How Middle Eastern retailers can keep up with E-commerce

How Middle Eastern retailers can keep up with E-commerce

This article is part of the World Economic Forum on the Middle East and North Africa and is co-authored by Abdellah Iftahy, Partner, McKinsey & Company, Franck Laizet, Partner, McKinsey & Company and Zaid Ghazaleh, Associate Partner, McKinsey & Company.

A saleswoman attends to a customer at the cash counter inside a shop at Dragon Mart in Dubai, March 2, 2011. Built in the shape of a dragon, the 1.2 km long and 150,000 sqm large mall is a trading centre with almost 3,950 shops selling mainly Chinese products ranging from office appliances to garments and daily products.  Picture taken March 2, 2011.    REUTERS/Jumana El Heloueh (UNITED ARAB EMIRATES - Tags: BUSINESS) - GM1E73318X601

01 Apr 2019

Traditional bricks and mortar retail is under attack globally. Retailers have struggled to compete with the growing popularity of large-scale competitors such as Amazon and Alibaba. The industry is also in the grip of a revolution powered by digital technology, as people shop online rather than in stores. Millennials comprise the largest internet audience, and will have more buying power than any generation before. But they still want to touch, feel and explore products. Shopping is becoming more of an experiential activity, during which stores compete for consumers’ “share of wallet”.

Middle Eastern retailers and consumer goods companies are even more vulnerable, as the pressure from e-commerce and changes in consumer buying behaviour are compounded by rising costs associated with economic reforms, such as workforce localization, taxes, and increasing fuel and electricity prices. As prices rise, consumer buying power and confidence is becoming subdued.

In fact, our latest survey, conducted in September 2018, reveals that consumers in the Middle East are spending even more cautiously than they have in previous years. They are also more anxious: 80% of survey respondents in Saudi Arabia and 72% in the United Arab Emirates are worried about losing their jobs. In both countries, more than 40% of respondents said they’re cutting down on spending and paying closer attention to prices.

Consequently, traditional retailers have limited levers to operate in response. They have a large fixed base of assets, which they need to rethink as shoppers favour the convenience of purchasing online rather than visiting stores. It is absolutely critical that retailers think about how to operate at maximum efficiency, with a hard focus on cash and working capital, in order to survive to the next stage. They are in a paradoxical moment where their revenues and returns are declining, yet they must invest in technology. It is not always easy to justify this spend with investors. And in thinking beyond the present to the different value propositions and approaches needed to recapture the customer, they must re-skill their employees and recruit new talent.

Customers are now more interested in experiences than products. In considering how to stay with them throughout their buying journey and not just at the end of it, retailers need to make many changes in the way they reach their customer, how they interact with them, what they learn about them, and how they ultimately sell them a product, service or experience. Convenience is also becoming important to consumers as they move their retail activity online. In fact, 50-60% of consumers state that saving time is one of the main reasons why they shop online.


Digital technologies and changing shopping habits are a clear threat to traditional retail business models. But there are positive ways to respond to these trends. To embrace these opportunities, real-estate developers must get closer to consumers and figure out how to meet their evolving wants and needs.

The good news is that by leveraging their assets – physical proximity to consumers, logistics, brand, in-store experience – traditional players still have the right to win. The Middle East has a young population with aspiring lifestyle choices, and with the various macroeconomic transformations taking place, buying power will recover and grow. But retailers must be willing to undertake rapid, radical and lasting transformation when it comes to efficiency, and the ways they embrace technology and offer products.

A transformation can be designed around the following five fundamentals or key success factors.

First of all, the full leadership team – not just the Board and CEO – has to be behind the change required to turn the business around.

Second, this motivation needs to move beyond the boardroom fast and engage the front line, going deep and wide across the organization.

In the Middle East, those two elements are typically in place. It’s the following three that need more focus.

The right structures need to be put in place to ensure that any response is effectively executed and delivered – for example how the business is organized, how governance is implemented, and how objectives and deliverables are executed.

Culture is also important. This is not about how to respond from a technical point of view, but the changes necessary in the mindsets and behaviours of everyone in the organization to make the transformation a success.

The last element is identifying, developing and elevating the best people in your organization, because they are the resource who will take you from point A to point B.

There is no doubt that physical retail is here to stay, and will keep its place alongside the online marketplace. Even e-commerce giants are entering into physical retail, as digital natives invest offline – see Amazon acquiring Wholefoods, and Alibaba’s Hema concept. These new stores have decoupled the notions of “shopping” and ‘“buying”, showing the face of retail is changing. Traditional retailers’ main challenge is to accelerate the pace of transformation, while ensuring they address, in a holistic way, the growth side, cost side, cash side and re-skilling of employees, in order to deliver results.

