By Ed Molyneux, CEO and co-founder of FreeAgent
As a result of the global coronavirus crisis over the past month, we’ve seen a range of measures being announced by new Chancellor Rishi Sunak to try and mitigate the impact of the disease on UK businesses.
In his inaugural Budget address in March, there was the introduction of a new Coronavirus Business Interruption Loan Scheme, as well as changes to statutory sick pay entitlement for employees and additional cash grants for retail, hospitality and leisure businesses. Within a week, a further £350 billion was pledged to businesses including slashing business rates, offering bigger loans, deferring VAT and Self Assessment payments and – most notably – new government grants to cover 80% of employees wages.
Since then, the crisis has dramatically changed the way that we live and work in the UK. Right now the country is in effective lockdown due to the spread of Covid-19, and all non-essential shops have been ordered to close. Millions of employees are working in self-isolation from their homes. And the future looks increasingly bleak for the nation’s army of self-employed, gig economy workers, contractors and freelancers.
Although record amounts of emergency investment and measures have been introduced to help UK businesses and try to keep the economy afloat, our self employed have unfortunately been put at the bottom of the priority pile. Legions of freelancers, contractors and self employed workers had to watch anxiously as their employed counterparts received piece after piece of reassuring news about wage guaranteed grants and sick pay changes – until the government was essentially shamed into expanding some of these measures to finally cover those in self-employment.
This should really have come as no surprise. For decades the self-employed have been the forgotten foot soldiers in the UK’s economy; a misunderstood contingent often viewed with suspicion. Our freelancers exist outside of mainstream employment which often makes them invisible to everyone except the chosen few clients who they work with. Contractors occupy the specialist – yet employee-lite – fringes of the workforce. And gig economy workers like Uber drivers or Deliveroo riders are barely even an afterthought in the national dialogue over workers rights and protections.
It’s an incredibly frustrating state of affairs because self-employment is actually an important, rapidly-growing section of the economy that needs to be nurtured, not hindered. Millions of self-employed people provide important business services across the whole country and play a vital role in stimulating wider economic prosperity, so they deserve to be treated equally to those in ‘traditional’ employment.
From the outset of the coronavirus crisis, we have finally seen the stark reality about the inequality of workers’ protections in the UK and just how vulnerable the self-employed really are. With no access to any kind of statutory sick pay, many have been faced with a stark choice if they fall ill to Covid-19 – try to work through the disease or risk losing business by taking unpaid sick leave.
It’s a similar story when it comes to holidays, maternity leave or any of the other standard protections that employees enjoy. Rather than statutory benefits being expanded to properly cover the whole of our ever-evolving workforce, the exclusion of the self-employed has simply become the accepted trade-off for the flexible work-life balance and freedom that contracting and freelancing offers. But the coronavirus pandemic is highlighting just how unsustainable this situation is, and how damaging it will be for the economy when millions of self employed people inevitably start shutting their businesses as a result of the crisis.
“At first glance, it seems as if the government has attempted in recent weeks to address some of these problems – albeit only for the short term. Stressing that the sector had not been forgotten or left behind, it eventually unveiled a rescue package of sorts for those in self-employment; offering access to loans, Universal Credit and creating a grant scheme to cover up to 80% of monthly profits which mirrors the one introduced for employers and employees. There was also a year-long freeze to the controversial reforms to IR35 (or off-payroll) legislation in the private sector, which aim to force medium or large-sized companies to take responsibility for checking whether contractors they hire should be taxed in the same way as employees.
These are certainly positive signs, but there will inevitably be a sting in the tail. The Chancellor has already hinted that the self-employed will face looming tax rises to help repay these coronavirus measures, which will be yet another step towards the government’s ongoing aspiration of creating parity between them and salaried workers. Historically, one of the few incentives for self-employment was receiving a modicum of tax respite in recognition of the lack of safety net in place to protect these businesses if they fail – so removing this feels like an unnecessarily misguided and unhelpful policy.
It’s also important to note that the emergency support measures announced by the government are full of caveats. For example, the new grants will not apply to anyone who has not yet submitted a Self Assessment tax return, meaning that thousands of new freelance workers and self-employed people will be exempt from receiving aid. And even those who do qualify may have to wait months to receive their grant payments, meaning that they will risk defaulting on paying their bills unless they can secure alternative short-term funds.
