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'Heathrow: Ready for Take Off?' talks about the possibility of a third runway for the airport, which would be a controversial decision affecting many different groups of stakeholders. In common with other decisions to develop and expand large infrastructure projects (like road networks and large power stations or wind farms), there’s a lot of complexity and uncertainty being experienced in the decision situation. Decisions about such infrastructure projects are also deeply embedded in history. Through interconnections with other related decisions they can typically be traced back not just years but decades.  

Techniques such as predictive modelling of capacities and monetary valuation of costs and benefits can aid decision making. However, users of these techniques have different values and inevitably make assumptions that are not always made explicit.  One group of stakeholders might feel that everything that matters can be expressed in monetary terms whereas another group might believe that some aspects (e.g. habitat or settlement destruction or rights to livelihoods) cannot be weighed up in this way.

Much critique about expanding airports comes from an environmental point of view – from concerns about increased noise and greenhouse gas emissions. Many now argue for sustainable development and decision making that takes account of not just economic and social considerations, such as potential jobs or trade, but also environmental factors.

But what is meant by sustainable development varies a lot, and different issues arise at different levels. What might be thought sustainable at a national level by one group of stakeholders can differ considerably from what is thought at local or international levels by others. For instance, there are many examples from the UK where a new large-scale housing or tourism development has been rejected by planners at a local level, on grounds that it’s unsustainable. Yet the decision has been over-turned at national level, where it’s considered sustainable against a different set of criteria.

There are many ethical issues around how a decision is reached, including

• who decides
• who has responsibility for what
• which data are used
• what purpose data are used for 

Taking into account the perspectives of many different stakeholders in a situation can involve highly complex and time-consuming processes. Another challenge in decision making is in keeping tuned in to changing contexts. By the time a decision is actually made, about say expansion of transport infrastructure, the assumptions made might well be out of date, at least from some perspectives.

Despite the huge literature on decision making, there are no easy answers to finding decision-making processes that will meet the needs of different stakeholders in complex and uncertain situations. One group of approaches that has the potential to work well in situations of complexity and uncertainty are ‘systems approaches’.

Systems approaches tend to work by helping to make assumptions, purposes and worldviews explicit, and by valuing and working with multiple perspectives. They can also help in keeping interconnections and the possibility of unintended consequences in mind.  A scheme such as an airport’s expansion devised with particular purposes in mind might well have unintended consequences and be viewed quite differently from the future. One question for me when thinking of the Heathrow situation is ‘how systemic is the approach that is being used for making this decision?’

Links

• Systems practice - discover the benefits of a systemic approach
• The psychology of decision making - the thinking processes that help you cope with everyday life prejudice your judgements in other areas
• Video extras: Heathrow under pressure - watch the heads of BAA and British Airways give their perspective on Terminal 5
• Join the discussion - should BAA be allowed to build a new runway at Heathrow?

Courses

• Environmental decision making: a systems approach
• Diploma in Systems Practice

About the author

Chris Blackmore is a Senior Lecturer in Environmental and Development Systems in the OU’s Communication and Systems department. She’s involved in both teaching and research in environmental decision making and systems thinking and practice.

Blogging about

Money Programme

Get the facts behind the big business and finance stories from around the world - and down your street.

With transatlantic air travel set to boom as the Open Skies policy sweeps away old restrictive practices, it seems that nothing stands in the way of our enjoying an ever increasing globe trotting lifestyle. Rising oil prices and climate change seem mere side issues, but are now moving towards aviation’s centre stage.

Until recently aviation has neatly sidestepped the environmental debate. Its CO₂ emissions were excluded from the Kyoto agreement, international agreements banned taxing fuel, and aviation’s emissions were small compared to other sectors. But now the sheer growth in air travel has brought aviation into the environmental spotlight. Aviation is the fastest growing source of CO₂ emissions, having doubled since 1990 and expected to double again by 2020.

"the sheer growth in air travel has brought aviation into the environmental spotlight"

Aviation can no longer be ignored by national and international policymakers, so a pretty big political battle is in the offing that could well change the economics and role of air travel in our lives.

To date environmental actions have been limited. Because international air travel treaties ban fuel tax on international flights, the only real price measure has been on passenger departures (e.g. the UK’s Air Passenger Duty, varying from £10-£80). From 2009 this will shift to a tax on the operator, which'll be passed on in fares.

Of more significance are the European Commission plans for aviation to join the EU carbon trading programme from 2012. Carbon trading is a major plank in the EU’s strategy to control CO₂ emissions. Major energy users are given a CO₂ quota. If they emit more they have to buy permits, or can sell surplus permits to others. Total emissions are capped and then cut back over time.