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Invigorating Female Entrepreneurship in Egypt’s Ecosystem

Invigorating Female Entrepreneurship in Egypt’s Ecosystem

For purposes of mainly Invigorating Female Entrepreneurship in Egypt’s ecosystem, a “SHE CAN – 2019” organized by Entreprenelle, kickstarted by Rania Ayman in 2015 as an organization eventing conferences as a mean to empower and motivate women so as help them believe in their ability to change their destiny.

SHE CAN – 2018 was elaborated on by Women of Egypt Mag (picture above) and here is 2019’s as covered by Entrepreneur of today.

The conference held a wide range of panel discussions, talks and workshops on innovative thinking, creativity, technology, raising capital and invigorating female entrepreneurship in the ecosystem.

Egypt’s SHE CAN 2019 Focuses On Failures As Stepping Stones To Success

By Entrepreneur Middle East Staff, Entrepreneur Staff, April 1, 2019.

Entrepreneur Middle East Staff

You’re reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.

Egypt's SHE CAN 2019 Focuses On Failures As Stepping Stones To Success

SHE CAN 2019, a conference dedicated to MENA women entrepreneurs, hosted its third annual edition at the Greek campus, Downtown Cairo, Egypt, with the theme ‘Successful Failures’. Launched by Entreprenelle, an Egypt-based social enterprise which aims to economically empower women through awareness, education and access to resources, the conference held a wide range of panel discussions, talks and workshops on innovative thinking, creativity, technology, raising capital and invigorating female entrepreneurship in the ecosystem.

Gathering more than 5,000 participants and 50 partners, including UN Women, the Swedish Embassy, the National Council for Women, Nahdet Masr, Avon, Orange and Export Development Bank of Egypt, it also highlighted the endeavors of Entrepenelle alumni. It was also an opportunity for aspiring entrepreneurs to learn from sessions featuring tips on pitching business ideas, mentorship, as well as startup competitions. Female-founded startups were also able to showcase their products and services in an exhibition area.

Speaking about the conference focusing on the necessity to experience failure on one’s entrepreneurial path, Dorothy Shea, Deputy Ambassador of the US Embassy in Cairo, commented, “As far as I’m concerenced, the sky is the limit. Women should be able to achieve whatever their dreams are. What I was struck by was this idea of “successful failures,” we need to not fear failure, it’s not a destination, it is a stepping stone to success. Sometimes there can be a fear of failure, but as part of this entrepreneurship ecosystem, they are really trying to move that inhibition away. We learn from our failures and then we take our plans to the next level. I was really inspired by this theme.”

Founded in 2015, Entreprenelle has more than 10 entrepreneurship programs conducted in nine governorates, including Cairo, Alexandria, Mansoura, Minya, Assiut, Sohag and Aswan.

Related: Embracing Failure: Lessons From History’s Most Successful Entrepreneurs

More from Entrepreneur : Next Article

How to fund the growth of the region’s entrepreneurs

How to fund the growth of the region’s entrepreneurs

“Developing an angel investor pool in the Middle East will create more opportunities and will strengthen regional economic growth” said Ramesh Jagannathan, Managing Director of startAD when introducing his article for Arabian Business weekly dated March 16, 2019.

Here is his opinion.

