Journal articles on the topic 'International business enterprises – Zimbabwe – Taxation'

The problem of pricing is elaborated with respect to setting the tax base for calculating tax obligations (taxes and duties) assessed and paid by business enterprises by the general tax system. The role of the regular market price when calculating the tax base for national taxes (profit tax, value added tax, excise tax and tax on incomes of physical persons) is highlighted. It is shown that valuation of assets (property rights) is the process of estimating their cost on the date of valuation by the established procedure. The valuation can be performed by entities charged with valuation (legal entities, physical persons – entrepreneurs, state power bodies or local power bodies). Subject to valuation are assets (movable and immovable) and property rights (e. g. intellectual property rights, rights for use of nature resources etc.). The cases of obligatory expert valuation of assets are clarified in the course of the study; the valuation phases are substantiated in conformity to the national standards on valuation of assets and property rights. The notion of transfer pricing, occurring in time of transactions involving residents and non-residents that are subject to control by tax bodies in order to combat minimization of income tax, is defined. Economic transactions with a non-resident counterparty are identified as controlled ones by a payer of profit tax, when their result has no effect for a taxation object. An economic transaction will be identified as a controlled one, when it complies with two criteria set by the Tax Code of Ukraine: cost criterion (the volume of annual income and the volume of transactions with a counterparty) and status criterion (what is non-resident, whether or not it is related with a Ukrainian tax payer, where it is registered, what is its organizational and legal form, whether or not it pays profit tax and by what rate). The controlled transactions are subject to audit for the compliance of their prices with “arm’s length” principles, with the possibility of adjusting a transaction price for purposes of profit taxation in case of noncompliance. International and national law establishes five main methods for price determination in the controlled transactions. The choice of method and texted party depends on the essence of transaction and the character of its parties’ interactions. The article gives a description of methods for calculating transfer prices used by tax bodies for auditing the correctness of estimated profit tax in the controlled transactions. The authors believe that the top one is the method of comparative non-controlled price, because it can be used when performing transactions on sales of goods with mass-scale demand, for which it is easier to find the data on analogous transactions of other companies on the commodity market and compare the conditions of such economic transactions.

Agriculture is one of the main branches of the national economy of Ukraine. Accordingly, the logic of accounting rules, connected with the objects of this branch, must be based on the national interests. However, this statement is not always performed. Today, between the national and international accounting rules of biological assets and agricultural products, as the main objects of accounting in agriculture. there is a certain dissonance. It concerns the order of their assessment and affects the taxation of agricultural enterprises. The aim of the article is to highlight those consequences which the valuation of biological assets and agricultural products has for the agrarian enterprises, with its influence on their tax load and the financial situation in general. During the process of researching, a chain of considerations about the tax aspect of the motivation of propaganda of the valuation of the biological assets and agricultural products of agricultural enterprises is presented. It is proved that such an assessment procedure is not profitable for local agricultural producers, because it creates additional financial burdens for them. This reduces their competitiveness and creates benefits for big business. On the basis of the negative impact of the estimation of objects of the alive economy at fair value on the financial condition of agrarian enterprises when they are in the system of taxation of income tax, a vision is expressed regarding the refusal of international rules of accounting of biological assets and agricultural products.

The rapidly growing informal micro and small-scale enterprise sector in Zimbabwe is an issue of concern because the government is still struggling to revive the economy from the effects of economic meltdown. Of main concern is the lost revenue through tax evasion. The growing informal sector is believed to be a result of the poor quality of certain institutions, high corruption levels in the country and lack of incentives to formalize. The objective of this study was to analyze the impact of growth constraints on the willingness to formalize by informal MSEs. Twenty internal and external growth inhibiting factors were analyzed using Principal Component Analysis (PCA) and a logistic model was estimated on a dichotomous variable of willing/not willing to formalize. The results show that willingness/unwillingness to formalize by informal entrepreneurs in Zimbabwe is significantly related to institutional imperfections and asymmetry of bureaucracy associated with the registration process, lack of access to technology, market and financial constraints and lack of entrepreneurial and management skills. Improving the bureaucracy of the registration process and access to technology may possibly increase the odds of the informal operators formalizing their businesses. However, improvement in market and financial constraints and entrepreneurial and managerial skills will decrease the odds of willingness to formalize.

Strategy formulation has traditionally been associated with large corporates (Damke, Gimenez, & Damke, 2018). The literature on strategy formulation is rich, but this literature does not capture the intricacies of small and medium enterprises (SMEs) in emerging markets (Ahmed & Mukhongo, 2017). The study aims to gain an understanding of strategy formulation practices among the SMEs in emerging markets, particularly Zimbabwe. The philosophy of interpretivism guided the study. The study adopted a qualitative case study strategy in which data collection was conducted through semi-structured interviews with 15 manufacturing SME owners/managers in Harare, Zimbabwe. The results of the study revealed that the majority of participants understand strategy formulation and are greatly involved in strategy formulation. However, the study revealed that strategy formulation is not logically and systematically done thus does not resemble the conventional textbook strategic formulation models. Theoretically, the findings revealed that strategy formulation in SMEs is both an externally (market-based) and internally (resource-based) guided practice. The study advises SMEs to balance professionalism and responsiveness when strategising, that is balancing the process perspective with the learning perspective. The study was conducted in one city; similar studies could be conducted in other parts of the world to find similarities and differences.

This article is devoted to the analysis of experience of the Russian Federation on the tax measures of support of economy in connection with COVID-19 pandemic. The tax measures of support of economy of Russia in the period of COVID-19 pandemic are analyzed. The study conducted a comparative analysis of the country's tax revenues for 10 months of 2019 and 2020. A significant decrease in tax revenues was noted, especially on the mineral extraction tax. The conclusion was made about the advantage of legal doing business for enterprises and receiving "white" wages for individuals — for example, against the background of a decrease in gross domestic product in 2020 compared to 2019, personal income tax revenues increased, which indicates that persons with official incomes turned out to be more protected. It was analysed how the pandemic had COVID-19 affected the country's tax policy, noted changes in the taxation of deposits and income on securities of individuals, changes in taxation in the field of mining and raising excise rates, revision of international agreements on the avoidance of double taxation.

This article reviews employee HIV and AIDS-related corporate social responsibility (CSR) practices by small business in Zimbabwe and South Africa. The article aims to present a comparative snapshot of how SMMEs are responding to the epidemic as a basis for developing a CSR framework that could be implemented by SMMEs in both countries. The article applies an exploratory literature review methodology to extract data from secondary sources. Research findings show that HIV and AIDS-related CSR in Zimbabwe appear disengaged from the direct influence of corporate business, the opposite of what South African SMMEs experience. In South Africa, SMME CSR practices experience pressure from large firms. However, differences in economic status between the two countries show no effect on the CSR behaviors of SMMEs in both countries when compared with each other. In both countries, findings reveal that SMMEs hardly establish HIV and AIDS policies and therefore rely on informal CSR practices to assist employees to deal with the pandemic in the workplace. Thus, the article submits that while HIV and AIDS practices are not formalized in both countries, SMMEs fulfil their epidemic-related CSR obligations towards employees’ corresponding with their smallness. In conclusion, the study recommends an empirical examination of the research question to establish a grounded recommendation for the development of a SMMEs CSR framework that could be implemented by SMMEs in both countries.

Zimbabwe’s state-owned enterprises (SOEs) have a significant role to play in providing service delivery for basics like electricity, health, water, transport and communication. With such socio-economic importance, it is imperative that any SOE should be, transparent, accountable, effective, efficient, profitable and sustainable. However, incompetent performance has stalked most of the country’s SOEs and the National Railways of Zimbabwe (NRZ) has not been an exception. It has been caught up with successive failures and forced to rely heavily on grants from government for its sustainability. This study sought to identify the challenges in the NRZ and suggest measures to solve them and sustain the entity. A descriptive research design was employed based on a critical review and analysis of extant literature. The information and data used in this study were obtained mainly from the audit reports, research and media reports on this enterprise. Issues of governance, accountability and transparency are examined. Polices in place for good corporate governance and monitoring meant to provide guidance, and sustainability are critiqued. In light of the challenges and gaps identified in running the NRZ, recommendations to revamp the system operations are given. A field for further research is suggested which could direct future management controls.

