Andalucia Steve

...living the dream

Posts in Category: Economy

Tourism in Spain - why aren't they thinking ahead.

A rant about tourism

 

I received an official looking letter through the post this week. You know the sort, covered in barcodes and government logos. Roughly translating the label on the outside of envelope, it was from "The Institute of Statistics and Maps of Andalusia Council of Economic Transformation, Knowledge and Universities'. While mouthing the words represented by the three letter abbreviation 'WTF' to myself, I opened it up to find I'd been one of 5000 lucky people to be selected to take part in a survey about tourism. I say 'lucky', but reading the small print suggests that completing the survey is compulsory. I'd hate to be clapped in irons for not filling out a form, so I hastily took to their website to submit my responses online.
 
My first though was that I'd been singled out for selection as what they term over here as a 'residential tourist', which always makes me think we're regarded as foreigners who live here but they are expected to up sticks and go home at some point. But not so. This was a survey intended for Spanish folk, asking about their travel habits over the last few years. As the questions moved from past to the present  they were clearly designed to figure out what affect Covid has had on people's ability and desire to go on holiday.
 
I've read elsewhere in the Spanish press that certain bodies within the Spanish travel industry are pushing to refocus away from the international traveller towards the national internal market. I think this is quite a mistake. The whole point about international visitors is they bring wealth into the country that didn't exist here before. Encouraging internal tourism, trying to get folk to move around within the country, is only going to move around wealth that is already here, though clearly with the intention of sweeping more of it into the pockets of the folk behind all-powerful hotel lobby who are probably the authors of this initiative. In case you haven't come across the hotel lobby before, they were pushing to ban Airbnb a few years ago, alleging they were stealing trade from hotels across Spain. They didn't succeed but they arm-twisted government to bring in stiffer regulations to private landlords wishing to rent out the homes to tourists.
 
Tourism in Spain is in my experience a myopic, inward looking affair anyway. As I understand it, people need a degree in tourism to work in a tourist office but it doesn't seem to obligate them to speak English or any other commonly spoken European language. I've personally visited at least a dozen tourist offices here where Spanish is the only language spoken. Locally, strategy and planning to attract tourists seems frankly uninspired, seemingly going little further than adorning the old town with flower pots and slapping a bit of paint here and there. Olvera has its own official tourism website which is fittingly blank http://turismolvera.com Regionally and nationally, efforts to promote tourism seem to be equally parochial and archaic. I had a flick through the latest government report from the ministry of tourism, which was lamenting the demise of Thomas Cook and boasted of strengthening ties with the airline industry. To be fair I suppose, they didn't see Covid was going to come along and upset the apple cart. Elsewhere in the report though, there is a heavy emphasis on ecotourism and one gets the impression they are trying to attract a 'certain class' of client with a preferred profile. This is evidenced in the official Instagram feed of the Spain's Tourist board @Spain where images of cathedrals and churches outnumber beaches by about ten to one and gastronomy, nightlife or even wildlife pics are near non-existent. It's almost as if they are purposefully trying to attract the sort of tourists who do a lot of brass-rubbings!
 
My mission here today isn't to totally trash the Spanish tourist industry, but I would like to drop an idea their way. I did so at the end or the survey when they asked me for any other thoughts and I shall relay what I told them here. (Sorry to regular readers that I'm rehashing an idea I put forward in an earlier blog post but I think it's perfectly OK to plagiarise myself in the promotion of a valuable idea!)
 
The EU has in sight the phasing out of the internal combustion engine. Diesel engines are set to go by 2030 and petrol will probably go soon after, possibly as early as 2035.  (https://www.transportenvironment.org/news/end-fossil-fuel-car-eu-agenda)
 
This means that road traffic by tourists from northern Europe will be transitioning to electric over the next ten to fifteen years. 80% of tourist traffic in the past has been by plane, however Covid has decimated the air industry and the future of fossil-fuelled flight is almost as precarious as that of the petrol engine.
 
If however you try to map a route to drive an electric vehicle though Spain today you will find your journey is dictated by the paucity of charging stations in rural areas. Overlay the charging stations on a map of Spain and the image resembles the wheel of a bicycle. There is a dense hub in Madrid in the centre, then a fairly dense ring around the cities and towns in coastal Spain. In the interior of Spain is like an electric desert. 
 