How to fund the growth of the region’s entrepreneurs

Financing the angel investment market in Africa, Asia, Europe and America is estimated to be worth $50bn
We live in an exciting age for entrepreneurs. Fuelled by governments in the Middle East, the desire of transforming to an entrepreneurial based economy and boosting investment into building a healthy start-up ecosystem is high-up on the agenda. While there are sufficient funds to fuel potential start-ups in the ecosystem, the risk averse nature of venture capital (VC) firms mean they tend to concentrate their investments in later stage start-ups with crisper valuations. In a mature ecosystem, less than 1 percent of start-ups receive VC funding, and in emerging markets, this number drops by a factor of two. As VC investments continue to move towards more mature start-ups, there is a widening void of funding for early stage start-ups. The effect is not as severe in mature ecosystems as in an emerging ecosystem for a number of reasons.
Angel investors have traditionally filled this void. For example, in the US, annual angel investments of $24bn are being made in over 64,000 start-ups. In fact, 74 percent of all Silicon Valley investments are from entrepreneurial angels, who were previously a founder or a CEO of their own start-up. The phenomenon of “founders funding founders” highlights the organic nature of the process, that they are “local” and have a deep understanding of the entrepreneurship ecosystem and play a vital role in building the ecosystem. This deep knowledge helps to mitigate some of the risks that come with ambiguous valuation of early stage start-ups. More than 60 percent of the angels become active mentors of the start-ups they have invested in and generally take a board seat. More than half of them have a technology background.
By 2030, 88 percent of the next billion people joining the middle class will primarily come from India and China
Having the “right” angel investor tends to de-risk the entrepreneurial process and increases the start-ups’ success rate in raising funds in future rounds. Angels generally see 11 percent of their portfolio producing positive returns.
On the other hand, in emerging ecosystems, there is a dearth of previously successful entrepreneurs, thereby creating a “catch 22” situation. The time scale of the process to build a sustainable entrepreneurial ecosystem is made more acute by the fact that 67 percent of start-ups fail at some point in the process due to inability to raise a subsequent round of financing. The paradox is this: to have a healthy, sustainable entrepreneurial ecosystem, one needs a significant pool of high quality start-ups to cater to a large consumer middle-class and angel investors who have been successful entrepreneurs, preferably within the ecosystem. In other words, while having significant individual or group (eg syndicates) wealth is necessary, they are definitely not sufficient to build a robust ecosystem in an emerging economy, if the wealth is not “hard-wired” to local entrepreneurial experience. Ecosystems are organic in nature.
In India and China, this enigma has been resolved. While the pool of technology talent in these two countries has always been immense, due to the absence of middle-class, post WWII saw a significant “brain drain” from India and China to the US and Silicon Valley. The exodus of the “cream of the crop” from India, especially from the Indian Institutes of Technology (IITs), was unstoppable after the 1970s and from China since 1979, when the Chinese government started to send its best and brightest students and scholars to the US to catch up with western science and technology. By 1990, about 33 percent of all scientists and engineers in Silicon Valley were from India and China. Of these. 71 percent of these Chinese and 87 percent of these Indians arrived after 1970.
Going forward, by 2030, 88 percent of the next billion people joining the middle class will primarily come from India and China. We are now seeing a significant reverse “brain drain” of Indians and Chinese engineers, scientists and investors back to their homelands. About 80 percent of those returning hold graduate degrees in science, technology or business. China now boasts a sound angel investment culture, and while it’s still in its early stages in India it is gaining steam rapidly as the VC infrastructure is getting foundationally strong.
Turning our focus now to the UAE, and the GCC countries, the opportunity to “ride the wave” of India and China’s global tech dominance is crystal clear. But there are still gulfs to cross, such as the absence of a large, local technology talent pool. Without a disciplined and informed state-of-the-art process that dovetails to a VC infrastructure – by leveraging the local societal sensibilities and strategic inter-governmental alliances – the strength of access to large sums of local capital could quickly become our Achilles’ heel.
By all the ingredients for a master recipe to create a dominant UAE digital economy are in place and we need to diligently prepare, suit up and ride the long wave
Peter Thiel, co-founder of PayPal, discussed the role of governments in stimulating entrepreneurial ecosystems and compares the strengths of funding (supply side) versus founding based (demand) policies. Thiele recommended supply side policies as a mechanism to catalyse growth. However, in emerging economies, we could describe it as a “many body problem”.
We need to stimulate the process of accelerating the flow of global start-up talent into the ecosystem through the UAE.
Besides the government, this process should embed the local competency private sector stakeholders, such as in aviation, energy, transportation and logistics and finance industries. The Venture Launchpad programme at startAD is a classic example that shows significant promise.
Simultaneously, we should educate the regional angel investors about the mechanics and rigors of angel investment in digital start-ups and democratise access. The annual Angel Rising Symposium, now in its fifth year, brings the best minds from around the globe to discuss the best practises that are regionally relevant. The third piece of the puzzle is about building local capacity. StartAD and Khalifa Fund are partnering together to build the acceleration ramp to the global digital economic highway through programmes such as Ibtikari and Pitch@Palace.
All the ingredients for a master recipe to create a dominant UAE digital economy are in place and we need to diligently prepare, suit up and ride the long wave, leading the MENA region.

Entrepreneurship space in the Arab  world

Entrepreneurship space in the Arab world

Zawya #sme posted this article dated 13 December 2018 after conducting a series of interviews with many stakeholders in the Arab entrepreneurship space to gauge their views on the opportunities and the challenges that they face.

