SME's Shun Bank Finance Offerings

Interesting report today that "less than half SMEs have taken action [to address cashflow pressures] with 11pc hiring an in-house credit controller, 9pc using invoice discounting and 8pc factoring". There are over 4.7 million SMEs in the UK (see demographics below).

According to the Telegraph:

"Peter Ibbetson, chairman of NatWest and RBS small business operations, is concerned that so few SMEs are using banking services to alleviate the problem but small business organisations believe companies are reluctant to incur extra charges after their bank borrowing experiences."

In other words, it appears SMEs would rather leave debt on their books, taking any loss and resulting income tax deduction, than become hog-tied by a bank at rates of about 36%APR in consumer finance terms - at least that's the rate we estimated Zopa lenders would have to beat to offer attractive trade finance. That's because you should factor in (excuse the pun) the charges on any additional accounts you're required to hold as part of the finance deal, the holding cost of any deposit held as a guarantee, as well as fees and the interest rate on any overdraft, loans, letters of credit and/or factoring. SME owners are also increasingly required to take a commercial credit card, which doesn't benefit from protection from all the old dirty tricks that are gradually being weeded out under consumer banking and finance regulation.

Yet more evidence the time is ripe for an alternative source of SME trade finance?

The most recent UK government statistics (published Oct '09) show that, at the start of 2008, there were 4.8 million UK private sector enterprises of which 99.3 per cent had 0 to 49 employees. Only 27,000 (0.6 per cent) had 50 to 249 employees and 6,000 (0.1 per cent) employed 250 people or more.

Apple To Kill The Book? Define "Book"

What is a "book"?

The question was inspired by Technollama's indignant response to some gadget freakery about the iPad killing the humble book and how George Orwell would have written 'apps' if he were alive today.

"Book" is an increasingly elastic concept. We have hardbacks, paperbacks, e-books, talking books, and so on. So a dictionary definition such as "A set of written, printed, or blank pages fastened along one side and encased between protective covers" is way too narrow.

A book is of course more than a physical item. No definition should ignore the content and the diverse forms in which that content may be consumed. In this sense, the definition of "book" should be no different than that of a 'television'.

Top of head, it might be more apt to define "book" as, say, "a coherent collection of thoughts recorded in text and graphical form by the creator(s), and edited, packaged and published by an independent person." That would allow you to distinguish, say, an academic paper, which I don't believe is (or should be!) edited by a person independent of the creator. Maybe that's wrong - I'm no academic.

Interestingly, 'film' and 'television show' are increasingly harder to differentiate from 'book' in these terms.

I agree with Technollama that it's lazy, ridiculous and futile to speculate whether Orwell would have forsaken books for 'apps' the second he clapped eyes on an iPad. He's dead. At any rate, the lack of reference to a living author in this vein is telling.

Of course there must be successful living authors who've previously only found expression in "pages fastened along one side and encased between protective covers" who are discovering a new dimension to their musings via the latest technology. Cory Doctorow is one example, although he seems to use technology for publishing, marketing and distributing his books in 'traditional' form rather than the act of creation itself. But I have trouble believing Mr Doctorow will cease producing "books" because of the iPad. I'd ask him, but the proof will be whether he does or not - as an old English teacher used to say, "never trust the author, trust the tale" ;-)

When it comes to new technology, it's more interesting - indeed fascinating - to consider how the expression of the same thoughts varies according to the medium. In other words, how each new medium alters expression.

Copywriters, screenwriters and playwrights experience this for a living, of course. Dean Johns could explain that dynamic far better than me. But anyone with broadband and a bit of self-confidence can use, say, Xtranormal to turn a blog post into an animated clip and experience the edits required to convert perfectly idiomatic written words into idiomatic speech. It's perhaps tougher to distil a written paper into a compelling visual presentation (i.e. one that doesn't involve reading the paper and clicking slides). Saul Klein seems good at this, and the presentations at GikII (exploring the legal interaction between popular culture, speculative fiction, and new technology) are a sight to behold. Neither process is equal to the challenge of turning a novel into a feature film. Some scenes or concepts in the text are simply not practicable, convincing or satisfying in a visual medium - even with all the resources of Hollywood theoretically at one's disposal. But each process reveals that an original work provides only rough guidance as to how its meaning should be conveyed in a new medium. For that reason, the expression of a thought in one medium is no substitute for the expression of that thought in another. And it should follow that no medium is a substitute for another, or will "kill" it.

The replacement of vinyl records and casette tapes with CDs is really the evolution of one type of medium, rather than a whole new medium replacing others.

So what difference, if any, will the iPad make (even if one could glorify it as a medium in itself)?

That remains to be scene (I couldn't resist). However, the potential for added distribution alone, if not new modes of expression altogether, makes it worthwhile for 'traditional' authors to follow such steps in the evolution of technology and how people - their customers - react.

Living authors, that is. George Orwell can rest in peace.