For contractors specifically, the freeze on IR35 reforms that was heralded as ‘welcome relief’ for the sector is actually the smallest crumb of comfort possible. They may get a year to prepare, but the fact remains that the reforms are still going to be implemented and this will have a huge impact on the sector. In my opinion, the entire concept of IR35 remains fundamentally flawed because rather than clamping down on “disguised employment” it attempts to treat contractors in the same way as employees – but as we’ve discussed already, they are simply not the same. And the reality is that they never will be unless both are given equal levels of protections and support.
Looking ahead, there’s also a strong likelihood that, when the coronavirus crisis finally subsides, the measures announced by the government will be swiftly removed and we will return to the status quo. That means, for millions of self-employed people, they will once again have no sick pay or income protection, as well as no statutory holiday entitlement, parental leave or pension provision. Considering the UK may be in the grip of a full-blown recession by then, these people would be more vulnerable than ever and place an additional strain on our fragile economy.
It’s a complex conundrum to solve, but it’s clear that our current system of statutory benefits for the workforce is badly out of date and does not reflect the reality of work in 21st Century Britain. Self-employment, small business ownership and gig economy freelancing are now as common – and just as valuable – as tenured employment, and we desperately need a system of protections that reflects this new reality.
The decision to work for yourself as a freelancer, contractor or small business owner is one fraught with risk, where people regularly pour their heart, soul and money into their ventures. Considering these workers are regularly described as the “backbone” of the British economy, isn’t it about time we actually started treating them as such?
Accurate forecasting is vital for supply chains in the COVID-19 era and beyond
By Andrew Butt, co-founder and CEO of Enable, a modern, cloud-based software solution for B2B rebate management.
All companies have to know how to prepare for an uncertain future – from shifts in the market and consumer behavior to the possibility of reduced revenue or increased overhead, it’s often necessary to adapt to changing circumstances as quickly as possible. This is particularly true when companies are attempting to navigate the economic consequences of a once-in-a-lifetime pandemic. If a company doesn’t have robust forecasting tools, it will continually be forced to respond to new developments and crises in a reactive instead of proactive way.
Forecasting is especially important for the management of rebate contracts, which are typically negotiated on the basis of last year’s performance and expected growth. This presents a significant problem for companies that aren’t capable of accurately predicting supply and demand or how other shifts in economic conditions will affect their business. This problem is even more serious in the COVID-19 era, which has thrown existing projections about consumer spending patterns and the state of the economy into disarray.
COVID-19 has been a stark reminder that rigorous forecasting is vital for negotiating rebates, facilitating alignment between manufacturers and distributors, and planning for the future in many other ways. However, despite the existence of increasingly powerful and accessible digital forecasting resources, many companies are still relying on antiquated methods to anticipate and prepare for the future.
The forecasting status quo isn’t working for many companies
Consumer behavior drives supply chains – when distributors submit an order to manufacturers, they do so based upon predictions about what volume of products and materials they need to satisfy demand. This is why it’s striking that, according to survey data from EY, only 20 percent of consumer products companies are “confident they can rapidly align their supply chain activity with changes in demand.”
At a time when 94 percent of Fortune 1,000 companies are experiencing supply chain disruptions due to the economic consequences of COVID-19, the ability to identify which adjustments are necessary to avoid costly inefficiencies and missed opportunities is paramount. However, too many companies are trying to make predictions with a limited set of tools. They’re using simple linear extrapolations which don’t take into account seasonality and other fluctuations (much less the effects of a crisis like COVID-19); many of their forecasting efforts are manual, which means they’re subject to human error (they also use up valuable human capital); and they’re not updated with the latest industry data or other relevant information.
But all these problems are solvable. Companies have never had more access to digital platforms that can help them collect and analyze the data necessary to generate detailed forecasts and align their production and distribution processes with the market.
Why forecasting is necessary for rebate negotiations
When a merchant or other distributor purchases products from a supplier, it’s important to determine which goods will be required in which locations and quantities. Rebates are retrospective payments that help buyers and sellers align their transactions with each others’ objectives – i.e., if a buyer purchases the seller’s target quantity, the seller can provide additional rebate as a bonus. This incentivizes continued trading with a partner and ensures that neither party is wasting resources.
While this may sound like a simple concept, rebate negotiation and management can actually be quite complex. For example, some rebates are based on year-to-year revenue growth, in which certain forms of purchases are eligible and others aren’t. Other rebates are contingent on an array of other elements, such as product-specific incentives and the maintenance of certain margins, promotions, etc. In these cases, forecasting is essential to account for many different variables over time, which will allow buyers and sellers to sign agreements underpinned by accurate pricing calculations.