Purpose The sustainable skills that informal manufacturers use in volatile times remain poorly understood. This study explored the skills that the informal manufacturers used to navigate the uncertain business environment during the COVID-19 pandemic. Design/methodology/approach A total of 27 telephone interviews were conducted with informal entrepreneurs who were manufacturers of agricultural machinery at Mbare Magaba and Gaza home industry in Harare, Zimbabwe. Purposive and snow ball sampling were used to identify information rich sources. The authors used thematic analysis in identifying recurrent themes from this study. Findings The study results show that business agility motivated most informal manufacturers to restructure their business to sustain their operations. With the closure of formal companies, the informal manufacturers adopted slowing and narrowing loops through purchasing broken down agricultural machines for repairs or remanufacturing of durable machines for their low-income customer base. Most young and formally trained manufacturers adopted a prospector strategic behaviour as they used digital platforms to network with business associates for supplies, gathering market intelligence, making and receiving electronic payments and establishing virtual distant markets whilst the older manufacturers resorted mostly to a defender strategic behaviour of engaging their usual customers for repair jobs and a few referrals. Originality/value This study offers unique insights with respect to skills required for the sustainable and strategic management of small and medium enterprises during times of crisis.

In the last decade, significant review and change have been done regarding the taxation of profits from multinational companies. The OECD BEPS Action 1 is focused on granting additional taxing rights to jurisdictions where the customers of the service are located. This is because consumers add to the value creation process (prosumers), together with the company itself. Many enterprises do not have a physical presence at market jurisdictions because of the worldwide digitalization of the business process. With distant sales, they avoid sufficient taxation at the source countries. Multiple jurisdictions, businesses, and individuals provided various taxing rights allocation proposals. OECD considered some of them as possible ways to address the issue of under-taxation at market jurisdiction. This article evaluates the applicability of the OECD analysis of the value creation to the video games industry under the angle of differences and similarities between single-player and multi-player video games with social networks. This work is focused on the differences related to user participation and network effects for the value creation process. It explores the importance of the user participation and network effects for the value creation process of single-player and multi-player video games, to find if that respective taxing rights allocation should be different for these types of video game. It also analyses main proposals on taxing rights allocation, their applicability to the industry, and if these proposals acknowledge the differences in value creation based on the network effects of the video game. It was found that the existing proposals are not always consistent with the preparatory work on value creation analysis performed by the OECD and do not consider the named differences. The results of this work support the position that the proposals, including the most recent one, meet the existing urge for the taxing rights reallocation, but are mainly politically-driven and not always in line with the existing principles of international tax law.

In the last decade, significant review and change have been done regarding the taxation of profits from multinational companies. The OECD BEPS Action 1 is focused on granting additional taxing rights to jurisdictions where the customers of the service are located. This is because consumers add to the value creation process (prosumers), together with the company itself. Many enterprises do not have a physical presence at market jurisdictions because of the worldwide digitalization of the business process. With distant sales, they avoid sufficient taxation at the source countries. Multiple jurisdictions, businesses, and individuals provided various taxing rights allocation proposals. OECD considered some of them as possible ways to address the issue of under-taxation at market jurisdiction. This article evaluates the applicability of the OECD analysis of the value creation to the video games industry under the angle of differences and similarities between single-player and multi-player video games with social networks. This work is focused on the differences related to user participation and network effects for the value creation process. It explores the importance of the user participation and network effects for the value creation process of single-player and multi-player video games, to find if that respective taxing rights allocation should be different for these types of video game. It also analyses main proposals on taxing rights allocation, their applicability to the industry, and if these proposals acknowledge the differences in value creation based on the network effects of the video game. It was found that the existing proposals are not always consistent with the preparatory work on value creation analysis performed by the OECD and do not consider the named differences. The results of this work support the position that the proposals, including the most recent one, meet the existing urge for the taxing rights reallocation, but are mainly politically-driven and not always in line with the existing principles of international tax law.

China's oil and petrochemical industry is under administrative monopoly. Administrative monopoly, according to the Unirule Institute of Economics, refers to trade monopoly from concessions granted and the monopolistic power conferred by administrative departments through administrative documents on business entities—enterprises or administrative institutions that are also engaged in profit-making activities. Administrative monopolies come in various forms, including barriers to entry, special privileges and price regulation, which lead to multi-level monopolistic powers and status. The administrative monopoly in China's oil and petrochemical industry has evolved from the previous planned economy. Although the central government has the motivation to reform state-owned enterprises to increase revenue, which has been mainly from taxation, it lacks the impetus to break the administrative monopoly. This article shows that the barriers to entry form high monopoly prices and transfer the consumer surplus into business profit, which is unfair and distorts income allocation. After analysing the forms and origins of administrative monopoly in China's oil and petrochemical industry, the article demonstrates that administrative monopoly causes distorted factor prices, compromises fair trade, reduces efficiency and causes loss of social welfare and degradation of business ethics. This article also proposes judicial, administrative and market-oriented reform solutions

In Ukraine, the importance of small business for the economy and the need to stimulate it are being realized at the level of both the scientific community and public administration. The situation with the pandemic has complicated the conditions of functioning of small and medium-sized busines entities (hereinafter SMEs), but at the same time has justified the need to support it not only in the situation of collapse, but also as a matter of socio-economic stabilization and the prospect of reducing the unemployment rate. The status and conditions of SME functioning, its importance in various spheres of economic activity and in the labor market are researched. The emphasis is on modern trends in the functioning of SMEs, financial relations between the State and SME entities. A comparison of classification characteristics of SMEs was conducted in accordance with the Tax and Commercial Codes of Ukraine. The conditions of operation of small and medium-sized businesses on a simplified taxation system are compared. The latest legislative changes related to the stabilization policy of the State are taken into account. To identify the main trends of small business development, an analysis of the dynamics of the quantity, composition and structure of business in terms of its size, as well as the dynamics of the number of small enterprises and individual entrepreneurs by the largest groups in accordance with the classification of domestic economic activity in the country was carried out. The significance of SMEs in the employment structure is defined in the plane of enterprises and in terms of their size; the need to stimulate entrepreneurship in conditions of global instability is proved. A chronological analysis of the introduction of fiscal instruments for supporting the State in an emergency situation was carried out. In view of international experience, alternative quarantine preferences are considered as possible measures of the State support.

Subject area Entrepreneurship. Study level/applicability Postgraduate and undergraduate. Case overview The case study focussed on the dairy sector in the southern African country of Zimbabwe. It offered an analysis of the management and business development approaches DHL employed in the country’s dairy sector. The narrative detailed how DHL’s commercial performance progressively declined overtime. Several factors including operational inefficiencies, intensive competition, political, socio-economic issues and natural disasters were attributable to its decline. To mitigate DHL’s business development challenges, Antony and his top management’s reprised “restructure, expand and diversify” strategy only achieved inconsistent commercial results. The scale and size of these results unequivocally necessitated radical entrepreneurial methods to turnaround its fortunes. It was indeed a matter of entrepreneurial decisions! Methodology The case study used secondary analysis as its main strategy for generating relevant data. The rationale for adopting the principles of secondary analysis was to take advantage of quality archived data, public and readily available information concerning DHL’s commercial performance. Setting up to undertake secondary analysis for the purpose of DHL’s narrative was less-expensive, and it was less time-consuming when compared to structured interviews and self-administered questionnaires. Hence, it was deemed appropriate for producing a narrative on a company whose archived financial reports and publicly available research information were accessible. Relevant course levels DHL’s narrative is relevant for students studying entrepreneurship, business management and international business at postgraduate and undergraduate levels. Theoretical basis The multi-dimensional constructs of entrepreneurship and strategic management provided the theoretical basis for constructing a narrative about DHL’s business activities in Zimbabwe’s dairy sector. Particularly, the entrepreneurial decision-making paradigm offered some insight, direction and guidance in analysing the strategies Antony and his top management team applied in their planning and management at DHL. Equally, strategic management theories provided useful instructions for exploring business development issues in a rapidly changing business terrain that was presented by the dairy sector in Zimbabwe. Expected learning outcomes By the end of the lesson students will have had the opportunity to identify the features of an organisation with an entrepreneurial mind set; evaluate the importance of making entrepreneurial decisions in a rapidly changing market such as the dairy industry in Zimbabwe; explore the sort of issues faced by large enterprises in establishing an entrepreneurial architecture; develop an appreciation of the importance of practicing entrepreneurial leadership in rapidly changing business conditions; analyse the importance of developing an effective strategy while considering strategic options necessary to withstand markets such as the dairy sector in Zimbabwe that are characterised with rapid changes. Supplementary materials Teaching Notes are available for educators only. Please contact your library to gain login details or email support@emeraldinsight.com to request teaching notes. Subject Code: CSS 3: Entrepreneurship.

AbstractThe article deals with the development of a new model for taxing personal capital income and business profits incorporating elements of a (lifetime oriented) ACE system and of a traditional system of capital income taxation. This new approach adheres to decision neutrality at the enterprise level while taking into account both international competitiveness of company taxation and the requirement to meet the redistribution goal of the government. Neither a purely consumption based tax system nor the traditional tax system is capable to meet these requirements in a similar way. The distinctive core of the new system is that - according to the ideal approach of taxing lifetime income - notional interest on equity capital is deductible from the taxable profit of enterprises irrespective of their legal form. Interest income, dividends and capital gains received by individuals will be taxed according to a flat rate tax when they are withdrawn from their qualified bank accounts. Compared to the status quo, the introduction of the proposed tax system in Germany would make equity financing of investments more attractive. This could provide companies with the necessary cushion to survive financial or economic crises as they would be equipped with more equity capital.