Inverting The Institutional Narrative

Fascinating to see big charities accuse big business leaders of putting their own interests first in objecting to Labour's planned increase in National Insurance. The charities insist that their own constituents - older people, lone parents and environmental groups - are all capable of great influence on the electoral outcome and we should be focusing the debate on them.

Either way, it's ironic that NIC changes - which will affect all taxpaying individuals - are being subverted by institutions seeking to draw the electoral battle lines around their own 'vested interests', rather than the needs of individual voters.

Another example centres on the rise of Google as a force in the consumer advertising market. Newscorp claims that Google is getting a 'free ride' on Newscorp's content. Local newspapers also claim to be victims. And Europe's big Telcos recently leapt onto the bandwagon, claiming that Google is getting a 'free ride' on their networks. I guess TV and other device manufacturers and electricity companies will be the next to climb aboard.

The problem with such narratives is they ignore the 'elephant in the room' - that individuals are ultimately responsible for each wave of service provider overtaking the last. You decide what to pay and to whom, and whether to pay at all. The real complaint for Newscorp, big telecos and the like, is an internal one. They've lost sight of their role in solving consumers' problems in favour of solving their own. They have ceased to be - and ceased to be rewarded as - facilitators. Unless they can regain their role as facilitators of people's actual and desired activities, they will die the lingering death of the spurned institution.

The institutional narrative dominates in our society, yet research shows faith in our institutions has plunged over the past few decades, and we have turned to direct action and single issue campaigns as an alternative to formal politics. A Eurobarometer poll also found that only "50% of EU citizens trust their local and regional authorities, a level slightly higher than for the European Union (47%). This level of trust in the local and regional authorities is considerably higher than the level of trust in national governments or parliaments (34%)."

So, while it is dominant, the institutional narrative is also misleading. To properly understand our motives at the ballot box or in favouring the rise of email over posted letters, or internet shopping over some high street retailers, or Google over Newscorp, and where that may lead, the narratives of history and current affairs - and of the future - need to be told from the bottom up, not the top down.

Hunting The Digital Economy Act

Well the Digital Economy Bill may be an Act, but the shooting ain't over yet.

Hunting down the villains of the Parliamentary 'wash-up' will be a bloody, complex and expensive business. A process Lord Clement-Jones eloquently alluded to at the end of his damning speech on the DEB: "I hope that we have made the views of these Benches clear and that never again will such a complicated Bill be dealt with in this way at the fag end of a Parliament."

Here's a big offender, who was set loose late in the piece (italics are mine):

"18(1) The Secretary of State may by regulations make provision about the granting by a court of a blocking injunction in respect of a location on the internet which the court is satisfied has been, is being or is likely to be used for or in connection with an activity that infringes copyright.

(2) “Blocking injunction” means an injunction that requires a service provider to prevent its service being used to gain access to the location."

There's immense potential for evil in the exercise of this disproportionate, unnecessary and overly broad power. Establishing its true scope and guarding against unintended consequences is an impossible task. Numerous activities may "infringe copyright" (see sections 16-27 of the CPDA, for a start). It is unclear whether only the rights holder could  seek a blocking injunction. And what qualifies as a 'location on the internet' is anyone's guess.  Could one of your competitors spot any random technical infringement and try to shut down your web site? Your customer extranet? Your presence in  search results, price comparison tables etc etc? You would need deep pockets to insist that all this be clarified in the face of a threatened injunction.

Ten sub-sections try to avert the need for these regulations, but the villain is already loose in  the political underworld. Given the standard of our politicians, it's easy to imagine a Secretary of State being "satisfied that the use of the internet for activities that infringe copyright is having "a serious adverse effect" on businesses or consumers, that making the regulations is a "proportionate" way to address that effect, and that making the regulations would not prejudice national security or the prevention or detection of crime. Then the minister can do his worst, explain his reasons, wait for the 60 days of ranting to expire and press on with issuing the regulations.

No, this villain is loose - as are others - and they're coming after the little guys. It's the sort of challenge that attracts super heroes. If Hit Girl isn't available, I guess it'll have to be ORG.

All Washed-Up, Ready To Go

The despicably secretive, double-dealing frenzy of the UK Parliamentary 'wash-up' is an especially disgraceful and cretinous process in the hands of the current shameful, scandal-ridden crew. That they went ahead and wallowed in it shows they've learned absolutely nothing about how to rescue their institution from the desperately low esteem in which it is held. As they huddled in their dirty little corners to snuffle out a deal, few spared a thought for the millions of individuals who put them there or the mandate they were granted. Parliamentary reforms were ditched as they cosied up to the copyright moguls and helped themselves to the tools of leak suppression.

We can only hope that this insidious wash-up process and the tawdry deals it produced will adorn the funeral pyre of this miserable, tragic saga in global political history.

"Ye are grown intolerably odious to the whole nation . . . In the name of God, go".

Oliver Cromwell, 1653.