PROTECTING BUSINESS’
RESEARCHERS EXPLORE HIERARCHY OF CONSUMER BILLS COUNTRY: Australia SCHOOL: University of Sydney Business School The University of Sydney Business School has uncovered which financial products are more valuable to Australian and New Zealand consumers when they feel the cost-of- living pinch, and on which they are likely to default first. Working with credit bureau Illion, the researchers compiled a list of the top 10 bills most at risk. Dr Andrew Grant, a senior lecturer in finance at the school, analysed Australasian data from the bureau and drew on further research into alternative finance and lending platforms to confirm the products that are more valuable to consumers under stress. “We have found that, ultimately, preserving an open line of credit – some level of liquidity – is very important when it comes to financial stress,” said Grant. “It is probably not something people have actually thought about until it directly affects them. For instance, one credit card can be maxed to the limit, while the other may still have AUS$10k on it.” Grant noted that some 47,557 people in the Australian sample defaulted on either their credit card or personal loan. Of this number, 30,546 (64 per cent) only defaulted on their credit card, 8,126 (17 per cent)) only defaulted on their personal loan, and 8,885 (19 per cent)) defaulted on both. “Thus, consumers are nearly four times as likely to default on their credit card, compared with their personal loans,” he observed, noting that customers will often not want to damage the relationship with their bank. “I might get better hardship benefits from working with the bank as opposed to a third-party lender. An existing lender might have more accurate information about me – and I could benefit from this later on.” He added that more innovative, forms of credit such as ‘buy now, pay later’ benefit from product design. “[These] generally involve relatively small payment sizes, and the money comes straight out of the person’s account in four payments. This often means they jump higher in the queue of payment priorities by default.” Dr Grant concluded that lenders should pay careful attention to the products a consumer holds from other lenders. CD
ENDANGERED SPECIES
COUNTRY: Denmark SCHOOL: Copenhagen Business School
Glass-blowing is one example of an endangered traditional craft business whose preservation is the focus of a new four-year research project at Copenhagen Business School (CBS). Crafts covered by the project include those producing products made of wood, leather, paper, metal, stone, glass, clay and ceramics and will cover parts of Denmark, Sweden, Italy and the Faroe Islands. “Traditional crafts are vital for local economies and for maintaining diversity of culture in Europe,” commented Marta Gasparin, associate professor at CBS and leader of the project. Yet, there is recognition that traditional crafts need to adapt to survive in the modern world. “By doing so, they can create jobs and generate economic growth in European regions,” added Gasparin. As part of the project, artisans will be supported in the development of new sustainable production methods, as it seeks to show that Europe can foster the traditional crafts’ adaptation to present-day realities and technological change without sacrificing authenticity. In quantitative terms, the project is targeting a five per cent rise in sales for all businesses involved. Traditional hand-crafted products have qualities that industrialised and mass-produced goods do not always have, such as longevity and uniqueness. Yet, one particular challenge identified by the project is that these products have become unfamiliar, or invisible to many in the modern world. Researchers will therefore also be looking at better ways of sharing knowledge about the value of crafts and offer guidance for policymakers on how these aspects of cultural heritage can be safeguarded. “Earlier research has shown that modern generations are somewhat distanced from traditional crafts. They do not appreciate the quality of the products, how they are made or why they are priced the way they are. This lack of familiarity poses a challenge as it means that young people have no desire to learn these crafts and that these businesses are sliding into economic difficulty,” explained Gasparin. Known as Hephaestus, the project takes its name from the Greek god from whom humans learned to use fire, technology and crafts. TBD
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