The EU proposal is for aviation to be capped at its average emissions for 2004-2006. If an airline wishes to exceed its quota, it'd need to purchase carbon permits from any other sector with a surplus. So, if airlines expand their services, as is anticipated, they'll have a major new cost to pass on in fares.

More speculatively, ideas are emerging for personal carbon trading, whereby individuals would be allocated an annual carbon allowance, which would probably allow for only about 1,000 air miles per year. This may sound draconian, and may never happen, but what is now becoming clear that, like it or not, we're going to be forced to face up to the carbon reality of air travel.

Weblinks

• Open Skies - will the consumer benefit? - The Money Programme investigates
• Big business goes green - watch two high-profile business leaders explain their plans
• Calling companies to account - as companies fight for supremacy, how do we make sure they play by the rules?
• What shall we tell the children? - when it comes to climate change, politicians and the media have treated us like kids. Discover what they’re not saying.
• Join the discussion - how do we curb carbon emmissions from aircraft?
• EU cap on air emissions from 2012 - from BBC News

Courses

• Why sustainable energy matters - free course material from OpenLearn
• Energy for a sustainable future
• Working with our environment: technology for a sustainable future

About the author

Stephen Potter is Professor of Transport Strategy at the Open University. His research includes work on the diffusion of cleaner transport technologies and the development of sustainable transport policies.

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Money Programme

Get the facts behind the big business and finance stories from around the world - and down your street.

First of all it is important to say that there are two types of counterfeit product purchases by consumers. Deceptive counterfeiting takes place where the consumer does not know that they have purchased a counterfeit product. In contrast, non-deceptive purchases of counterfeit products take place where the consumer willingly buys the counterfeit products. We’re dealing here with the latter type of purchase. If lawmakers and the producers of genuine branded goods want to take action against counterfeits as well as dealing with the suppliers they may need to consider why the demand exists. Much in the same way as health campaigns against cigarette smoking were based on understanding the various reasons why people smoke, so it is also clear that the consumption of counterfeits is a complex activity which has many causes that need to be understood.

There has been a significant amount of research into why people buy counterfeit brands and the types of people who may be more willing to buy them. Unsurprisingly people who have relatively little regard for the law will be more likely to purchase counterfeit products. Also people who have negative attitudes towards big business are more likely to buy counterfeit products. This may be because they feel that genuine brands charge unfair prices, those people who see themselves as being shrewd shoppers willing and able to beat the system may also be more likely to buy counterfeits. Counterfeits may also appeal to those people who want to demonstrate their status, but don’t have the funds to do so with genuine products. Another factor that may encourage counterfeit consumption is where people are curious and want to experiment. Some people are also comfortable with taking risks and doing something that is illegal may not be a problem.

"an individual’s crime may not be obvious to those around them"

As an illegal activity, what is peculiar about buying and using fake brands is that this is something where an individual’s crime may not be obvious to those around them. The consumer knows of their true origin, the people amongst whom the consumption takes place will only know if the consumer tells them, depending on the quality of the manufacture. So are counterfeit brands popular because they are difficult to distinguish? Or is it because there is a cachet to having bought something much cheaper than the genuine product (even if it is fake)?

The most obvious factor motivating consumer purchase of counterfeit products is their relatively low price but it is commonly appreciated that such products will be of lower quality than genuine products. However some research has found that people who have previously bought counterfeit goods believe that they are as good as genuine products – no doubt that will encourage them to repeat their actions.

Clearly the manufacturers of branded goods have a great deal of work to do when it comes to consumer perceptions of counterfeit goods and the attractiveness of buying them.

Weblinks

• Fake football shirts - Can Umbro stop the flood?
• Securing your brand – how do you build value into a brand and how do you preserve that value?
• Take it further - sharpen up your business skills
• Join the discussion - why do people buy fakes? Is it really such a bad thing?

Further reading

• Counterfeiting Exposed: Protecting Your Brand and Customers by David M. Hopkins, Lewis Kontnik and Mark Turnage, published by John Wiley & Sons

Courses

• Marketing in a complex world

About the author

Haider Ali is a lecturer in marketing at the OU Business School. He has extensive experience of delivering courses to people in industry ranging from the most junior functions in organisations to senior executives.

Blogging about

Money Programme

Get the facts behind the big business and finance stories from around the world - and down your street.