When rebate forecasting is systematized and data-driven, the chances of a dispute are much lower. And if a dispute does arise, there’s an audit trail that allows companies to resolve it more quickly and fairly. The ability to predict which rebate structures and pricing make the most sense doesn’t just strengthen relationships between suppliers and distributors – it increases margins and cash flow, allows companies to allocate human capital more productively, and ultimately leads to stronger and more sustainable growth.
Accurate forecasting in the COVID-19 era
As economies around the world saw massive contractions amid COVID-19, supply and demand across many industries and sectors swung wildly. An analysis from the U.S. Federal Reserve pointed out that the “massive lockdown of the economy represents a large negative demand shock” while “supply chains in a number of industries have been affected not only internationally, with international trade in general greatly reduced, but also domestically, resulting in price increases for many goods and services.”
It’s extremely difficult to negotiate and manage rebates amid this economic uncertainty, which makes it much likelier that anticipated rebate thresholds (and the attendant pricing tiers) won’t be met. This could lead to a lack of motivation from buyers, which would result in lost profits all around. For some product categories, however, the recovery will be surprisingly fast, which means sales will quickly outpace their thresholds and pricing tiers (thereby eliminating the incentive to make rebate deals in the first place).
To address these issues, suppliers and distributors should renegotiate their rebate agreements after considering several potential scenarios for the next few months (and for 2021 more broadly). This is where technology comes in – digital rebate management platforms don’t just provide the ability to compare multiple forecasts, but they also make the process of renegotiation (and adherence to the terms of a new deal) more streamlined.
COVID-19 has demonstrated how important it is for supply chains to become as data-driven and flexible as possible, and forecasting is an integral part of that process. We’ll never know exactly what the future holds, but we can come closer to predicting it than ever before.
EU Commission sets out new intellectual property action plan affecting SEPs, patent pooling and EU design protection
The EU Commission published a new intellectual property action plan. The action plan, touted as “an intellectual property action plan to support the EU’s recovery and resilience” outlines possible future moves, noting that intangible assets are “the cornerstone of today’s economy”, with IPR-intensive industries generating 29.2% (63 million) of all jobs in the EU during the period 2014-2016, and contributing 45% of the total economic activity (GDP) in the EU worth €6 trillion.
The action plan also notes that the quality of patents granted in Europe is among the highest in the world, and that European innovators are frontrunners in green technologies, and leaders in specific digital technologies, such as connectivity technologies. That being said, the action plan notes that while smart intellectual property (IP) strategies can act as a catalyst for growth, European innovators and creators often fail to grasp the benefits of IP.
The action plan indicates that the Commission is willing to take stronger measures to protect European IP, to increase IP protection amongst European SMEs and to help European companies capitalise on their inventions and creations.
Ambitiously, the action plan also notes that the EU aspires “to be a norm-setter, not a norm-taker” and is keen to seek ambitious IP chapters with high standards of protection in the context of Free Trade Agreements, to help promote a global level playing field.
Some of the key takeaways are noted below.
Unified Patent (UP)
The implementation of the Unified Patent is seen as a priority in the action plan, indicating that it will reduce fragmentation and complexity, and will reduce costs for participants, as well as bridging “the gap between the cost of patent protection in Europe when compared with the US, Japan and other countries”. The action plan also indicates that it will “foster investment in R&D and facilitate the transfer of knowledge across the Single Market”.
With the introduction of 5G and beyond, the number of standard essential patents (SEPs), as well as the number of SEP holders and implementers, is increasing (for instance, there are over 95,000 unique patents and patent applications supporting 5G). The action plan notes that many of the new players are not familiar with SEP licensing, but will need to enter into SEP arrangements, and that this is particularly challenging for smaller businesses.
One area that has garnered a lot of press attention recently relating to the licensing of SEPs, and in particular to businesses that are perhaps not as familiar with SEP licensing, is that of the automotive sector. The action plan acknowledges this and notes that “although currently the biggest disputes seem to occur in the automotive sector, they may extend further as SEP licensing is relevant also in the health, energy, smart manufacturing, digital and electronics ecosystems.”
To this end, the Commission is considering reforms to further “clarify and improve” the framework governing the declaration, licensing and enforcement of SEPs. This includes potentially creating an independent system of third-party essentiality checks, and follows off the back of a pilot study for essentiality assessments of Standards Essential Patents and a landscape study of potentially essential patents disclosed to ETSI also published alongside the action plan.