One could argue that this will improve organically as the number of EVs sold in Spain increases over time. It seems to me though that the essences of attracting tourists, especially to a small town like Olvera, is by providing the transport infrastructure they need. If we had a Tesla Supercharger in Olvera it would be the only one between Madrid and Malaga. Imagine how many affluent northern European Tesla owners would see the charger on the map and plot a route to head through here on their way to the coast. Until another charger appeared somewhere else in this electric desert, this would be practically all of them!!
 
This is the way towns grow. My home town is Surbiton in Surrey. Before 1838 it was little more than a hamlet, at least compared with the neighbouring town of Kingston-upon-Thames. Kingston was an important stop on the route from London to the naval base at Portsmouth back in the day when Britain ruled the waves. As such, it had a well established and lucrative coaching house industry. When it was proposed that a newfangled railway line from London to Southampton would be running through Kingston, the coaching industry were up-in-arms that they were going to lose trade, so lobbied the council to reject the scheme. The line was instead re-routed through Surbiton. A station was built there in 1838, from which the South London commuter belt grew. The town never looked back. ( Source https://en.wikipedia.org/wiki/Surbiton#History )
 
I have heard that attempts to install charging stations in rural towns in this part of Spain have met opposition. I don't know for certain but it wouldn't surprise me if this came from petrol station owners who are worried about losing trade. I hope not. I hope they see the future belongs to renewables and don't use their influence at a local level to discourage the development of the economy of towns like ours. As I mentioned in the blog post Spain's Problem With Rural Depopulation ( http://andaluciasteve.com/spains-problem-with-rural-depopulation.aspx ), towns like Olvera need every bit of help they can get to stay afloat. We should be lobbying like crazy to make Olvera an 'Electric Vehicle Friendly' town. Opinion!
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Posted by Steve Gould Sunday, October 4, 2020 2:13:00 PM Categories: Andalusia Economy electric vehicles Envrionment Spain Spanish Spanish culture Sustainability technology
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Making money in Spain

The hardest thing about moving here is the income problem.
 

I wanna job in Spain and basically need to know if there is work out there for me, I’d do anything I just wanna move for the sun.  Please help!!

 
The above quote was a genuine question asked a few weeks ago on an online forum for 'expats' in Spain. I kid you not that I see these sort of requests all the time. 
 
Sifting through the three hundred or so replies reveals an interesting snapshot of people's experiences of having moved here in search of work.
 
"Most men get off the plane and become builders, while women become cleaners and dog sitters" says one.
 
"Learn Spanish". says another, "you'll improve your chances of finding a job no end".
 
There was quite a long thread about teaching English in which one camp said it was dead easy to get a TEFL certificate (Teach English as a Foreign Language) in order to get a job teaching the queens, where as another camp were saying the language schools were in decline and rejecting applicants with the cheaper certificates earned on line, preferring instead the residentially earned certificates of schools perceived to be of higher value.
 
Curiously nobody mentioned becoming an estate agent, which many do. This can be a ludicrously easy way to make money in a bull market, but as I found during the last recession it's not much fun when you go over a year without selling anything. 
 
Generally most commenters agreed that it is hard to find work in Spain. As one chap said, "it helps if you have a lot of money to support yourself while you're looking for work as it can take some time".
 
In my humble experience, I've found the the main problems are the language barrier, the extremely high unemployment rate of the country as a whole and the fiscal system here which seems deliberately to act against people starting up their own businesses.
 
Not speaking Spanish, or speaking it very badly as I do, severely limits one's ability to find a job with a Spanish company. That means people coming from the UK will struggle to find employment in inland areas where English is not so widely spoken. This less of a problem on the Costa Blanca or Costa del Sol where English is more common. A nephew of mine worked as a waiter in Fuengirola for six months without speaking a word of Spanish.
 
I knew a young Spanish girl years ago who confided in me the dark secret of her employment status as an office worker. I think her hours were nine until two then five until eight. She had a contract with her employer who officially declared that he was paying her 800 euros per month, and so he paid her employer's contribution towards the equivalent of her tax and national insurance contribution based on the sum. In reality he only paid her 400 per month in cash though. I was astonished she worked all those hours for so little take home pay, but she explained to me it was hard enough to get a job at all. Getting one that paid her stamp and had her plugged into the system was a big plus compared with many folk here who work cash in hand and cannot afford to go self employed.
 