A lifetime of experience in computer based accounting systems did not help Jen Howell when she went looking for a job in her mid-50s. After months of fruitless searching and job interviews that focused on her age not her skills, she decided to return to what she knew best, not as an employee but as a self-employed sole-trader. However, she could not rely on attracting a steady stream of clients from the large organisations where she used to work. Transforming this challenge into an opportunity, Jen diversified into general IT training and book-keeping services for fellow small businesses and self-employed. She knew that most small businesses detest preparing annual accounts and, from that insight, 'Books in Boxes' was born. Clients bring all their receipts and invoices in boxes and Jen turns the mess into books of well-kept accounts. Jen is now pushing the official retirement age but is still going strong, actively recruiting clients through accountancy service websites.

Similarly, Mike Crisp hit strong age barriers when he began job-hunting in his mid-50s following a 4-year bout of late-career higher education. With good experience as a RAF technician followed by years as a systems engineer in the computer and aircraft industries in Britain and Saudi Arabia. On returning to Britain he decided to get the university education that he had missed when young. Instead of his degrees in law and psychology unlocking the job markets for him, however, he found it hard to get a job. Impressed by an Australian business that provided house renovation and maintenance services for an affordable set fee, Mike founded HouseHubbies when he was aged 58. Five years later the firm was thriving, having opened two new sites in the Manchester and Staffordshire areas as well as employing Mike and nine other people. 

These two stories of age-related barriers prompting late life entrepreneurship reflect a growing trend. A drop in birth rates and longer life-spans due to increasingly more effective health care means the populations of most developed economies are ageing. At the same time, global competition and technological change, plus a perception that it is hard to re-train older workers, have skewed demand in the jobs markets towards a diminishing proportion of younger workers. This is leading to a steady leakage of experience-based knowledge and skills from the labour force and a worrying rise in the ‘dependency ratio’ – the proportion of working people supporting, through their taxes, the economically inactive. Those aged 50 or more account for some 70 per cent of the economically inactive. In 2004, the National Audit Office estimated that the then 2.7 million people between 50 and State Pension Age (SPA) who were not working were costing the UK economy £18-£31 billion in benefits payments plus lost output and taxes.

It is not surprising, therefore, that governments across Europe are concerned to increase employment and entrepreneurship among the post-50s by as much as they can. In Britain, the Performance and Innovation Unit (PIU) 2000 report, Winning the Generation Game, recommended a selective raising of the pension age (which is now underway) and legislation to prohibit age discrimination at work, in the job markets and elsewhere (implemented as the Age Discrimination Act in October 2006). Employment rates have improved. Increasing the participation of ‘seniors’ in the labour market, is also an important part of the EU 2005 Lisbon Strategy. EU studies confirm that overall employment among seniors (people aged 50 -64 years) in the enlarged EU rose from 37 per cent in 2000 to 43 per cent in 2005. Britain was among those that had reached or exceeded its 2010 target. However, the picture in relation to self-employment and entrepreneurship was not so positive.

There are two main sets of reasons why older people decide that they should keep working – financial necessity and satisfaction and the need to be active. With regard to the first set, the most common financial pressure comes from inadequate pensions (the Pensions Commission suggests that about 11.3million people are not saving enough to fund their retirement).

The post-50s self-employed entrepreneurs come from three main stands:

• existing self-employed and small business owners who decide to continue to work
• high-earning ex-employees who have high levels of education or professionally training, with a strong work history, good work ethic and well motivated, who choose to continue
• those with lower incomes working through necessity.

"only 10% of post-50s who lose their jobs find paid-employment"

With regard to this third category, it is worth noting that only around 10 per cent of post-50s who lose their jobs find paid-employment after fifty so, even if they just drifted into self-employment, they are still more entrepreneurial that some 90 per cent of older people.

For those looking to continue working, help and support is available from various organisations who have started working in this area. For example, PRIME is a not-for-profit organisation established in 2001 by the Prince of Wales which specializes in assisting the self-employed. TAEN is an independent charity with a wider remit: all aspects of age and employment. These organisations, like their peers, offer advice and resources to help people who feel excluded from employment by their age.

Find out more

• Investigating entrepreneurial opportunities course
• Take it further - sharpen up your business skills
• Join the discussion - why can't older workers get jobs?
• Too Young to Retire - Ageing entrepreneurs are still rocking
• What makes an entrepreneur? - take a test to discover if you’ve got what it takes
• Just Do It - Bobby Friction asks Alan Sugar and others how to make a success of your business
• Free magazine

About the author

Colin Gray is Professor of Enterprise Development at the OU Business School, where he is responsible for research and teaching in small business and entrepreneurship.