The image above is of a technology start-up firm used for illustrative purpose. Getty Images/Caiaimage/Agnieszka Olek

Special Report: Entrepreneurship in the Arab world: the opportunities, challenges, the stakeholders and the funding environment

By Yasmine Saleh, ZAWYA

Governments across the Arab world have been spending money on consultants to set up incubators and other tools to help those with business ideas create new firms and scale them, as more private sector jobs will be needed to provide employment for a young and fast-growing population.

But how successful are these, and what are conditions like for those brave souls who take a plunge and quit their jobs to start their own businesses? Are there enough opportunities, how hard is the journey and which track should the Arab entrepreneurs take to achieve their goals? And what happens if they fail?

Over the past three months, Zawya has conducted a series of interviews with many stakeholders in the Arab entrepreneurship space to gauge their views on the opportunities and the challenges that they face.

The Data

There are two major annual reports into the funding for start-ups in the Arab region carried out by Dubai-based research and funding platforms. One, carried out by Arabnet in collaboration with Dubai’s Mohammed Bin  Rashid Establishment for SME Development (Dubai SME), looks at the investments in the digital space across 11 countries in the Arab world.

The second, by Magnitt, a Dubai-based start-up platform that provides entrepreneurship research and data, looks at funding from angel to growth capital stages in 16 Arab countries.

  • According to the Arabnet/Dubai SME report, the number of active investors in the market increased by a compound annual rate of 31 percent between 2012 and 2017, from 51 in 2012 to 195 last year. It said around 40 new funds were created between 2015 and 2016 and around 30 new funds between last year and May 2018. Of these 30 new funding institutions, around one third are based in the UAE, while one quarter are based in Lebanon.
  • A majority of the investors are based in four Arab countries: The UAE hosts 32 percent, Saudi Arabia 17 percent, Lebanon 13 percent and Egypt 10 percent.
  • The investor community is almost equally spread between early stage funders such as angel investors, seed funders and incubator programmes, and later-stage venture capital, growth capital and corporate investors.
  • According to Magnitt’s report, 318 start-up funding deals were made in 2017, up from 199 in 2016. However, deal volumes for the first nine months of this year declined 38 percent to $238 million, from $383 million achieved in the same period last year.

The Opportunity

The start-up success stories in the region are growing, with the best-known so far being Dubai-based Careem and Souq.com.

Careem, which started in 2012, is a local ride-hailing app which has been through many rounds of venture funding, with the most recent $200 million fundraising completed in October bringing its valuation to over $2 billion, according to a Reuters story, citing an unnamed source.

Souq.com was founded in 2005 by Syrian entrepreneur Ronaldo Mouchawar and was sold to online retailer giant Amazon for $580million, according to documents filed by Amazon in April 2017.

Egypt was home to one of the region’s first incubators, Flat6Labs. It was founded in Cairo in 2011. It was deemed a success and later opened branches in Tunisia, Bahrain, Saudi Arabia, the UAE and Lebanon.

Mirek Dusek, the World Economic Forum’s deputy head for geopolitical and regional agendas, told Zawya in a telephone interview in September that the increasing interest by investors in the start-up scene is driven partly by governments, but also by local, private sector interests.

“We have a different picture than from five to ten years ago and that picture has changed dramatically because of the involvement of the family businesses, the traditional long-standing family firms that we have seen in the Arab world are now setting up venture capital arms and also sovereign entities, PIF (the Pubic Investment Fund) in Saudi Arabia or elsewhere are increasingly active in this space.”

 “Sovereign entities, particularly through sovereign wealth funds are setting up arms that are specifically targeting SMEs or start-ups in their home economy… This is quite healthy as long as it does not crowd out other competitors,” he added.

 The Pubic Investment Fund (Saudi Arabia’s sovereign wealth fund) is an investor-partner in ecommerce platform Noon, which was founded by UAE-based businessman Mohamed Alabbar.  The portal was launched late last year with an initial investment of $1 billion.  

Abu Dhabi’s Mubadala, a state-owned investment company, has pledged $15 billion to the $100 billion Softbank Vision Fund, a tech fund run by Japanese technology company Softbank in May last year, while Saudi Arabia’s PIF was the fund’s biggest investor, with a $45 billion commitment.

According to the Arab Competitiveness Report 2018 released in August, “research has shown that countries and regions characterized by higher entrepreneurial activity tend to have higher growth rates and greater job creation, the main pathways through which to grow the global middle class”.