From what I've seen, one has to be rich in the first place to go self employed in Spain. If you want to set up the equivalent of a limited company you need to prove you have 5000 euros in the bank. The contribution to the health and welfare system here known as 'autonomo' is a big chunk. It was a shade under 300 euros per month last time I looked, though there is a scheme now to pay much less in the first year of trading. VAT starts from the first euro earned if your business is dealing in rateable goods or services. Income tax is even more full of pitfalls for the unwary. One chap I know told me his accountant advised him to use a system where he paid a quarterly sum on his predicted earnings. Half way through the year he lost his contract and still had to make the two remaining tax payments for the remaining quarters.
 
Worse still, the tax office or 'hacienda' is so grossly avaricious. It has the power to monitor your bank account and grab money out of it as it sees fit. One chap I knew stopped trading but didn't inform the hacienda. Some years later he found they had taken 6000 euros from his account for unpaid taxes. It took a devil of a job to get it back. The hacienda clearly has an army of spies. For an interesting insight into how they operate, read the recent article in El Pais (In English) called How the Spanish Tax Agency followed the trail of Shakira. They left no stone unturned, even to the fine detail of  tracking down details of her hair-dresser and Zumba teacher!
 
Elsewhere the hacienda has its beady eye on your private sales. If you flog stuff on websites like Ebay, Etsy, Facebook Market place etc, they want a chunk of your profit. How this works exactly varies from region to region but typically in Madrid, sales of over 500 euros are subject to a 4% IPT (transaction tax). I've read where they have had tax officers trawling through listings trying to identify sellers. More recently talks have been taking place to make the websites to supply transaction details to the hacienda digitally. Being a cynic, I suspect when they do, the minimum sales on which these taxes apply will be decreased!
 
Perhaps the most successful group of people I've come across in Spain are the ones whose work is not, i.e. people who work remotely. If you have the right skill-set and the right contacts it is possible to have the best of both worlds, e.g. an American sized pay packet with a Spanish style cost of living. Finding such work is not without its problems as there is a very broad base of people in all corners of the world competing for remote jobs. Websites such as Freelancer and Fiver allow one to pursue work in a wide range of countries but the downside is there is a mountain of competition from all over the world, so bidding for work is more often than not a race to the bottom. It is almost always preferable to seek work by personal contact, word of mouth, networking etc. 
 
Disclaimer. I'm not an expert on Tax or Employment law or any of the topics mentioned in this blog post. These are just the rantings of someone who has lived here for fifteen years and seen the work situation up close and personal!  Nor am I selling anything so I have no skin in the game (which is probably why my postings are a little less 'ra ra' than you might read elsewhere!!)
 
 
 
 
 
 
 
 
 
Posted by Steve Gould Sunday, September 20, 2020 9:58:00 AM Categories: Black money Economy lifeskills Spain
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Spain's problem with rural depopulation

Solutions for small towns with an exodus of people

 

I mentioned in a previous blog post (the Gargoyle Folk), that I'd been lucky enough to cadge a ride with a local vet into the wild mountains of Albacete while he visited remote farms to inspect their goat herds. One of the eye-opening revelations of this visit was that one of the farmers offered me a house for 8000 euros. It was a big house and not in a bad state of repair! The problem is that it was so remote it would have been difficult to live there. How folk survived there in the old days before cars is quite a mystery to me. This smallholding was about an hour's drive from the nearest petrol station or anything resembling a shop!
 
Another town I visited near Hellin was in obvious decline. There were signs that it had once been a bustling place, with a town square, fountains, and some quite impressive public buildings that were now abandoned. There was a general store come grocers but that was about it. My guide explained to me that everything the townspeople need now is brought in on wheels, gas bottles, bread, green-grocers, even a mobile pharmacy visits the town on certain days. All of the public services once enjoyed by the town had gone and the town hall had closed. Even the school had closed since there were no longer any children. Most of the few residents remaining in residence were pensioners. The town was a victim of a phenomenon known as rural depopulation.
 
This comes about for a number of reasons. Clearly in the past, Spain had a labour-intensive, agrarian economy. With the advent of machinery and modern intensive farming techniques, the demand for labour reduces, so technological unemployment is a factor. Young people are more avaricious than in the past, lured by film and TV their horizons are widened beyond the humble life of agriculture and farming. They are drawn to life in the city with better wages and prospects.  Gradually the population ages, the town hall's ability to raise revenue decreases, and the value of property and land depreciate. There comes a point when the town ceases to function economically. It simply dies. 
 