The main focus of the study was to ascertain the potential of the informal sector to provide much-needed revenue for the government. It also focused on the challenges faced in informal sector revenue taxation and possible solutions thereof. The Zimbabwe revenue authority has maintained presumptive tax for the sector and subcontracting to the city of Harare for the collection of revenue from the informal sector. Despite all this, the industry still underperformed in terms of revenue raised. The study sought to find out challenges of taxing the informal sector, the potential of the informal sector, the effectiveness of the Zimbabwe revenue authority in taxing the informal sector, and possible ways of improving the taxing of this rampant sector. The study found out that there is great potential from the informal sector, but turning it into tangible gains has been elusive due to political interference, lack of proper infrastructure, unfair application of tax laws and general mistrust of the government. The study recommended that the government ought to play an active role by making sure there is the political will to make sure that players in the informal sector contribute to the focus in line with Adam Smith’s general principles which include fairness and equity. There is a need for staffing levels to be commensurate with the workloads and also the motivation of the employees. The research also recommended the adaptation of Information Communication Technology to ensure accountability and traceability of transactions in the informal sector as they move away from a cash-based system recommendation.

The most business entities in Europe are small or medium-sized enterprises (SME), which have a legal obligation to prepare financial statements in accordance with a set of accounting principles accepted in their country. Those statements are available to creditors, suppliers, and national governments but they could be badly understandable to creditors, suppliers and subjects in other countries. This is a great obstacle of their activities in the EU internal market. The existence of 27 different national accounting systems in the EU can be held for the most important obstacle.There are many ways how to develop compatible accounting standards for SMEs but the most significant activity in this field is the research project of IASB (International Accounting Standards Board). IASB has developed IFRS (International Financial Reporting Standards). Even though IFRS are suitable for all enterprises, their application in case of SMEs would be very expensive and could significantly increase compliance costs of taxation. This development has not been finished yet and there are still some problems which need to be solved before the introduction of accounting standards to the public. The research has shown that IFRS for SMEs should be used mainly by the entities which do not have public accountability – i.e. that its equities are not publicly traded and do not hold assets in a fiduciary capacity for a broad group of outsiders. This paper discusses those IFRS modifications, which should be done in case of SMEs.

The family firms (FFs), especially the small and medium-sized enterprises (SMEs), play an instrumental role in the economic spectrum of the Russian economy with respect to their contribution to income, output, and employment, ceteris paribus. The FFs not only contribute the domestic business activities but also make a significant contribution to international business. Ever since the launch of the mass privatization program (MPP) in Russia during 1992–1994 numerous disruptions on the business and economic landscape of Russia have emerged, and as a result, the FFs in Russia have been experiencing several new opportunities and challenges in the international market. However, it is noticeable that corporate regulatory, and corporate governance systems do not even clearly define the FFs. The current study explores the following research objectives. First, the motivation of internationalization of FFs in Russia; second, their process of internationalization, and third, the problems and challenges faced by the FFs. Different theoretical perspectives have been discussed to problematize and analyze the research objectives of the study. The current qualitative study is based on the semi-structured interview method. As many as ten FF entrepreneurs, representing five different industries, have been analyzed. The findings show that there is neither clarity nor unanimity of the very meaning and understanding of FFs in Russia. The lack of regulated bank credit and the existence of a complex taxation system dissuade the FFs from investing in new ventures and undertaking innovative activities. Similarly, the government’s directives to set up business operations at certain specified business facilities, at the exorbitant costs though, has created downward pressure on the profitability of FFs. Many FFs have initiated their international business activities owing to their growing linkages with the external contingencies, developed over time. Similarly, internationalization has increased the competitiveness of the FFs in the Russian domestic market too.

In applying the international principles to the taxation of Multinational Enterprises, one of the most difficult issues that have arisen is the establishment for tax purposes of appropriate transfer prices. Transfer prices are significant for both taxpayers and tax administrations because they determine in large part the income and expenses, and therefore taxable profits, of associated enterprises in different tax jurisdictions. The Committee on Fiscal Affairs, which is the main tax policy body of the OECD, has issued a number of reports relating to the transfer pricing issues. The most important are the Transfer pricing Guidelines for multinational enterprises and tax authorities which was published in 1995. These Guidelines focus on the application of the arm’s length principle to evaluate the transfer pricing of associated enterprises, the analysis of the methods for evaluating whether the conditions of commercial and financial relations within Multinational Enterprises satisfy the arm’s length principle and discussion of the practical application of those methods. Simply, these Guidelines focus on the main issues of principle that arise in the transfer pricing area. The Committee on Fiscal Affairs continues its work in this area, on 22 July 2010 approved and released the proposed revisions to Chaps. I through III of these Guidelines and simultaneously published a new Chap. IX related to business restructuring. The revisions are the result of several years of work on comparability and the use of profit-based methods. The revised text will have a significant impact on the application of transfer pricing analysis and transfer pricing methods. The paper is focused on significant changes of newly approved Guidelines with aim to evaluate how the Czech Republic began applying the principles set out in the revised text of these Guidelines.

Current circumstances are shaping new conditions for the interaction of entities of society. The COVID- 19 coronavirus pandemic tests the partner relationship between government, business and civil society in the system of their social responsibility for the efficiency and morality. The purpose of the study is to reveal the theoretical foundations of the concept of “social responsibility of the state, business, citizen” as a determining factor of formation, self-organization, self-control, modernization of civil society and analysis of the practice of organizing the social responsibility system of economic entities in the EU and in Ukraine. The subject of the research is social responsibility as a fundamental value of society and social institute of regulation of relations in society for ensuring stability of living conditions. The methodology of the research is based on the set of methods of scientific analysis. In particular, dialectical (when characterizing the categorical apparatus of the subject of study); systemic (when analyzing the relationship of socio-economic processes); statistical method of comparisons and groupings; economic analysis (when processing statistics); historical (in the study of the evolution of corporate social responsibility (CSR) theory and practice); empirical (in the analysis of the practice of forming partnerships between business structures, the state and civil society in the European Union and Ukraine). Conclusions of the study. The concept of “social responsibility” is a fundamental value of society, and the system of social responsibility of its entities is a social good. It can be considered as a social institute of socio-economic relations regulation in order to ensure the stability of society and the development of living conditions. The systematization of scientific approaches to defining the social responsibility of economic entities as a social good made it possible to justify it from the standpoint of a public policy object, a system of ethical values of society, voluntary obligations of business and a way of managing a business entity. Features of the current socio-economic situation require strengthening of their socially responsible behavior, introduction and observance of new forms of interaction between business and society on the principles of systematic and longterm. The innovative model of the economy is raising new demands for socially responsible behavior of public relations entities. Models of its realization have their own peculiarities in every EU country. They are all stimulated by state institutional mechanisms (privileges in taxation, subsidies, control over compliance with social and environmental standards); international standards of doing business; control by the public (social reporting to stakeholders). Such institutional levers stimulate the integration of socially responsible behavior into the development strategy of the business structures. The European experience of forming and provision of social positioning of entrepreneurial activity is being studied in Ukraine and is gradually being implemented. The level of transparency of leading companies activities is increasing, especially those, the activities of which are focused on international markets (agribusinesses, energy and metallurgy companies). The lower level of transparency of such information is inherent for mining companies. Transnational companies operating in Ukraine have a higher level of CSR disclosure than domestic organizations. On their websites, twice as often as on websites of the Ukrainian companies, issues on human rights, CSR programs, policies and goals are covered. As the example of the high level of compliance with the CSR principles may serve the activities of the French-Ukrainian company “Verallia-Ukraine” PJSC ”Consumers-Sklo-Zorya” (Rivne region, Ukraine). Many Ukrainian business entities have not yet integrated CSR into their company management strategy. Further promotion of the CSR concept, activation of institutional, economic and social mechanisms for its implementation, evaluation of the effectiveness of its implementation are needed.

The article is aimed at forming the theoretical-conceptual aspects of clustering as the basis for innovative development of industrial enterprises in modern transformational conditions of economic management. According to the results of the research, it is identified that the clustering process is directed towards forming an innovative system, that is, a combination of science and production, which ensures the transformation of new knowledge into competitive goods and services. The creation of cluster associations will enable the State and local governments to stimulate the innovatively oriented development of domestic industrial enterprises through the formation of a regional economic system in which economic entities of various industry sectors and forms of ownership create organizational-economic associations of suppliers and consumers of products and services based on international management standards. Innovatively oriented development of Ukraine shows that with the existing scientific potential, we are unacceptably lagged in terms of the share of intellectual property in public wealth and GDP. The primary causes are the following: insufficient budget financing; low demand for innovations on the part of business; low level of development of innovative entrepreneurship and innovation infrastructure; taxation which is fiscal rather than stimulating; high level of corruption; inaccessible lending and unstable system of insurance of technological and commercial risks. On the basis of the carried out research, the concept of clustering is proposed as the basis for innovatively oriented development of industrial enterprises. The clustering process solves many problems, forms the institutional foundation for the creation of a post-industrial information-based economy, strengthening the financial competitiveness of the regions and solving their socio-economic problems.

