatherman Fish infamously failed to predict the 1987 storm – Haldane likely this moment to economists not foreseeing the crash in the sub-prime mortgage market, which sparked the economic crash of 2008.

Last week, the FTSE 100 finished at its highest level ever, after enjoying its longest run of record closes since 1997. The FTSE hit 7,200 points on Friday, as the shares in housebuilder Persimmon rose 7% amid reports of strong sales figures. The FTSE has been boosted by the weak pound, which has fallen further today after PM Theresa May hinted about a ‘hard Brexit’. On Sunday, she suggested Britain couldn’t pick and choose which bits of the EU it wanted, causing the pound to sink to $1.2175 (a two-month low).  

There are many signs the UK’s economy is going into 2017 on stable ground, but economists have warned high inflation and the triggering of Article 50 will cause economic instability in the year ahead.

Questions to ask yourself… Is there anything the Bank of England could do to boost the value of the pound? Are there any negatives of a high FTSE 100? 

Consumer spend at two-year high

Brexit uncertainty doesn't appear to have impacted on consumer confidence, as spending increased in the final months of 2016 quicker than any time in the last two years. Payment company Visa found cash withdrawals and card payments had experienced a year-on-year growth of 2.8% in Q4 – a larger increase than both Q2 and Q3. Bars, restaurants and hotels showed the biggest spending increase, growing 7.3% in the period. A more established Black Friday and consumers spending more over the Christmas period contributed to this growth. It’s a significant indication of how the British public are feeling about the economy and their financial security. Spending always increases around Christmas but this growth in expenditure suggests  people are feeling more confident in their position compared to a year ago.

In 2017, consumer spend will continue to be a key indicator of confidence. Inflation has already risen to 1% due to the weak pound (and therefore more expensive imports), but it's expected to reach 2.7% next year. Experts believe consumer confidence will be affected, due to the cost of essentials increasing more than wages rise.

Questions to ask yourself… Could experts be wrong about the negative impact of Brexit in 2017? Should the Government consider raising interest rates?  

The iPhone turns 10

A decade ago today the very first iPhone was unveiled, with the aim of combining three products – a mobile phone, an iPod and an internet communications device. This was a revolutionary step forward in the mobile phone market, but took time to become the market dominating force we know today. Within two years of this launch, the App store was fully established, the price had significantly dropped and their 3G model was released, all contributing to its huge success. In 2015, there were over 231 million iPhones sold globally and Apple became the first US company to be valued at $700 billion.

What’s next for the iPhone?

In 2016, Apple saw sales of its premium product decline for the first time ever. Could it be the iPhone's boom years have past? In Apple’s biggest markets, people who want an iPhone will most likely have one and the market doesn’t grow quick enough to satisfy their growth targets. Apple’s strategy could be to lower price to increase their demand in emerging markets. Domestic brands like Huawei dominate the market in China, while Apple have been losing their share in the market. A change of pricing strategy could start to boost their market share again.  

Another possibility is Apple will be able to develop something brand new which significantly changes the marketing again. Apple CEO Tim Cook claims “the iPhone set the standard for mobile computing in its first decade and we are just getting started. The best is yet to come.” Let’s hope this is the case.

Questions to ask yourself… What makes the iPhone stand out in the mobile phone market? Does Apple need to create ‘the next big thing’ to stay relevant?

James Ford - Life Lessons from Earlham Hall to Singapore

On Monday 7th December, UEA graduate James Ford returned to Earlham Hall after 27 years. James is currently Senior Vice President and General Counsel for GlaxoSmithKline, the sixth largest pharmaceutical company in world, and his career has allowed him to work all over the world. He came back to UEA to give current students some advice on how to succeed in an international company.

Be authentic. 
One sentence that stuck out from James' talk was 'Be smart enough. Do not be the smartest.' While academic strengths are important, they are not the be-all and end-all. When working for such a large company, employees have to show that they can communicate and have chemistry with anyone that they meet. By being authentic, you can be more relatable and accessible to those you work with, and this is vital for any company to succeed.

Learn the basics. 
This seems pretty obvious. It is important to remember, especially in large companies, that there are masses of people who are above you when you are new to the industry. As James put it, you will be the 'snake's belly' for a while. Instead of being bogged down by making coffee and photocopying, take the opportunity to observe and learn how the company fits together and what your role in it could and will be.

Experiment early. 

When James was a trainee lawyer, he took the opportunity to go on secondment in Hong Kong. This was an unforgettable and invaluable experience. This willingness to adapt and throw himself into opportunities is how James started his career at what was SmithKline Beecham. After qualifying, James accepted a job in a private practice firm, with an appealing salary, but soon realised that it wasn't the firm for him. This experience pushed him to question whether he would be better suited in an in-house position and he ended up taking a job at SKB (now GSK).

Take calculated risks. 

Very similar to the above, risk-taking has been a key aspect throughout James' career. Starting out in London, he has gone on to accept positions across the globe, including America, Saudi Arabia and Australia. While James admitted that each time he and his family moved it was a struggle to adjust, he believed it was worth it, and that it made his job more interesting and rewarding. 

Believe in yourself. 

While in New York, James spent a difficult and stressful 5 months completing the New York Bar. American lawyers and British lawyers are trained to think differently, and James realised his potential to 'think both'. Fewer than 2% of the lawyers at GSK have dual qualifications, and this distinction led to James being offered a role in Singapore. This, for him, has been the most dynamic and diverse place to live, and has challenged him as he works in 120 markets and 36 departments. 

Finally, a piece of advice James himself was given: The harder you work, the luckier you will be. 

- Ellie Dobbyne

BT Commercial Awareness Tips

Katie Bradley and Julia Mansi, two trainees from BT's in-house legal team, visited UEA on Wednesday 11th November 2015. They came to discuss the value of commercial awareness to working in-house and to run a workshop enabling students to develop their commercial understanding.

BT has one of the largest in-house legal departments, with over 200 lawyers across the globe. Their training scheme is extremely generous, with a £31,500 starting salary, fully-funded LPC, BT Sport for just £1, support to help you with your studies, and much more. Only 3 applicants a year are given a place, and so it is fundamental that you prove you are more than just academically talented.

When applying for a training contract anywhere, not just at BT, it is fundamental that you demonstrate you are commercially aware. This is because you will be working for a company, and part of your role will be to support the business in its commercial goals, as well as providing legal and regulatory advice. It is therefore crucial that you have a clear vision of those goals and understand all the relevant factors that help or hinder the realisation of those objectives (e.g. political and economic climate, business structure, competitors etc). This vision and understanding is essentially commercial awareness.

Demonstrating your commercial awareness is fairly simple, and Katie and Julia gave us some top tips for your applications, interviews and assessment days:

• Research the company, its values and culture. 
• This can easily be done in a number of ways; looking at their website, attending open days, vacation schemes or internships, asking employees about their experiences. 
• Read the annual reports of the company. 
• This will help you understand more about the finance and structure of the business. 
• Reflect on previous work experience. 
• Be aware that you should never just list what you did, you should explain what you learned and how that development will allow you to be an asset to the company. 
• Reflect on other experiences. 
• You don't just learn skills from working, anything can be used to show that you can think critically. Popular examples include travelling, where you can show you have had to manage finances or organise the most efficient route, or being a committee member, where you can demonstrate that you have organised events based on the needs and wants of your members. 

For more information about the BT graduate scheme, visit: www.btgraduates.com.

- Ellie Dobbyne