While this is not a phenomenon unique to Spain, (parallels can be seen across all of Europe, even the UK), there is something particularly eerie about dead Spanish towns which may be to do with the hot dry weather. As you may have seen with old Spanish farmhouses decaying at the roadside, there is an epic quality to the crumbling ruins which in other countries might be camouflaged into the landscape in a covering of moss and plant growth. Not so here. Ruins tend to stick out like markers in time, poignantly reminding observers of a once-great past. There is a phrase used here to describe such places: La España vaciada – “the hollowed-out Spain”
 
An article in an online newspaper caught my eye in 2017 which claimed four out of ten villages in Malaga province had experienced such a decline in population over the last decade. Some of these are towns I know. The article doesn't offer any solutions though it does highlight some of the contributing factors as poor communications and inadequate utilities such as electricity supply and water treatment plants that are lacking in towns with small populations. 
 
Solutions are being investigated at regional and national levels. Spain recently created a new ministry to address the problem which is a growing issue in all parts of the country.  Also, the Guardian recently related a story about an NGO, the Towns with a Future Association, which is working to match depopulated areas with migrants in search of a new life in rural Castilla-La Mancha, citing the arrival of families arriving in the region to escape poverty in Valenzuela.
 
My feeling is the problem won't be fixed without incentives. As I mentioned in a Facebook post in 2017, if it was up to me I'd give the villages free fibreoptic internet and incentives in the forms of tax relief and grants for local people to create global-reaching cottage industries. The opportunities to sell locally based products of everything from espidrils, leather sandals, wicker baskets and those cute flamenco chairs to sought-after agricultural and religious artefacts remain largely under-exploited in a place and time where such manufacturing skills are dying out through lack of local demand. As someone commented, this should be done 'without  burdening them with a 270 euro 'autonomo' bill before they even pick up a handful of clay or a bodkin'.
 
Tourism also plays an important role. In the North of England, York is a vibrant, thriving town, in part because it is a popular tourist location. Ten minutes drive down the road there are umpteen towns in decline because they lack the very popularity with tourists that York enjoys. One of the reasons I feel 'safe' living in Olvera is that our 12th century castle and massive 18th century church will always draw tourists. Every village here has in my view, an important duty to make the most of its tourist identity. There are things of interest in every town I've visited in Spain, though sometimes one has to dig deep to reveal their stories. Towns should be shouting these from the roof-tops.
 
One final thought. Olvera and any other town seeking to attract passing tourists should be doing everything in their power to attract and incentivize the installation of charging stations for electric vehicles. The last time I looked, these are mainly clustered in big cities like Madrid or in coastal towns. There are hardly any in rural locations between say, Madrid and Malaga. If I was a German holiday-maker planning to drive down from Berlin in my Tesla, I wouldn't want to have to drive down through Barcelona and around the Mediterranean coast because my GPS software planned the route according to where the EV charge stations are, I'd want to drive down direct through Madrid to Malaga via the shortest route. However this is barely possible at the moment. If Olvera had a charge-point, the growing number of tourists driving electric cars would be able to choose to make a required stop in our lovely town. 
 
This sort of thing is not without historical precedent. I was born and bred in a town in the South of London called Surbiton, part of the borough of Kingston Upon Thames. Kingston was a grand old town mentioned in the doomsday book, and it grew as an important stopping point for travelers from London to the naval port of Portsmouth. From the 15th century onward, Kingston built a significant coaching-house industry. During this time Surbiton was little more than a hamlet surrounded by fields. In the early 19th century, a new Railway, the London and Southampton line was proposed to run through Kingston, however, the plan was rejected by Kingston Council, who feared that it would be detrimental to the coaching trade. They really shot themselves in the foot! The line was re-routed to go via Surbiton, where a new station opened in 1838. As a result, Surbiton profited and became one of the first towns in London's commuter belt. Kingston attracted a branch line in 1869 which is all it has to this day whereas Surbiton is a now major mainline station connecting London to the South Coast. This example serves to illustrate why transport infrastructure is crucial to a settlement's growth and why the placement of charging stations for electric vehicles could be a key driver in reviving the fortunes of rural populations in inland Spain.
 
 
 
 
 
 
 
 
Posted by Steve Gould Sunday, August 16, 2020 1:03:00 PM Categories: Economy electric vehicles Spain
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Marketing Memories from the UK to Spain

Fondly remembering the days when marketers used to give stuff away!
 
Kids like me who grew up in the 1960s probably had one advantage over all generations of children before or since in that we were the greatest beneficiaries of the boom-time of incentive marketing. If you were born any earlier the economy wasn't quite so strong and so marketers were being a little more thrifty and if you were born a little later, well the bean counters kind of took over and clamped down on frivolous spending. But for about a decade and a half there was a period of unparalleled abundance where marketing folk were showering us with freebies.
 