Purpose For the past years, the population of firms in China has increased fast. However, the financial research has always fallen behind the financial practice. Also, the Western financial theory may not be completely consistent with China’s context. In addition, appearing internet technology with big data and its applications to business bring some challenges not only to financial practice but also to the financial literature. Thus, the purpose of this paper is to review historical development of research in corporate finance, discuss the current issues and propose 16 key research topics in China context. Design/methodology/approach This paper surveys Western classical literature and some important literature by Chinese scholars in the field of corporate finance. On this basis, the authors point out the shortcomings of existing research and opportunities for future research. Findings The authors propose 16 key research topics in the near future considering the current reforms on economic development strategy, financial and taxation system and SOE’s property right under the institutional background in China. Originality/value This paper makes a contribution to corporate finance research by exploring frontier topics for future research according to the China context and the global trend. These topics represent the demand from enterprises in China and are challenges for the academic world. It is of practical significance and great theoretical value to implement these studies. It will help the management to solve their financial problems and provide a fundamental basis for constructing the financial management theory with Chinese characteristics.

Business start-ups, small and medium sized companies face financial difficulties to finance their innovative activities, which hinders innovative products from commercialization. This mainly results from the high risks and information asymmetries involved in such projects. Standard debt financers are reluctant to take these risks, besides the young enterprises lack collateral to receive the credit. However, the risk tolerance for investors differs as well. One of the alternatives for bank loans is venture capitalists, who rather become partners than creditors of young, innovative companies with growth potential. Particularly venture capital or the so-called “smart money” is what financially supports such business ventures, provides funding for technological transfer and commercialization. The authors of the present paper have chosen to examine and compare the venture capital attraction possibilities in the Baltic States using Venture Capital and Private Equity Country Attractiveness Index (by Groh et al.) data for 2012-2018. Venture capital market development is currently a very topical issue for the Latvian government, taking into consideration the critical importance of venture capital for financing innovation. Becoming the leader in the venture capital sector and No. 1 choice of start-up companies in the Baltics are now the objectives of the government of Latvia. It was therefore relevant and important to compare venture capital attraction possibilities in Latvia, Estonia and Lithuania to see and analyse in which aspects Latvia lags behind its neighbouring countries and in which it succeeds. The paper compares the six main factors or key drivers which determine the attractiveness of venture capital markets. According to Groh et al. (2016), these factors are: 1) Economic Activity; 2) Depth of Capital Market; 3) Taxation; 4) Investor Protection & Corporate Governance; 5) Human & Social Environment and 6) Entrepreneurial Culture & Deal Opportunities. However, the results of the research reveal that the main problems for international investor attraction in the Baltic States are underdeveloped capital markets and low economic activity. Latvia, unfortunately, is the most unattractive for international venture capital investors. Nevertheless, it has experienced the fastest growth during six years, which means that there is potential for becoming a leader in the venture capital sector. The present paper reveals the aspects to be improved for becoming more attractive for venture capital investments.

Abstract The enterprise value is central in business transactions (i.e. mergers and acquisitions, entrance of new shareholders or exit, bank loans), privatization of state-owned companies, etc., when the seller and the buyer confront each other’s business valuations trying to identify as many weaknesses as possible on the other side. Such important value as the enterprise’ is not an exact figure that can be calculated with precision at a certain date for a certain company, but an approximation that both buyer and seller may consider in each other’s attempt to close a good deal for himself/ herself. The valuation approach in this paper is a market method for business investments and comparable sales. This retrospective analysis of a major privatization in the Romanian steel industry - when the industry’s 'giant' was sold by the Romanian State - aims to identify key factors of the enterprise value in the context of international transactions. This was a high-profile privatization of great significance for the European steel industry and this analysis aims to understand enterprise value in order to model it. For this purpose, the article takes into consideration the information available regarding the privatization of Sidex Galați, the relevant literature and the author’s experience, supplemented by the information from the post-privatization evolution of the Romanian steel enterprise. As a result, the article draws lessons and concludes on determining factors of enterprise value, such as assets, solvency, company's history, cash flow, taxation etc., while the price transaction in the case of the privatization of Romanian steel enterprises was also influenced by exogenous factors, such as the steel market, the State's need for revenues, the controlling package of the company sold, etc.

The paper is devoted to the characterization and analysis of income tax in Ukraine at the present stage, as well as the issue of the level of tax burden, the level of all revenues to the state budget of Ukraine and all issues and problems associated with its management. The authors also examined the prospects for reform of this tax, its transformation into a tax on the withdrawn capital in the conditions of losses for enterprises and a decrease in economic indicators in general. The paper provides a comparative analysis of these two taxes and analyzes the impact of such a reform on the economy of the whole country. Also analyzed are European models of taxation of corporate profits in order to comply with international standards of Ukraine. At the present stage, the income tax is the main tax paid by legal entities, because making a profit is the main goal of any company, and such a tax can both promote development and cause quite big problems for business. At the same time, there is a lot of discussion and controversy about the transformation of the traditional income tax by the withholding tax, taking the example of Estonia. This issue is one of the most pressing now, because the transformation of the tax will have a strong impact on the state of our economy and will allow the business sector to develop with renewed vigor fairly quickly. The subject of this study is the tax on withdrawn capital, as well as how it affects the business of our country. The question of how to ensure reform in general and the transformation of income tax into withholding tax is still controversial and is often raised in the work of various experts. The paper describes and compares these two taxes (income tax and withheld capital tax), focusing on the problems and shortcomings of both taxes and ways to improve the situation.

The purpose of the article is to study the European experience of the formation and regulation of socially responsible behaviour of economic entities; distinguishing the dominant drivers of corporate social responsibility in Germany and strategic priorities for its implementation. Its contents are interpreted in the expanded and narrow sense. Expanded approach insists that CSR is a set of interrelated types of responsibility (legal, economic, professional, moral, political, etc.) that reflect the system of values of society. Narrow interpretation foresees the definition of the degree (measure) of adoption by the subject of socially significant goals of society, the fulfilment of mutual rights and responsibilities, observance of social norms. The research subject – the peculiarities of the functioning of the European model of socially responsible entrepreneurship, the practice of its implementation in Germany. The methodology of the research is based on the definition of general principles of constructing the system of corporate social responsibility, disclosure the essence of the categorical apparatus, considering its main theoretical concepts. In the process of research, a set of methods of scientific cognition were used: analysis, synthesis, generalization (for the disclosure of the conceptual-categorical apparatus of the subject of the research); statistical method, grouping, empirical approach (while analysing the practice of distributing social responsibility among the subjects of social partnership in the EU for ensuring social protection of the population, and differences between the EU countries on the level of such responsibility of the subjects of the social process, depending on the model of socio-economic development). Conclusion. Under the influence of the challenges of globalization and the 4th Industrial Revolution, aggravation of competition, the conditions of the economy are changing. The need for business models on the basis of the strategy of sustainable development, socially responsible behaviour of business structures on the basis of systemic and long-term is growing. This situation actualizes the problem of creating mechanisms for maintaining social compromise in society. System of ensuring responsibility of the subjects of society for the formation of normal living conditions of society is one of the institutional mechanisms of social control and creating conditions for balancing personal, collective and social interests. Institutional support for the functioning of the mechanism for supporting social compromise regarding the formation of normal living conditions is based on the levers of state regulation (subsidies, preferential taxation, economic incentives, and compliance with the standards of activity); institute of entrepreneurship (international and national standards for doing business); institute of the public (the system of social reporting of enterprises, work with territorial communities). Compliance with product quality standards, with obligations to stakeholders, social reporting and progress reporting (including its environmental parameters), transparent business promotes the implementation of socio-stabilizing functions of entrepreneurial activity both on national and on a world scale. Experience of European (in particular, German) companies proves the need to adherence to the principles of social responsibility in entrepreneurship and the possibility of their use as a competitive advantage.