The report, which was compiled by the International Finance Corporation (IFC), the World Economic Forum and the World Bank, added: “Global experience shows that entrepreneurship stimulates job creation in the economy, as most new jobs are created by young firms, typically those three to five years old.”

Saudi Arabia, the Arab region’s biggest economy, needs to create 1.2 million jobs by 2020 to reach its unemployment targets, Reuters reported in April, quoting an official in the Ministry of Labor.

The unemployment rate for Saudi nationals stood at 12.9 percent of the population in the second quarter of 2018 – the latest for which figures are available.

Anass Boumediene, one of the founders of Dubai-based eyewa.com, an online portal that sells spectacles and contact lenses that expanded to Saudi Arabia last year, said the region still lags behind others with regards to the size and type of support provided by governments to start-ups.

“What needs to be improved in the region is governments’ involvement in fostering entrepreneurship. In Europe, Asia, or the U.S., governments are a lot more active in supporting entrepreneurs, providing access to simple and cheap legal frameworks for startups and VCs (and) government funding in the form of grants, loans or equity to both startups and VCs, and other ecosystem-building infrastructure facilitating access to talent and technologies,” he told Zawya in an interview in September.

Aysha Al-Mudahka, the CEO of Qatar Business Incubation Center (QBIC), told Zawya in a phone interview in September that it is important both for start-ups and investors to feel they have “the consent of the government”. This will make “the private sector feel comfortable to invest in start-ups, especially in the Arab world, as that will lead to better regulations and support for start-ups.” 

QBIC is a government-backed incubator, co-founded and solely owned by Qatar Development Bank.

Read more on the original Zawya publication

Massive impact of meat-eating habits on mostly the environment

Massive impact of meat-eating habits on mostly the environment

For some time now, all media have shown that the massive impact of meat-eating habits on mostly the environment, and on climate change in particular need no more any evidencing.  In effect, most studies demonstrated that low-meat diets could reduce the costs of climate change mitigation by as much as 50 per cent by 2050.  Here is the last one from the UN.

Even though meat production is known to be a major contributor to climate change and environmental destruction, worldwide demand for meat continues to rise, said UN environment agency, UNEP, in a statement released on Thursday.

Every bite of burger boosts harmful greenhouse gases: UN Environment Agency

Daniil Nenashev/World Bank   A herd of cattle graze in a pasture near a village in Kazakhstan.

8 November 2018

Climate Change

According to the World Economic Forum, the beef and dairy industry is responsible for more greenhouse gas emissions than the world’s biggest oil companies, with the combined emissions of the top meat and dairy companies exceeding those of highly industrialized nations such as Germany or the UK.

Despite this fact, the global meat industry continues to grow, with the Food and Agriculture Organization (FAO) predicting a 76 per cent in global meat consumption by 2050: more meat will be eaten than ever before in our history.

Beef bonanza creates negative consequences

This is bringing about a wide range of negative consequences for the planet: meat production contributes to the depletion of precious water resources – around 1,695 litres is needed to produce just one quarter-pounder burger – and according to the Yale School of Forestry, cattle ranching is the largest driver of deforestation in every Amazon nation, accounting for 80 per cent of total clearance. Raising animals takes up about 80 per cent of agricultural land, but only contributes to 18 per cent of the world’s calories.

Whilst admitting that it is unrealistic to expect the world population to cut meat from its diet overnight, James Lomax, Sustainable Food Systems and Agriculture Programme Management Officer at UN Environment, is calling for an ecological balance to be struck: “Reducing intensively farmed meat consumption is good for people and the planet. That means eating a sustainably reared or alternative burger or steak now and then, rather than an intensively-farmed mass-produced version three times a week.”

There is also a known cost to human health, especially when it comes to eating processed meat: Antibiotics used to rear livestock and keep animals disease-free often end up in our food, particularly products sold by fast-food chains, contributing to antibiotic resistance in humans.

Plant-based diets, growing in popularity

However, alternatives are slowly but surely becoming more popular – with research reportedly predicting that plant-based food diets will become more common-place – including a small but growing trend for meat-free “meat.”

Two companies making headlines, and money, in this space are US-based Impossible Foods and Beyond Meat, both of which have received the UN’s highest environmental honour, the Champions of The Earth award.

These innovators, described by UNEP as “plant-based revolutionaries,” invested in research to strip the basic building blocks of meat down to protein, fat, water and trace minerals, recreating meat entirely from plants—at a fraction of the cost to the environment.