My memories might be filtered through rose-tinted spectacles but I seem to remember pulling into a garage with my sister to buy petrol and coming out with armfuls of stuff. I got to choose whether we filled up at Shell or Esso according to which promotions were going on at the time, be it aluminium coins minted with the faces of the players of the world cup squad, to WWF sponsored 3D pictures of wild animals - I got the full set of those! We aquired so many free mugs that dad had to put a new shelf up!
 
These were the days of green shield and co-op stamps. Loyalty was a big deal and made shopping fun. Everywhere you went had giveaways of one sort or another. My dad built me a go-cart and before it was finished I'd covered it with stickers for Castrol and Motorcraft a relative had kindly picked up for me at the Earls Court Motor Show. Mum came back from the Ideal Home exhibition one year with two carrier bags stuffed with giveaways. It was an exciting time to be alive.

Somehow it all came to an end. I can't put my finger on when exactly. It may have been the economic mayhem of the 70's with the oil crisis or later Britain being so strapped it had to borrow cash from the IMF. Maybe it was the rise of Thatcher and a political class who knew the price of everything and the value of nothing. I just remember going into a petrol station one day and seeing a promotion for a model Ferrari. I forget the exact nature of the deal but one had to collect enough coupons to give you the privilege of being able to buy it. The giveaways of my youth had given way to a vulgar catchpenny. I felt a chill in my heart, though I pocketed the coupons in case I changed my mind (I didn't).
 
That seemed to be the end of the line for free stuff. From then on if I saw anything that looked free it generally had strings attached if I looked closely enough. Some Madison Avenue executives had decreed marketing's freebies were now merchandise. Incentive marketing was dead. RIP. Then I moved to Spain. It was like stepping back in time. Suddenly I was in an agricultural community where everyone seemed to be wearing sponsored straw hats and T-shirts. It was heaven, but the best was yet to come.
 
I'd befriended some neighbouring farmers who belonged to the local co-operativa. Co-operatives are common in agricultural areas of Spain as they enable farmers to collaborate and get better deals on their produce. One day they said there was a coach-trip being organised to go to a trade show and they asked me to come along. It was free and a great opportunity to practice my fledgling Spanish so I said yes in a heart-beat.
 
The day came and we boarded the coach. It reminded me of the British Legion charabanc trips to Littlehampton my parents used to take me on when I was a kid, but instead of crates of beer being chugged it was botas of red wine! These are the wineskins that one holds overhead in order to pour the wine into the mouth, an aquired skill which I clearly lacked.  I was the only one stepping off the coach with red wine stains all down my T-shirt, much to the amusement of everyone aboard! We arrived at a big exhibition center in Torre Pacheco which reminded me of Earls Court in London. For about an hour or so we wandered around the exhibits. I mounted cabs of tractors and reverentially inspected chainsaws so as to feign some knowledge or interest in such matters in order to justify my presence to those who may have correctly surmised that I was really only there for a free lunch! 
 
Gradually we meandered to the end of the hall, exiting into what was the largest seated outdoor dining area I had ever seen. It hadn't dawned on me until that moment, but this event must have been the annual outing for all the co-opertivas in the province of Murcia, and there were clearly a lot of them! I counted the tables and worked out the number of covers was about 5000! There were articulated lorries coming and going with all the food, which was being brought to the tables by a small army of waiters and waitresses. At the end of each table was a container of ice-water the size of a plunge pool, full of beer and cans of soda to which one could help oneself. 
 
The President of the Region of Murcia was in attendance, so I can legitimately claim to have dined with a President! The food was top-notch and it kept coming all afternoon. The event was sponsored by a number of national and regional banks, La Caixa, BBVA, Banco Popular etc all of which seemed intent on out-doing the other, both in the number of posters on display and later in freebies given out. I copped for some pens, key-rings, the obligatory straw hat and a jolly smart ice-box courtesy of the CAM bank. As the alcohol flowed, speeches were made, presentations awarded, then there was a huge raffle, which I think was done by seat number. Well it seemed to go on for hours. I've never seen so much stuff given away. From plasma TVs to George Foreman grills there were hundreds and hundreds of giveaways. It was a 1960's incentive-marketer's wet dream!
 
This event took place a few years before the 2008 crash. I seriously doubt in the wake of it that events like that take place anymore. The bank behind my ice box (and my mortgage) the CAM went belly-up and were sold to Sabadell for a euro. Doubtless the bean counters have since stepped in to put a stop to all the fun, but I fondly remember that one sunny day in June that was for me, the Zenith of incentive marketing.
 