Topicality. Having carefully considered the Port Consumption Calculation Methodology presented for public discussion, Seaports Development Strategy Committee of Ukrainian Port Association's(“Ukrport”) notes some positive aspects related to the preparation of this important document, which is intended to streamline the pricing process in the area of charging port fees and to bring them up to necessary and sufficient level to ensure the normal operation of port facilities and navigational facilities, and, accordingly, the safety of navigation in the Ukrainian state responsibility zone. It should also be emphasized that the return to gross tonnage charging, rather than unit modulus, as is now the case, is a significant positive step and will contribute to greater acceptance and transparency of the Development Port Consumption Calculation Techniques. The same applies to the applied approach, which divides the port dues rate into two components: operating and investment. This is all the more important that the global approach, which uses most ports, considers port charges as a means of covering current costs for the maintenance of relevant facilities and facilities for which no commercial gain is foreseen. The commercial purpose of port facilities is to provide efficient and safe service at the port of vehicles and overload of goods, which is what creates the commercial benefit that is being generated by all participants in the transport process at the port. This is precisely because ships that use the port only as a harbor-warehouse are largely exempt from paying port duties in world practice. That is, the only source of formation of the investment component of port dues may be only depreciation of the relevant facilities.Aim and tasks. A critical assessment of the construction of a methodology for calculating port fees. As a rule, in the world for port facilities, a linear method is used to calculate depreciation charges, but there is also the possibility to use certain methods of accelerated depreciation, which, however, operate simultaneously with the appropriate methods of transfer of losses caused by accelerated depreciation on the former or subsequent time periods, and simply to levy from the shipowner funds for future development is economically insolvent and does not correspond to good maritime practice. Unfortunately, this circumstance, besides the berthing fee, has not been taken into account at all when developing the Port Taxation Calculation Method, which is presented on the website of the Ministry of Infrastructure for public discussion. Thus, in the second paragraph of item 1.1. Section II of the general provisions reads as follows: "The investment component of the berthing rates is charged to port operators and other business entities engaged in economic activities using berths for handling, handling and storage of goods, servicing ships, and other facilities. with these types of economic activity. "Research results. Next, it should also be noted that in the presented method: the base rate of the ship's fee includes: coverage of planned operating costs in accordance with the intended purpose of the ship's fee, planned operating and investment costs associated with the implementation of activities for the operation and development of the search and rescue system in the marine search and rescue region of Ukraine, marine research enterprises and river transport belonging to the sphere of management of the Ministry of Infrastructure of Ukraine. The base rate of the ship's fee is determined depending on the ship's specialization, taking into account the coefficients of K bulk carrier, K tanker, K container, K ro-ro, K passenger, other, reflecting the effect of the design features of the vessels on the ability to provide transportation of goods and / or passengers, while gross tonnage of these properties itself by itself already takes into account through the appropriate calculation methodology.Base rate for lighthouse - coverage of planned operating and investment costs for the provision and development of navigational and hydrographic navigation support;the base rate of the administrative fee includes: covering the costs of fulfilling Ukraine's obligations to comply with the legislation and regulations of navigation, international agreements of Ukraine with regard to navigation, the consent to be bound by the Verkhovna Rada of Ukraine, fulfillment of other tasks, in accordance with the international obligations imposed on the enterprises of the maritime industry, as well as merchant shipping, navigation on inland waterways, navigational and hydrographic provision of navigation, as well as in the field of maritime safety and river transport (except for the navigation safety of vessels of the fleet of the fishing industry);That is, the base rate of the administrative fee also includes the costs, which are already somehow foreseen in the ship and beacon fees.Conclusion. Having analyzed the rules of law, we can conclude that port dues are a fee for specific services to the shipowner who pays these fees. In the provision of these services, fixed assets and other non-current assets are very worn out, both physically and morally, in connection with which there is a need to direct port charges, first of all, this is the main source of renovation, repair, reconstruction and construction of hydro-technical constructions, dredging works to maintain the necessary depths in the water areas and approach channels of sea ports of Ukraine. In addition, the basis of the system of formation of tariffs for port dues is the cost of specific services received by shipowners. Control of the cost of these services with the help of a list of costs (covered by port fees), which are included in the cost, makes it possible to establish reasonable, competitive tariffs for port dues. At the same time, tariffs are kept at the market level, and if necessary, they may be justified (based on the analysis of cost of services) for the purpose, on the one hand, to ensure sufficient funds to cover costs included in cost, and on the other hand to ensure the attractiveness of port dues for shipowners, cargo owners in order to attract more cargo to seaports, primarily transit.

Meredith A. Crowley of Federal Reserve Bank of Chicago reviews “Elements of Multinational Strategy” by Keith Head,. The EconLit Abstract of the reviewed work begins “Textbook on international business integrates the academic study of international trade and foreign direct investment with the actual strategic and operational decisions of exporters and multinational enterprises. Discusses business across borders; gains from trade; factor advantages; trade costs; trade rules; market adaptation; multinational formation; internalization; competitive interactions; foreign exchange risk; political risk; international taxation; and expatriate assignment. Head is with the Sauder School of Business at the University of British Columbia. No index.”

The article reviews the legislative documents defining the requirements for the accounting system of domestic small business owners. The focus is on the choice of alternative accounting solutions provided by the national accounting regulations and international financial reporting standards. The role of entrepreneurship in the economic development of the state is indisputable. Harmonization of domestic legislation in accordance with European requirements and international accounting standards is an urgent need today. A coordinated and integral legal and regulatory framework will contribute to the effective development of the entrepreneurial activity. The analysis of legal and regulatory sources showed that small business owners in Ukraine can choose the form of organizing and maintaining accounting records; financial reporting; a chart of accounts for bookkeeping; a taxation system. It is established that the effectiveness of management depends on the quality of information support. Objective and reliable information concerning the financial and economic activities of the business owner in relation to past and current events performs a predictive function. Such information allows predicting the development trends of the enterprise in the future. The necessary information base can be created by an accounting system that combines a financial accounting system, a management accounting system, and a taxation system of an economic entity. The most informative source for management decisions is financial data reporting. The paper compares the legal requirements for forms of financial reporting in accordance with national accounting regulations (standards) (NP(S)AS 1 and NP(S)AS 25), as well as the international financial reporting standard for small and medium enterprises (IFRS for SMEs). Particular attention is paid to the periodicity of reporting to tax authorities and statistical authorities. It also focuses on additional accounting preferences for entrepreneurs who have the right to submit financial reporting of micro-enterprises.

The article examines the existing problems of the current state of management and development of micro, small and medium enterprises in Ukraine and in the world, in particular, in the field of services. Statistical and scientific sources on the specified problems are analyzed. The important social and economic role, competitive advantages of small and medium enterprises in comparison with big business and the reasons of their insufficient efficiency are emphasized. The share of value added in the gross domestic product produced by micro and small enterprises in Ukraine in comparison with the EU countries is singled out and the main reasons for the lag are identified. The analysis of the effectiveness of the simplified system of taxation of microbusiness, in particular, individual entrepreneurs working in the fields of services, trade, catering and IT, revealed tax evasion and the existence of unequal conditions for paying taxes by different categories of taxpayers. These calculations show that significant amounts of income of simplistic entrepreneurs working in the field of information technology are not taxed at all. The international and domestic experience on the issue of removing microbusiness from the shadows by introducing the mandatory use of registrars of settlement operations has been studied. It was emphasized that, in the context of decentralization, the crucial role in overcoming the shortcomings of the simplified taxation system should be played by local authorities, which are interested in establishing clear rules for fiscalization of individual entrepreneurs to fill local budgets with taxes. In order to find common economically sound solutions that are acceptable to all parties, it is proposed to create working groups of representatives of local authorities and microbusiness. In order to increase the efficiency of micro, small and medium-sized enterprises at the local community level, a number of measures are recommended that will increase the number of entrepreneurs and jobs, increase revenues to local budgets and improve the well-being of community residents. The government should create investment infrastructure for micro, small and medium-sized businesses with favorable conditions, and entrepreneurs should pay taxes politely.

How did the rise of multinational enterprises (MNEs) put pressure on the prevailing international corporate tax framework? MNEs, and firms with market power, are not new phenomena, nor is the corporate income tax, which dates to the early 20th century. This prompts the question, what is distinctly new (about multinational enterprises)—if anything—that has triggered unprecedented recent concerns about vulnerabilities in international tax arrangements and the taxation of MNEs? This paper presents a set of empirical observations and a synthesis of strands of the literature to answer this question. A key message is that MNEs of the 21st century operate differently from prior periods and have evolved to become global firms—with important tax ramifications. The fragility of international tax arrangements was present at the outset of designing international tax rules, but the challenges have drastically intensified with the global integration of business, the increased trade in hard-to-price services and intangibles, and the rapid growth of the digital economy.