Modernising EU design protection
The Commission has indicated that it wants to “modernise” EU design protection “to better reflect the important role design-intensive industries play in the EU economy”. At present, the Commission is asking for stakeholder feedback on the options for future reform. Recent results of an EU evaluation show that the current legislation works well overall and is still broadly fit for purpose. However, the evaluation has also revealed a number of shortcomings, including the fact that design protection is not yet fully “adapted to the digital age” and lacks clarity and robustness in terms of eligible subject matter, scope of rights conferred and their limitations. The Commission also considers that it further involves partly outdated or overly complicated procedures, inappropriate fee levels and fee structure, lack of coherence of the procedural rules at Union and national level, and an incomplete single market for spare parts.
Updating the SPC system
While the Commission notes that, following an evaluation, the Supplementary Protection Certificate (SPC) framework finds that the EU SPC Regulations “appear to effectively support research on new active ingredient, and thus remain largely fit for purpose”, it believes the EU SPC regime could be strengthened to reduce red tape, improve legal certainty and reduce costs for business. One option being touted is to introduce a centralised (‘unified’) grant procedure, under which a single application would be subjected to a single examination that, if positive, would result in the granting of national SPCs for each of the Member States designated in the application. The creation of a unitary SPC, complementing the future unitary patent, is listed as another option.
Patent pooling in times of crisis
The EU Commission notes how the pandemic has highlighted the importance of effective IP rules and tools to boost innovation and secure fast deployment of critical innovations and technologies, both in Europe and across the globe, but that it sees a need to improve the tools in place to cope with crisis situations. To this end, the action plan includes proposals to introduce possible mechanisms for rapid voluntary IP pooling and better coordination if compulsory licensing is to be used.
Increasing access for SMEs to IP protection and the introduction of an “IP voucher”
The action plan notes that only 9% of EU SMEs have registered IP rights. It aims to help SMEs better manage their IP and improve their competitiveness by giving EU SMEs easier access to information and advice on IP. Through the EU’s public funding programmes and further rolled-out at a national level, EU SMEs will get financial aid to finance so-called IP scans (comprehensive, initial, strategic and professional advice on the added value of IP for the individual SME’s business), as well as certain costs related to IP filings.
This will happen through the implementation of an “IP voucher”, which is made available in co-operation with the EUIPO, providing co-funding of up to €1,500 for:
- IP Scans: up to 75% of the cost and/or
- registration of trade marks and design rights in the EU and its Member States: up to 50% of the application fees.
SMEs will be able to apply as of mid-January for the IP voucher, through a dedicated website. We understand that the voucher will be provided on a “first come first served” basis.
The action plan also indicates the EU Commission’s intention to make it easier for SMEs to leverage their IP when trying to get access to finance, and that this may be done for example through the use of IP valuations.
EU toolbox against counterfeiting
The EU commission notes that counterfeiting is still a major problem for European businesses and proposes that an “EU toolbox” is set up to set out a co-ordinated European approach on counterfeiting. The goal of this EU toolbox should be to specify principles for how rights holders, intermediaries and law enforcement authorities should act, co-operate and share data.
AI and blockchain technologies
The action plan notes that in the current digital revolution, there needs to be a reflection on how and what is to be protected – perhaps a nod to the recent litigation we have seen regarding whether an AI can be considered as an inventor. The action plan in particular notes that questions need to be answered as to whether, and what protection should be given to, products created with the help of AI technologies. A distinction is made between inventions and creations generated with the help of AI and the ones solely created by AI. The action plan notes that the EU Commission’s view is that AI systems should not be treated as authors or inventors, which is the approach taken by the EPO, but that harmonisation gaps and room for improvement remain and the EU Commission has indicated that it intends to engage in stakeholder discussions in this respect.
There is much to take in from the action plan, and we will closely monitor developments in all of the above areas to see what will be implemented and when.
Tech talent visa sees 48% increase in applications over one year as global founders look to the UK
- Demand for Global Talent Visa applications has increased over two consecutive years since 2018 – up 45% and 48% respectively
- Demand is expected to increase from 2021as, from January, the Tech Nation Visa will be opening up applications to exceptional tech talent from the EU hoping to work in the UK
- 52% of those endorsed for the Tech Nation Global Talent Visa are employees, while 28% of those endorsed are tech founders
- App & software development, AI & machine learning,and fintech are the most common sectors for visa holders. Most endorsed applications come from India, the US and Nigeria
- 41% of Global Talent Visa applicantschose to reside outside of London to work in the UK’s strong regional tech hubs
Today, Tech Nation, the growth platform for tech companies and leaders, launches a new report, which reveals changes in the international talent landscape and growing interest in the Global Talent Visa.