 
Posted by Steve Gould Sunday, May 24, 2020 1:50:00 PM Categories: Economy Incentive Marketing Marketing Spain
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Why isn't the world worshipping Elon Musk?

Some thoughts the Tesla/Space-X boss.

 

We all know who Elon Musk is, Tesla, Space-X yada yada, yet he seems underrated by the press and positively despised in the comment section of tabloid newspapers. I'd like to address that here by highlighting some of his thought processes. Normally I aim to blog about 1000 words for a nice bite-sized read, however to cover Musk's brain in such limited space will be a zesty challenge so please forgive if I overrun!
 
Musk is seen by some as a nutcase who smokes dope on the Joe Rogan show, makes unfortunate Tweets about the 'pedo guy' and who got into a very public altercation with rap artist Azealia Banks about acid-taking etc. Only last Friday (1st May 2020) he made a seven word tweet that devalued Tesla stock by $14 billion dollars. Yet despite his maverick social media profile he is capable of thoughts of the loftiest brilliance.
 
I can't for the life of me remember where I originally read it (and I've been unable to find a source - doing a weekly blog doesn't allow as much time to research as I'd like), but the thing I first heard about Elon Musk that really impressed me was the simple idea he had to validate the ownership of bank accounts for use with PayPal. I was a web developer back in the 1990s involved in building e-commerce websites. We used to do them from scratch in those days before generic e-commerce platforms had matured, so I was familiar with the problems involved in taking and making payments online. Systems soon evolved to take payments by credit cards since the card companies had a more modern infrastructure, expiry dates, CV codes etc. Banks however, with their systems rooted in the dark ages had no way to validate the ownership of an account online. Say a client sent you an email with his bank account and you needed to send him some money for the exchange of goods, how did you know the bank account was actually his and not that of some hacker? 
 
Elon came up with the simple yet brilliant idea of paying two micro-payments to the account, say $0.34 and $0.83. The client had to read these numbers from his bank statement and enter them in the PayPal website. Musk had therefore generated the equivalent of a PIN number to verify the account. At first I thought how dumb, to give money away to verify a bank account, but as I thought more about it I realised it was genius. The two numbers would never cost PayPal more than $1.98, an expense which would easily be offset by the reduction in fraud and that would enable PayPal to transact directly with bank accounts, which had much cheaper transaction costs than anything else. You could for example send cash via say Western Union, but then the Western Union agent, usually the post office, would need to be paid to validate the identity of the payee by physically checking the passport which is a costly process in comparison. So from then on, I hailed Musk as a genius capable of conceiving ideas the like of which I could not. 
 
PayPal was not even Musk's first multi-million dollar venture. He'd already founded an online city guide, Zip-2 with his brother Kimbal in 1995 which was sold in 1999 with Musk getting $22million for his 7% share. Prior to that, while in college, Musk has spoken about his musings on the essential matters which would most affect the future of humanity and came up with five things. These were:
 
The Internet
Sustainable energy (both production and consumption)
Space exploration (more specifically the extension of life beyond earth on a permanent basis)
Artificial Intelligence.
Rewriting human genetics
 
Clearly the guy thinks big. Unlike other students with big ideas however, Musk is realising them one by one. With the founding of Tesla in 2014 Musk helped create the first successful new car manufacturer in America in over 90 years. Right now, as CEO, Musk is on the verge of winning a 3/4 billion dollar remuneration payout as part of compensation plan that depended on the company achieving a six-month period of $100 million dollar market capitalisation. This would make him the most highly paid executive in US history. The incredible thing about this is that when Musk negotiated this contract, such a target was unthinkable. The company was only worth $60 billion at $250 per share back then. Musk made it happen, even though he's a part-timer dividing his hours between several other companies. The other somewhat unsung truth about Tesla's success is the way it is transforming the automotive industry away from the dealership model that has pervaded for over a century to a direct model where cars can be bought online. The low maintenance of electric vehicles is also challenging an industry that fed off consumers need for servicing and repair. Musk doesn't just compete in a market, he smashes it to pieces.
 