The article is devoted to defining the peculiarities of the functioning of small business in Ukraine in the context of economic globalization. In particular, the main current economic globalization challenges for domestic small business and their impact on the development of its competitiveness are identified. Today, small business in Ukraine is an important element of the national economy. The functioning of small enterprises in modern economic conditions requires flexibility, mobilization of financial and production resources, the use of scientific and technological progress. Therefore, one of the main vectors of economic reform in Ukraine should be multilateral support for small business development. The development of small business is an important factor in building a socially oriented economy, improving living standards, promotes the process of integration of the domestic economy into the world economy. The article also identifies the factors that contribute to strengthening the position of small businesses in the economy. The directions of small business development in Ukraine are offered and the importance of small innovative business development is established. The following measures are proposed to support the development of small business: development of programs for preferential lending to small businesses with the involvement of state-owned banks and their state guarantee (the first steps have already begun to be taken in this direction); development and implementation of a mechanism to stimulate banking institutions to preferential lending to small enterprises operating in priority areas identified by the state; improving the process of small business taxation and simplifying the system of tax administration; creation of a bank that would specialize in microfinance of small business with a partial contribution from the state and international financial organizations; increasing the financial base of existing state funds to support small business; reducing the cost of administrative procedures and obtaining administrative services; creation of specialized state institutions for insurance of export-import operations.

Purpose Realizing the value of social capital to small and medium enterprises (SMEs) in developing economies, where relationship networks play a big role in filling the gaps that are left by dysfunctional institutions, the purpose of this paper is to gain an empirical understanding of various forms of social capital in relation to the innovation of SMEs in Zimbabwe. Design/methodology/approach Primary data is collected from SMEs across several regions in Harare, where instrument validity is checked with confirmatory factor analysis, and hypotheses are tested using moderated regression analyses. Findings A positive influence is observed for both alliance capital and reputational capital on innovation, while non-significant moderating effects in terms of environmental hostility and dynamism are noted for these relationships Practical implications On a practical level, to increase levels of innovation, SME owner-managers need to secure stronger investments into their social infrastructure by developing (both physical and digital) alliance and reputational capitals Originality/value By segregating various forms of social capital, an original understanding is attained in terms of how entrepreneurs actively leverage alliance and reputational forms of social capitals to increase their levels of innovation. The theoretical and empirical understanding of the social capital-innovation link is enhanced, and the study constructs now have broader application as their psychometric properties have been established in an under-researched African market context.

AbstractMultinational enterprises (MNEs) use different methods and structures for base erosion and profit shifting (BEPS) to optimize the tax liability of the group. It is of great interest to the relevant countries to be able to identify such practices and react with appropriate measures. The objective of this paper is to verify whether selected MNEs engaged in the digital economy tend to shift profits from the Czech Republic to jurisdictions with lower taxation using the tax evasion rate (TER) indicator and the transactional net margin method (TNNM). Since the TER method has not been tested yet, this paper also aims to demonstrate its application on real world data and to evaluate its usability. On a sample of five MNEs, the analysis showed a potential tendency to shift profits within Europe for four MNEs (Amazon, Apple, Google and Uber) and a potential tendency to shift profits specifically from the Czech Republic for one MNE (Amazon). The analysis shows that TER is suitable as a preliminary indication of possible risks, rather than their exact quantification.

Problem setting. The article examines the possibilities of providing employment for young people through the activities of public communities. An environment that will allow young people to develop themselves in the communities where they were born, live and plan to stay.Recent research and publications analysis. Youth employment is very closely linked to the general employment situation. However, it has its own dimensions and problems that require specific measures. Domestic scholars, for instance, Yu. Palahniuk, O. Shtym, G. Koval, Y. Makogon paid considerable attention to the European experience of youth employment policy, and G. Koval, M. Karpulenko, Y. Hetmanenko studied the state youth policy in general. Highlighting previously unsettled parts of the general problem. The article analyzes the typical challenges of youth employment: unemployment, going abroad; an insufficient level of qualification and opportunities to involve young people through the cooperation of educational institutions and opportunities to involve young people in cooperation of educational institutions; non-formal education; participation in local community self-government. As a result of the research, it is proposed to develop an effective state youth policy in ensuring youth employment in small communities through the development of youth entrepreneurship; activation of youth and involvement in community activities, inclusion of youth in councils and committees. Therefore, the object of study is youth employment through the activities of young communities in Ukraine. Paper main body. In Ukraine, youth unemployment is associated primarily with underdevelopment and economic growth, trends in the international economy’s globalization. It is migration processes that strongly influence the situation on the world labor market because, during the growth of cross-border movements, more and more young people leave their homes in the hope of finding work, which leads to migration from rural areas to cities or other countries. This will have an impact on labor markets in their countries as well as abroad. The International Labor Organization estimates that about 85,3 million young women and men were unemployed worldwide in 2020, or 44 per cent of the world’s unemployed. Many more young people try to earn a living in the informal economy and often end up as unemployed, unskilled young people. To replace older ones, they hire even younger children for lower pay, thus greatly reducing the chances of providing education for both. It is estimated that 59 million young people between the ages of 15 and 17 are employed in unsafe jobs.Unemployment is one of the problems of young people in small communities of Ukraine, as 73% of young people do not see opportunities for even temporary employment due to lack of supply in the market, and 27% due to housekeeping.Traditionally, the lower unemployment rate in rural areas is due to participation in housekeeping. However, this positive fact about the lower unemployment rate among rural youth is reduced by a longer unemployment period. According to the research, the experience of youth unemployment is more devastating for them than for their parents because parents have fewer economic means to support their children. Accordingly, the development of youth in the community is impossible without creating employment conditions.An important factor is to acquaint young people with the trends and directions of development of the whole territorial community and even better involve them in the planning process, allowing them to assess the threats and challenges to the development of small communities. Accordingly, contributing to education and informing about medium-term prospects and available vacancies are practical things that can already make youth unemployment low.The article describes the main provisions of the youth program “DOBRE”, which operates in Ukraine. This program offers its own 4-level system of youth involvement: “Hear youth”, “Develop youth”, “Strengthen youth”, “Support youth”. Addressing the lack of support and activity of young people in small communities is done by creating the opportunities they need for young people, namely creating enough jobs, developing opportunities, decent pay, and creating a sense that young people are included in community life. Also, the priorities are adhered to and supported by the community.Conclusions of the research and prospects for further studies. To solve the problem of youth employment, it is necessary to form state guarantees aimed at stimulating self-employment and entrepreneurial activity of young people; improving the legal framework in the context of preferential taxation of enterprises that hire young workers; active control and monitoring of labor market and educational services indicators to timely adjust and take the necessary measures, as well as to implement a preventive policy of youth employment. An important area of problem-solving is forming a mechanism for effective interaction between government, business and education, which determines the coordination of efforts and joint activities aimed at improving the situation on the labor market and providing young people with jobs. The state’s policy in the field of youth employment needs to be improved, taking into account the current state of the labor market, new trends in social and labor relations through the introduction of best foreign experience and its adaptation to domestic realities.