According to a study by Beyond Meat and the University of Michigan, Americans – who eat an average of 3 burgers per week – could save the amount of greenhouse gas emissions produced by 12 million cars, simply by swapping one of those weekly meals with a plant-based alternative.

Plant-based “meat” production also uses up to 99 per cent less water, up to 95 per cent less land, and generates up to 90 per cent fewer harmful emissions than regular beef burgers, whilst consuming nearly half the energy.

The UNEP statement is part of a series of discussions being generated by the agency, urging people to “Think Beyond and Live Within,” during the build up to the 2019 UN Environment Assembly, which will take place in the Kenyan capital Nairobi, between March 11 and 15.

FAO|UNEP|food production|greenhouse gas emissions

 

Some countries are far more unequal than others

Some countries are far more unequal than others

Three reasons some countries are far more unequal than others

By Sandy Brian Hager, City, University of London

The picture above is of Hyejin Kang / Shutterstock

Why do the richest 1% of Americans take 20% of national income, but the richest 1% of Danes only 6%? Why have affluent British people seen their share of national income double since 1980, while over the same period, the income share of wealthy Dutch hasn’t budged?

Technological change and globalisation act as powerful forces for income distribution, but these market processes cannot alone account for the continued range in top income inequality in different countries. After all, some of the most technologically advanced and globalised countries, such as Denmark and the Netherlands, are the ones that are the most equal.

To explain why some advanced capitalist countries are more unequal than others, we need to look beyond the market and explore the role of politics and power in shaping distributive outcomes.

Want to have a more equal society? In a critical review of recent research, I’ve found that the formula is surprisingly simple: tax the rich, vote for left-wing parties, implement electoral systems of proportional representation, and empower trade unions.

1. Tax levels

One key political factor is government policy, especially taxation. Countries that have made the biggest reductions to their top rates of income tax have seen the largest increases in top income shares. For example, in more equal France, the top rate in 2010 was only 10% lower than it was in 1950. Meanwhile, in the more unequal US it was 50% lower. At the company level, CEO pay tends to be much higher when the top income tax bracket is lower.

Tax policy plays a pivotal role in explaining top-end income inequality. But policies do not emerge out of thin air. These variations in the policies that influence distributive outcomes at the top result from social power relations, which have been shown to shape the evolution of top-end income inequality over time.

2. Politics

The formal political arena is one site where these power relations unfold. A recent study by Evelyne Huber, Jingjing Huo, and John Stephens studied the income share of the top 1% in postindustrial democracies from 1960 to 2012. They found that centre and right-wing governments in rich countries are consistently associated with increases in top income shares. Meanwhile, policies of left-wing governments generally reduce inequality at the top end.

The institutional design of the political system also matters. Electoral systems of proportional representation tend to favour left-wing parties, while systems that are led by majority rule favour right-wing ones. Certain institutional features, such as having presidents and bicameral legislatures encourage gridlock and empower special interests to block progressive policy reforms.

There are questions about the extent to which the institutional story can be generalised, but as Jacob Hacker and Paul Pierson show, it is crucial in explaining the spectacular rise of the super-rich in the US.

3. Trade unions

In addition to left-wing parties, strong trade unions act as a power check on top income shares. Unions can align with left-wing parties and push for egalitarian policies. Within the firm, unions can bargain to increase their wages and reduce the amount of revenue going to executive compensation and shareholder dividends.

One academic study found that unionisation decreased the compensation of top US executives by 12%. Another found that in US industries with higher levels of union membership, the gap between executive and non-executive pay was narrower. In the numerous cross-national statistical studies that I surveyed the rate of unionisation is one of the few variables consistently associated with lower top income shares.

Prompted in many ways by the pioneering efforts of Thomas Piketty and his collaborators, the study of top incomes has made remarkable progress in the past decade. But there is still room for further exploration.

The study of top incomes tends to be US-centric. There needs to be more in-depth analysis of the experiences of other countries. We need further research that investigates who the top 1% are in different countries, and how their political preferences compare to other segments of the population. We also need to explore in much greater detail the racial and gender dimensions of the income hierarchy in different countries.

Given the compelling evidence that living in highly unequal societies destroys our minds, our bodies, our relationships, our communities, and our planet, this is something we should all take seriously. The better the grasp we have of the causes of top-end income concentration in different countries, the more effective we will be in assessing what, if anything, can be done to slow or even reverse it.The Conversation

Sandy Brian Hager, Senior Lecturer in International Political Economy, City, University of London

This article is republished from The Conversation under a Creative Commons license. Read the original article.