Musk also heads Space-X, the rocket-company he founded in 2002. In case you've been living under a rock, Space-X has been successful too, winning a number of private and public US defence contracts. By making as much of his rocket technology as reusable as possible, he has undercut the price of all competition for launching satellites. Musk has said many times he sees the future of mankind as multi-planetary. The idea is that by sticking only on planet earth, mankind could (in fact probably will) succumb to some sort of extinction event. Only by having colonies on other worlds can the human race escape such events and survive into the future. This is a lofty goal but one which Musk is edging towards. Again, one of the things that most impresses me here is how Musk is funding Space-X. One of the key planks of the strategy is the Starlink Internet programme, a network of satellites designed to bring Internet connectivity to all parts of the globe. As well as the much publicised plan to bring affordable Internet to poorer countries in Africa and so forth, Musk has another trick up his sleeve. The satellites will exchange data using line-of-sight lasers. Because space is a near vacuum and there is no medium in space to slow the light signals down, transmission of information will be even faster than the fibre optic cable used on the ground. This lack of latency is expected to be of extremely high value to certain commercial sectors that depend on timely information such as stock brokers. The premium service is expected to provide big bucks for Space-X to fund its future developments.
 
Somewhat crazily, these achievements in themselves would be remarkable enough, yet Musk continually applies his brain to disrupt other industries. Tesla's energy grid batteries are beginning to change the way electricity companies handle the storage of electricity, while boosting the future of fledgling solar and wind-power industries. The Boring Company is set to revolutionise travel by establishing a tunnel network that promises to reduce congestion and journey times. Tesla has recently entered the car insurance industry. By using the data from its own network of cars, Tesla can fine tune risk assessments allowing it to offer insurance at up to thirty percent less than its competitors who themselves are tentative about insuring Tesla automobiles because they have only been on the roads for a decade so the old school actuarial data they use is insufficiently mature. Neuralink is Musk's foray into the world of medicine, developing high bandwidth brain to computer interfaces. He also founded and Artificial Intelligence organisation called Open AI. (He's done all this and yet I have trouble finding something to blog about once a week!)
 
Doubtless in all these other industries, Musk has probably figured out the way to get them to pay for themselves, and has envisaged a sneaky way to undercut competition leading to a big disruption in an existing market.
 
The thing that most impresses me about Musk is that his innovations, which drive market change and arguably the direction society is taking, all take place from within the private sector. I'm a dyed-in-the-wool lefty who believes at some level, the state should be planning the future of society through policy, either with a totalitarian boardroom strategy like China or with a presidential "let's get man on the moon" approach like Kennedy. Musk is proving to me that isn't necessary. He's teaching this old dog (and many like me) new tricks! 
 
Posted by Steve Gould Sunday, May 3, 2020 5:26:00 PM Categories: Africa Dreams Economy Envrionment Philosophy politics Sustainability Tech technology thinking Thought
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Fruit picking, a personal perspective.

Thoughts on fruit picking of an ex-pat whose ancestors were agricultural labourers for three centuries.
Fruit picking, a personal perspective.

One of the consequences of Brexit often visited by the media is the future of fruit and vegetable harvesting. The reporting comes in two stripes. The anti-Brexit media report the downsides of course. In a nutshell the 'hostile environment' created by the Tories towards foreigners and Brexit uncertainty has deterred immigrants from EU countries filling the seasonal vacancies in the industry. There are many reports of fruit rotting on the ground and farmers fearing they will be driven out of business completely or forced to relocate abroad. Then there is the Brexit positive media who claim this is all scaremongering. They report on the job opportunities for picking fruit in Britain soaring e.g. "£700 per week job boom" says 'The Sun'. Another common theme in the pro-Brexit media are reports about the development of fruit and veg picking robots, so clearly there is a fall-back in case Britain's youth don't care to relocate to a field in East Anglia to pick strawberries in July.

I've never picked fruit commercially myself. Well I owned a small-holding in Spain for a couple of years but apart from trading several tree-loads of olives to the local co-operative in exchange for virgin oil, I never sold anything, nor was I paid.
 
However that wasn't the norm for my ancestors. A friend of mine who is a whiz at these things came to stay for a few weeks and her parting gift was a family tree going back to 1740. For generation after generation my forebears were agricultural labourers.
 
I knew my grandfather was a farm labourer but not that the entire stock of my family were so as well, male and female. All lived and worked in the same village, Froxfield Hants for centuries. Grandfather Alfred though was a little different. He moved where the work was, over some considerable distance.
 