The Tech Nation Global Talent Visa
As the race for global tech talent heats up, many countries have been making their pitch to attract the best and brightest tech talent to grow their tech industries and create jobs. The Global Talent Visa, for which Tech Nation is the official endorsing body for Digital Technology, plays a key role in enabling international tech talent to contribute to the UK economy and to the growth of high priority sectors such as AI and Cyber.
The visa has seen applications increase significantly over the past two years, with 45% and 48% increases respectively. Since November 2018, the Tech Nation Global Talent Visa has received 1,975 applications and endorsed 920 visas from over 50 countries worldwide. Demand is expected to increase in 2021 with the EU coming into the route.
52% of those endorsed for the Tech Nation Global Talent Visa since 2014 are employees at some of the UK’s leading tech firms, helping to fill existing talent gaps, while 28% are tech founders bringing ideas, talent and capital into the UK’s fast growing tech sector. In 2020, the visa enabled 421 founders to set up business in the UK, up from 400 in 2019.
This global talent is distributed right across the UK. 41% of endorsed applicants for the visa are based outside of London, working in the UK’s strong regional tech hubs. App & software development, AI & machine learning, and fintech are the most popular sector destinations for visa holders, reflecting growth in those tech sub-sectors. India, the US, and Nigeria are the top three countries from which exceptional talent has come into the UK with the Tech Nation visa.
A surge in demand and interest
Labour markets around the world and in the UK have undergone profound shifts in 2020. The data released today shows that there has been a 200% increase in the volume of users in the UK searching online for terms explicitly related to ‘UK tech visas’ between April and September 20201. This surge in interest to work in the UK’s digital tech sector is reflected globally too, with a 100% increase in users internationally searching for these terms in countries like the US and India.
Digital tech roles remain in high demand in the UK. Cyber skills are becoming increasingly important within the UK, particularly in regions such as Wales and the East and West Midlands where there has been a huge increase in demand between 2017 and 2019 (351%, 140%, and 86% respectively). Demand for AI skills has increased by 111% from 2017 to 2019, with Northern Ireland and Wales seeing the greatest increases in demand – 418% and 200% respectively.
Minister for Digital and Culture Caroline Dinenage said: “It’s no surprise the UK’s world-beating technology sector appeals to international talent. Our dynamic companies reflect the UK’s long-standing reputation for innovation and are renowned on the global stage. We are open to the brightest and the best talent, and this visa scheme makes it easier for companies across the country to recruit the talent they need to grow.”
Stephen Kelly, Chair of Tech Nation, comments: “The UK is a global talent magnet for Tech founders. The UK provides rich opportunities for entrepreneurs to set up, flourish and scale a business. The Global Talent Visa is crucial to making this process easy and accessible. Tech Nation’s Visa Report shows that, despite the pandemic, international interest to work in the UK tech sector has never been higher. Attracting tomorrow’s tech leaders to the UK is crucial to the continued growth of the sector, the UK’s place in the world, and driving the nation through recovery to growth in the digital age.”
Trecilla Lobo, SVP, People at BenevolentAI and Tech Nation Board Director, said: “The UK tech ecosystem continues to contribute to the creation of jobs and to innovative products and services. The Tech Nation Visa enables the UK tech sector to maintain its competitive advantage by attracting the best talent in specialist skills in tech, research and AI and a more globally diverse perspective to help us innovate and create amazing products and services. As an immigrant to the UK in my late teens, the UK visa scheme has enabled me to bring my experience, expertise and contribute to the people agenda for tech scale-ups in the UK, and helped me build a successful career in tech. I am really excited that the Tech Nation Visa will open opportunities and streamline the visa process for future global tech talent.”
Hao Zheng, Co-founder & CEO at RoboK, based in Cambridge and Newcastle, said: “I decided to work in UK tech because of the well-established ecosystem, world-class research and innovation and the high-level of experience that is extremely valuable for startup technology companies.”
Congcong Wang, Head of Operations at TusPark, based in Cambridge, said: “The UK is a world leading innovation hub, particularly in the fields of AI and Healthcare. Its environment fosters young talent, breeds disruptive innovation and creates amazing companies. Also, the culture of the UK is nurturing and tolerant for innovation, as it is considered a “safe place” for those inspired to take on the more risky route of entrepreneurship.”
Sumit Janmejai, Data-Driven Cybersecurity Professional at Capgemini, based in London said: “Having studied in the UK and worked with UK professionals, I could appreciate the fact that the UK is fast becoming the center of innovation, research and development in the Tech Industry. Besides that, the country offers an excellent life, welcoming culture, and a safe environment. It was an easy choice.”
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