On May 18, 2003, the Australian Minister for Education, Brendon Nelson, appeared on the Channel Nine Sunday programme. The Yoda of political journalism, Laurie Oakes, attacked him personally and professionally. He disclosed to viewers that the Minister for Education, Science and Training had suffered a false start in his education, enrolling in one semester of an economics degree that was never completed. The following year, he commenced a medical qualification and went on to become a practicing doctor. He did not pay fees for any of his University courses. When reminded of these events, Dr Nelson became agitated, and revealed information not included in the public presentation of the budget of that year, including a ‘cap’ on HECS-funded places of five years for each student. He justified such a decision with the cliché that Australia’s taxpayers do not want “professional students completing degree after degree.” The Minister confirmed that the primary – and perhaps the only – task for university academics was to ‘train’ young people for the workforce. The fact that nearly 50% of students in some Australian Universities are over the age of twenty five has not entered his vision. He wanted young people to complete a rapid degree and enter the workforce, to commence paying taxes and the debt or loan required to fund a full fee-paying place. Now – nearly two years after this interview and with the Howard government blessed with a new mandate – it is time to ask how this administration will order education and value teaching and learning. The curbing of the time available to complete undergraduate courses during their last term in office makes plain the Australian Liberal Government’s stance on formal, publicly-funded lifelong learning. The notion that a student/worker can attain all required competencies, skills, attributes, motivations and ambitions from a single degree is an assumption of the new funding model. It is also significant to note that while attention is placed on the changing sources of income for universities, there have also been major shifts in the pattern of expenditure within universities, focusing on branding, marketing, recruitment, ‘regional’ campuses and off-shore courses. Similarly, the short-term funding goals of university research agendas encourage projects required by industry, rather than socially inflected concerns. There is little inevitable about teaching, research and education in Australia, except that the Federal Government will not create a fully-funded model for lifelong learning. The task for those of us involved in – and committed to – education in this environment is to probe the form and rationale for a (post) publicly funded University. This short paper for the ‘order’ issue of M/C explores learning and teaching within our current political and economic order. Particularly, I place attention on the synergies to such an order via phrases like the knowledge economy and the creative industries. To move beyond the empty promises of just-in-time learning, on-the-job training, graduate attributes and generic skills, we must reorder our assumptions and ask difficult questions of those who frame the context in which education takes place. For the term of your natural life Learning is a big business. Whether discussing the University of the Third Age, personal development courses, self help bestsellers or hard-edged vocational qualifications, definitions of learning – let alone education – are expanding. Concurrent with this growth, governments are reducing centralized funding and promoting alternative revenue streams. The diversity of student interests – or to use the language of the time, client’s learning goals – is transforming higher education into more than the provision of undergraduate and postgraduate degrees. The expansion of the student body beyond the 18-25 age group and the desire to ‘service industry’ has reordered the form and purpose of formal education. The number of potential students has expanded extraordinarily. As Lee Bash realized Today, some estimates suggest that as many as 47 percent of all students enrolled in higher education are over 25 years old. In the future, as lifelong learning becomes more integrated into the fabric of our culture, the proportion of adult students is expected to increase. And while we may not yet realize it, the academy is already being transformed as a result. (35) Lifelong learning is the major phrase and trope that initiates and justifies these changes. Such expansive economic opportunities trigger the entrepreneurial directives within universities. If lifelong learning is taken seriously, then the goals, entry standards, curriculum, information management policies and assessments need to be challenged and changed. Attention must be placed on words and phrases like ‘access’ and ‘alternative entry.’ Even more consideration must be placed on ‘outcomes’ and ‘accountability.’ Lifelong learning is a catchphrase for a change in purpose and agenda. Courses are developed from a wide range of education providers so that citizens can function in, or at least survive, the agitation of the post-work world. Both neo-liberal and third way models of capitalism require the labeling and development of an aspirational class, a group who desires to move ‘above’ their current context. Such an ambiguous economic and social goal always involves more than the vocational education and training sector or universities, with the aim being to seamlessly slot education into a ‘lifestyle.’ The difficulties with this discourse are two-fold. Firstly, how effectively can these aspirational notions be applied and translated into a real family and a real workplace? Secondly, does this scheme increase the information divide between rich and poor? There are many characteristics of an effective lifelong learner including great personal motivation, self esteem, confidence and intellectual curiosity. In a double shifting, change-fatigued population, the enthusiasm for perpetual learning may be difficult to summon. With the casualization of the post-Fordist workplace, it is no surprise that policy makers and employers are placing the economic and personal responsibility for retraining on individual workers. Instead of funding a training scheme in the workplace, there has been a devolving of skill acquisition and personal development. Through the twentieth century, and particularly after 1945, education was the track to social mobility. The difficulty now – with degree inflation and the loss of stable, secure, long-term employment – is that new modes of exclusion and disempowerment are being perpetuated through the education system. Field recognized that “the new adult education has been embraced most enthusiastically by those who are already relatively well qualified.” (105) This is a significant realization. Motivation, meta-learning skills and curiosity are increasingly being rewarded when found in the already credentialed, empowered workforce. Those already in work undertake lifelong learning. Adult education operates well for members of the middle class who are doing well and wish to do better. If success is individualized, then failure is also cast on the self, not the social system or policy. The disempowered are blamed for their own conditions and ‘failures.’ The concern, through the internationalization of the workforce, technological change and privatization of national assets, is that failure in formal education results in social exclusion and immobility. Besides being forced into classrooms, there are few options for those who do not wish to learn, in a learning society. Those who ‘choose’ not be a part of the national project of individual improvement, increased market share, company competitiveness and international standards are not relevant to the economy. But there is a personal benefit – that may have long term political consequences – from being ‘outside’ society. Perhaps the best theorist of the excluded is not sourced from a University, but from the realm of fictional writing. Irvine Welsh, author of the landmark Trainspotting, has stated that What we really need is freedom from choice … People who are in work have no time for anything else but work. They have no mental space to accommodate anything else but work. Whereas people who are outside the system will always find ways of amusing themselves. Even if they are materially disadvantaged they’ll still find ways of coping, getting by and making their own entertainment. (145-6) A blurring of work and learning, and work and leisure, may seem to create a borderless education, a learning framework uninhibited by curriculum, assessment or power structures. But lifelong learning aims to place as many (national) citizens as possible in ‘the system,’ striving for success or at least a pay increase which will facilitate the purchase of more consumer goods. Through any discussion of work-place training and vocationalism, it is important to remember those who choose not to choose life, who choose something else, who will not follow orders. Everybody wants to work The great imponderable for complex economic systems is how to manage fluctuations in labour and the market. The unstable relationship between need and supply necessitates flexibility in staffing solutions, and short-term supplementary labour options. When productivity and profit are the primary variables through which to judge successful management, then the alignments of education and employment are viewed and skewed through specific ideological imperatives. The library profession is an obvious occupation that has confronted these contradictions. It is ironic that the occupation that orders knowledge is experiencing a volatile and disordered workplace. In the past, it had been assumed that librarians hold a degree while technicians do not, and that technicians would not be asked to perform – unsupervised – the same duties as librarians. Obviously, such distinctions are increasingly redundant. Training packages, structured through competency-based training principles, have ensured technicians and librarians share knowledge systems which are taught through incremental stages. Mary Carroll recognized the primary questions raised through this change. If it is now the case that these distinctions have disappeared do we need to continue to draw them between professional and para-professional education? Does this mean that all sectors of the education community are in fact learning/teaching the same skills but at different levels so that no unique set of skills exist? (122) With education reduced to skills, thereby discrediting generalist degrees, the needs of industry have corroded the professional standards and stature of librarians. Certainly, the abilities of library technicians are finally being valued, but it is too convenient that one of the few professions dominated by women has suffered a demeaning of knowledge into competency. Lifelong learning, in this context, has collapsed high level abilities in information management into bite sized chunks of ‘skills.’ The ideology of lifelong learning – which is rarely discussed – is that it serves to devalue prior abilities and knowledges into an ever-expanding imperative for ‘new’ skills and software competencies. For example, ponder the consequences of Hitendra Pillay and Robert Elliott’s words: The expectations inherent in new roles, confounded by uncertainty of the environment and the explosion of information technology, now challenge us to reconceptualise human cognition and develop education and training in a way that resonates with current knowledge and skills. (95) Neophilliacal urges jut from their prose. The stress on ‘new roles,’ and ‘uncertain environments,’ the ‘explosion of information technology,’ ‘challenges,’ ‘reconceptualisations,’ and ‘current knowledge’ all affirms the present, the contemporary, and the now. Knowledge and expertise that have taken years to develop, nurture and apply are not validated through this educational brief. The demands of family, work, leisure, lifestyle, class and sexuality stretch the skin taut over economic and social contradictions. To ease these paradoxes, lifelong learning should stress pedagogy rather than applications, and context rather than content. Put another way, instead of stressing the link between (gee wizz) technological change and (inevitable) workplace restructuring and redundancies, emphasis needs to be placed on the relationship between professional development and verifiable technological outcomes, rather than spruiks and promises. Short term vocationalism in educational policy speaks to the ordering of our public culture, requiring immediate profits and a tight dialogue between education and work. Furthering this logic, if education ‘creates’ employment, then it also ‘creates’ unemployment. Ironically, in an environment that focuses on the multiple identities and roles of citizens, students are reduced to one label – ‘future workers.’ Obviously education has always been marinated in the political directives of the day. The industrial revolution introduced a range of technical complexities to the workforce. Fordism necessitated that a worker complete a task with precision and speed, requiring a high tolerance of stress and boredom. Now, more skills are ‘assumed’ by employers at the time that workplaces are off-loading their training expectations to the post-compulsory education sector. Therefore ‘lifelong learning’ is a political mask to empower the already empowered and create a low-level skill base for low paid workers, with the promise of competency-based training. Such ideologies never need to be stated overtly. A celebration of ‘the new’ masks this task. Not surprisingly therefore, lifelong learning has a rich new life in ordering creative industries strategies and frameworks. Codifying the creative The last twenty years have witnessed an expanding jurisdiction and justification of the market. As part of Tony Blair’s third way, the creative industries and the knowledge economy became catchwords to demonstrate that cultural concerns are not only economically viable but a necessity in the digital, post-Fordist, information age. Concerns with intellectual property rights, copyright, patents, and ownership of creative productions predominate in such a discourse. Described by Charles Leadbeater as Living on Thin Air, this new economy is “driven by new actors of production and sources of competitive advantage – innovation, design, branding, know-how – which are at work on all industries.” (10) Such market imperatives offer both challenges and opportunity for educationalists and students. Lifelong learning is a necessary accoutrement to the creative industries project. Learning cities and communities are the foundations for design, music, architecture and journalism. In British policy, and increasingly in Queensland, attention is placed on industry-based research funding to address this changing environment. In 2000, Stuart Cunningham and others listed the eight trends that order education, teaching and learning in this new environment. The Changes to the Provision of Education Globalization The arrival of new information and communication technologies The development of a knowledge economy, shortening the time between the development of new ideas and their application. The formation of learning organizations User-pays education The distribution of knowledge through interactive communication technologies (ICT) Increasing demand for education and training Scarcity of an experienced and trained workforce Source: S. Cunningham, Y. Ryan, L. Stedman, S. Tapsall, K. Bagdon, T. Flew and P. Coaldrake. The Business of Borderless Education. Canberra: DETYA Evaluation and Investigations Program [EIP], 2000. This table reverberates with the current challenges confronting education. Mobilizing such changes requires the lubrication of lifelong learning tropes in university mission statements and the promotion of a learning culture, while also acknowledging the limited financial conditions in which the educational sector is placed. For university scholars facilitating the creative industries approach, education is “supplying high value-added inputs to other enterprises,” (Hartley and Cunningham 5) rather than having value or purpose beyond the immediately and applicably economic. The assumption behind this table is that the areas of expansion in the workforce are the creative and service industries. In fact, the creative industries are the new service sector. This new economy makes specific demands of education. Education in the ‘old economy’ and the ‘new economy’ Old Economy New Economy Four-year degree Forty-year degree Training as a cost Training as a source of competitive advantage Learner mobility Content mobility Distance education Distributed learning Correspondence materials with video Multimedia centre Fordist training – one size fits all Tailored programmes Geographically fixed institutions Brand named universities and celebrity professors Just-in-case Just-in-time Isolated learners Virtual learning communities Source: T. Flew. “Educational Media in Transition: Broadcasting, Digital Media and Lifelong Learning in the Knowledge Economy.” International Journal of Instructional Media 29.1 (2002): 20. There are myriad assumptions lurking in Flew’s fascinating table. The imperative is short courses on the web, servicing the needs of industry. He described the product of this system as a “learner-earner.” (50) This ‘forty year degree’ is based on lifelong learning ideologies. However Flew’s ideas are undermined by the current government higher education agenda, through the capping – through time – of courses. The effect on the ‘learner-earner’ in having to earn more to privately fund a continuance of learning – to ensure that they keep on earning – needs to be addressed. There will be consequences to the housing market, family structures and leisure time. The costs of education will impact on other sectors of the economy and private lives. Also, there is little attention to the groups who are outside this taken-for-granted commitment to learning. Flew noted that barriers to greater participation in education and training at all levels, which is a fundamental requirement of lifelong learning in the knowledge economy, arise in part out of the lack of provision of quality technology-mediated learning, and also from inequalities of access to ICTs, or the ‘digital divide.’ (51) In such a statement, there is a misreading of teaching and learning. Such confusion is fuelled by the untheorised gap between ‘student’ and ‘consumer.’ The notion that technology (which in this context too often means computer-mediated platforms) is a barrier to education does not explain why conventional distance education courses, utilizing paper, ink and postage, were also unable to welcome or encourage groups disengaged from formal learning. Flew and others do not confront the issue of motivation, or the reason why citizens choose to add or remove the label of ‘student’ from their bag of identity labels. The stress on technology as both a panacea and problem for lifelong learning may justify theories of convergence and the integration of financial, retail, community, health and education provision into a services sector, but does not explain why students desire to learn, beyond economic necessity and employer expectations. Based on these assumptions of expanding creative industries and lifelong learning, the shape of education is warping. An ageing population requires educational expenditure to be reallocated from primary and secondary schooling and towards post-compulsory learning and training. This cost will also be privatized. When coupled with immigration flows, technological changes and alterations to market and labour structures, lifelong learning presents a profound and personal cost. An instrument for economic and social progress has been individualized, customized and privatized. The consequence of the ageing population in many nations including Australia is that there will be fewer young people in schools or employment. Such a shift will have consequences for the workplace and the taxation system. Similarly, those young workers who remain will be far more entrepreneurial and less loyal to their employers. Public education is now publically-assisted education. Jane Jenson and Denis Saint-Martin realized the impact of this change. The 1980s ideological shift in economic and social policy thinking towards policies and programmes inspired by neo-liberalism provoked serious social strains, especially income polarization and persistent poverty. An increasing reliance on market forces and the family for generating life-chances, a discourse of ‘responsibility,’ an enthusiasm for off-loading to the voluntary sector and other altered visions of the welfare architecture inspired by neo-liberalism have prompted a reaction. There has been a wide-ranging conversation in the 1990s and the first years of the new century in policy communities in Europe as in Canada, among policy makers who fear the high political, social and economic costs of failing to tend to social cohesion. (78) There are dense social reorderings initiated by neo-liberalism and changing the notions of learning, teaching and education. There are yet to be tracked costs to citizenship. The legacy of the 1980s and 1990s is that all organizations must behave like businesses. In such an environment, there are problems establishing social cohesion, let alone social justice. To stress the product – and not the process – of education contradicts the point of lifelong learning. Compliance and complicity replace critique. (Post) learning The Cold War has ended. The great ideological battle between communism and Western liberal democracy is over. Most countries believe both in markets and in a necessary role for Government. There will be thunderous debates inside nations about the balance, but the struggle for world hegemony by political ideology is gone. What preoccupies decision-makers now is a different danger. It is extremism driven by fanaticism, personified either in terrorist groups or rogue states. Tony Blair (http://www.number-10.gov.uk/output/Page6535.asp) Tony Blair, summoning his best Francis Fukuyama impersonation, signaled the triumph of liberal democracy over other political and economic systems. His third way is unrecognizable from the Labour party ideals of Clement Attlee. Probably his policies need to be. Yet in his second term, he is not focused on probing the specificities of the market-orientation of education, health and social welfare. Instead, decision makers are preoccupied with a war on terror. Such a conflict seemingly justifies large defense budgets which must be at the expense of social programmes. There is no recognition by Prime Ministers Blair or Howard that ‘high-tech’ armory and warfare is generally impotent to the terrorist’s weaponry of cars, bodies and bombs. This obvious lesson is present for them to see. After the rapid and successful ‘shock and awe’ tactics of Iraq War II, terrorism was neither annihilated nor slowed by the Coalition’s victory. Instead, suicide bombers in Saudi Arabia, Morocco, Indonesia and Israel snuck have through defenses, requiring little more than a car and explosives. More Americans have been killed since the war ended than during the conflict. Wars are useful when establishing a political order. They sort out good and evil, the just and the unjust. Education policy will never provide the ‘big win’ or the visible success of toppling Saddam Hussein’s statue. The victories of retraining, literacy, competency and knowledge can never succeed on this scale. As Blair offered, “these are new times. New threats need new measures.” (ht tp://www.number-10.gov.uk/output/Page6535.asp) These new measures include – by default – a user pays education system. In such an environment, lifelong learning cannot succeed. It requires a dense financial commitment in the long term. A learning society requires a new sort of war, using ideas not bullets. References Bash, Lee. “What Serving Adult Learners Can Teach Us: The Entrepreneurial Response.” Change January/February 2003: 32-7. Blair, Tony. “Full Text of the Prime Minister’s Speech at the Lord Mayor’s Banquet.” November 12, 2002. http://www.number-10.gov.uk/output/Page6535.asp. Carroll, Mary. “The Well-Worn Path.” The Australian Library Journal May 2002: 117-22. Field, J. Lifelong Learning and the New Educational Order. Stoke on Trent: Trentham Books, 2000. Flew, Terry. “Educational Media in Transition: Broadcasting, Digital Media and Lifelong Learning in the Knowledge Economy.” International Journal of Instructional Media 29.1 (2002): 47-60. Hartley, John, and Cunningham, Stuart. “Creative Industries – from Blue Poles to Fat Pipes.” Department of Education, Science and Training, Commonwealth of Australia (2002). Jenson, Jane, and Saint-Martin, Denis. “New Routes to Social Cohesion? Citizenship and the Social Investment State.” Canadian Journal of Sociology 28.1 (2003): 77-99. Leadbeater, Charles. Living on Thin Air. London: Viking, 1999. Pillay, Hitendra, and Elliott, Robert. “Distributed Learning: Understanding the Emerging Workplace Knowledge.” Journal of Interactive Learning Research 13.1-2 (2002): 93-107. Welsh, Irvine, from Redhead, Steve. “Post-Punk Junk.” Repetitive Beat Generation. Glasgow: Rebel Inc, 2000: 138-50. Citation reference for this article MLA Style Brabazon, Tara. "Freedom from Choice: Who Pays for Customer Service in the Knowledge Economy?." M/C Journal 7.6 (2005). echo date('d M. Y'); ?> <http://journal.media-culture.org.au/0501/02-brabazon.php>. APA Style Brabazon, T. (Jan. 2005) "Freedom from Choice: Who Pays for Customer Service in the Knowledge Economy?," M/C Journal, 7(6). Retrieved echo date('d M. Y'); ?> from <http://journal.media-culture.org.au/0501/02-brabazon.php>.