My father Edmund was born in Tolworth, Surrey in 1908. He told me he didn't see his father very often when growing up. Alfred did seasonal work which meant he was away for much of the year. One month he would be hop-picking in Kent, another harvesting turnips in Suffolk and so forth. Money was good when Alfred came back and my father and his seven brothers and sisters ate well. However one year, Alfred did not return. This was before the welfare state remember, there were no benefits to take care of single mothers with eight children, so the siblings who could work did, while my father and his younger brother George were found a place in Bizley Farm School, a charitable institution for borders, where the children would tend crops, manufacture wickerwork baskets, produce honey, cheese and so forth all of which was sold to pay for their farm education. 
 
Dad also picked fruit but he did so to survive. In good old Dickensian manner, the children at the school were largely fed on bowls of gruel, apart from Easter when they were treated to a boiled egg. My father and his friends therefore foraged in the countryside scrumping whatever fruit and veg they could find. They would trap birds, game, pigeons etc. A particular favourite was a hedgehog rolled in mud and cooked on a bonfire. It is a sobering thought that this is not a fairy tale from long ago - this is the real story of my father and these events took place less than a century ago.
 
Anyway, I didn't think too much about picking fruit again until in 2003 when my wife and I moved to Spain. We bought a country house in a small inland village in the north west of Murcia which is very much an agricultural economy. We became friendly with many of the local farmers and after a time, a picture of the black economy emerged. Fruit picking is obviously an activity where time is of the essence. As a crop is about to ripen, people have to be there in numbers not required throughout the rest of the year. In a somewhat 'backward' area of Spain at this time (by which I mean few people had email), there was an unspoken seasonal tradition. Come say, June, the apricots would ripen. A convoy of battered cars would arrive full of itinerant fruit pickers as if out of nowhere. At six in the morning the 'workforce' would gather at a point on the edge of town, and farmers would haggle to get the amount of workers they need at the lowest price. These people were working in black money so they would invariably earn below minimum wage, perhaps two to three euros per hour. After a twelve hour day in the blazing sun the workers would return to their cars, which were normally parked near the river where they could bathe and wash their clothes. This is tough work too. An Ecuadorian woman of my acquaintance appeared one day with her hand in a sling. When I enquired she said she had slipped from a tree and sliced off her little finger. She shrugged and said live goes on, explaining she needed return to work quickly to continue sending money back to her family.
 
As far as I could gather, the itinerant labourers in Spain have a similar lot to my grandfather. They move about, not just in Spain but in other EU countries, providing work where it is needed, often (mostly as far as I could see) in black money. There seemed to be a mix of Moroccans, Bulgarians and South Americans, all of whom had the common thread of being so far down the food chain they never get out of the black money trap.
 
However I have since seen another class of migrant workers in Spain with much better terms and conditions. Indigenous Spanish who are already in the system get much better 'gigs'. I knew a builder, a very industrious chap called 'ni' (short for Antonio) who would go to Switzerland each summer picking grapes, for which he got good money, stamp paid for etc. I understand that the building trade is quiet in Spain during the summer months so this is a popular way for workers who would otherwise be picking up unemployment to get some good money in. Now the Spanish unemployment money is not bad anyway so for this to be the case I reckon the Swiss money must be pretty good. I've heard of similar schemes where town halls in Spain organize groups of people to go fruit picking in France and Italy, again on legal money that is high enough to make it worthwhile. One woman told me she will be doing three months at 3000 euros per month and she will be taking most of that home. 
 
What these subjective, personal and somewhat random observations suggest to me is the future of the farming of fruit and vegetables in Britain is this. With Britain leaving the EU I see it as unlikely that the lot of fruit-pickers in Britain will get any better. On the 19 December 2019 the Johnson government published a revised version of the EU withdrawal agreement which no longer contains clauses on the protection of EU-derived workers’ rights. Robots aside (fruit picking robots are a long way from being viable), a demand for fruit pickers (which has apparently gone from four fruit pickers to each job to four jobs for each fruit-picker) will inevitably drive up wages, so I doubt the British supermarkets will accept the corresponding increase in the price of produce required by farmers for their operations to remain profitable. There are therefore two ways this could go. Either the government will takes steps to make the environment for the unemployed so unpleasant that they will be induced to chase low paid agricultural work to avoid starvation as my ancestors did, or alternative suppliers to British farms will fill the void on the supermarket shelves. The countries that may gain the most out of the latter are non-EU countries with low labour costs that are not the other side of the world and have climates that suit agricultural production. The British government has already had preliminary talks with several North African countries such as Morocco, Algeria and Tunisia and these may well be smart places for investment in a post-Brexit economy.
 

 

 

Posted by Steve Gould Sunday, January 12, 2020 11:49:00 AM Categories: Africa Black money Brexit Economy politics Spain
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