The networking-to-smartphones company currently employs around 80 R&D engineers in its existing office in Ipswich, and will increase that to 300 staff in the UK by 2017. Huawei is now the largest telecommunications equipment maker in the world, employing more than 150,000 people worldwide. It has stepped up its focus on Europe over the US after facing suspicion about its historically strong ties with the Chinese state and military. For example, in October last year in the US, the House Permanent Select Committee on Intelligence published a report which said the risks associated with provisioning Huawei equipment as part of the country’s critical infrastructure “could undermine core US national-security interests” claims which are denied by the company. Earlier this year, UK politicians called for an urgent review of checks on networking equipmen t supplied by Chinese telecoms giant Huawei for use in the UK’s critical national infrastructure. The UK government also said social gaming company Rekoo will become the first high-profile Chinese tech company to set up in London’s Tech City. Rekoo has more than 15 million gamers who play its games daily and 10 million on smartphones, and will initially have 10 staff in its London office. The investment plans were announced during chancellor George Osborne’s visit to China to promote UK tech businesses. The government hopes that UK businesses specialising in areas such as smart cities, e-health and education tech will be able to benefit from selling into China’s gigantic market. As such, a delegation of UK tech companies has travelled with Osborne, with the aim of introducing UK companies to what it described as the ‘gatekeepers’ to online Chinese consumers such as Sina Weibo and Tencent or search engine Baidu. Tech execs travelling with the delegation include Mike Lynch of Invoke Capital, Eric van der Kleij, head of Level 39 , and Jon Reynolds, co-founder of Swiftkey.
The unemployment rate was 7.7 percent in the June-August period, unchanged from May-July and in line with most forecasts in a Reuters poll. The Bank of England, hoping to give Britain’s economic recovery a boost, said in August it will not consider raising interest rates before unemployment falls to 7 percent. The BoE forecasts that will not happen before the third quarter of 2016. Investors largely expect unemployment to fall much faster and many have put money on a rate hike in early 2015. Sterling briefly rose to its highest level in a week against the dollar and the euro following the data. Some economists said the Bank of England’s timeframe for unemployment to fall to 7 percent – which hinges on companies getting existing workers to increase output rather than on hiring new staff – did not appear to be under serious threat. “The unemployment number will move slowly, that much is clear,” said Peter Dixon at Commerzbank. He said the solid 155,000 increase in the number of people in employment was simply keeping pace with an increase in the labour force. The percentage of people aged 16-64 who are in work rose to 71.7 percent, the highest since the three months to February 2009 and up from 71.4 percent in the March-to-May period this year, the ONS said. Even as Britain’s labour market picks up, many people in work are not seeing an improvement in their living standards. Average weekly earnings growth including bonuses slowed sharply to 0.7 percent in the three months to August compared with a year earlier. Excluding bonuses, pay grew 0.8 percent. By contrast, inflation in September was 2.7 percent, having exceeded the BoE’s 2 percent target since December 2009 and persistently outstripped wage growth. For public sector workers, the picture was even worse. Their pay fell 0.5 percent in the three months to August, the first ever fall on a three-monthly basis, the ONS said.
UK regulator says it plans to block Thames Water price hike
Traditionally, low-cost regions such as India were more attractive, as offshore services supported cost-cutting strategies, but this is changing. Today it is a balance between different factors. The team at CGSS, led by Professor Ilan Oshri , considered three trends: businesses are looking for more from suppliers and expect a positive impact on their business; the increased complexity of sourcing requires managerial capabilities rather than just technical capabilities; and service providers want to set up operations in lucrative markets. The research, sponsored by UK Trade and Investment, compared seven locations in Western, Central and Eastern European countries that are seen as the main competitors to the UK for outsourcing services The results of our analysis leave no doubt – IT and business process outsourcing vendors would benefit from having operations in the UK, said Oshri. There is a current trend seeing businesses having IT services and BPO carried out in nearshore locations, particularly in Central and Eastern Europe . These locations offer highly skilled IT professionals and are in relatively close proximity. Can the UK compete with Central Eastern European countries on outsourcing services? Yes, it can, but that depends on the line of services and the value delivered from the outsourcing engagement, said Oshri. All the vendors we interviewed have been ramping up operations in the UK and some are looking to add 15% new employees to their UK-based workforce. The new strategy pursued by vendors is also changing the nature of competition from a pure cost-based one to a hybrid mode in which advanced skills coupled by premium price are becoming the winning formula, though this can be compensated by large scale. This is in reaction to customer demands that they have a local presence; pressure from the government to encourage the hiring of UK citizens; and to gain access to more customers. But Oshri warned that conclusions of the study do not guarantee that the UK will continue to attract investments from the service industry. Current and future governments need to pay attention to threats such as for the lack of talent mobility in rural areas and the development of centres of excellence in Europe , such as Germanys emergence as a shared service centres hub, he said.
The UK is an attractive location for IT service providers
Thames Water, which provides services to 14 million households in London and the surrounding area, said in August it wanted to increase prices to cover the cost of bad debts, which had risen in the economic downturn, and higher costs than it had forecast. Water companies need the permission of Ofwat to raise prices beyond limits set by the regulator for five-year periods. Thames Water, owned by a consortium led by Australian investment bank Macquarie, was permitted to raise prices by 1.4 percent above inflation for 2014/15, Ofwat said. However in August the unlisted utility said it wanted to add a further 8 percent, the equivalent of an extra 29 pounds ($46)on an average bill, which currently stands at 354 pounds a year. “We said we would challenge Thames Water’s request,” said Ofwat’s chief regulation officer, Sonia Brown. “We have looked at the details and do not believe the current evidence justifies an increase in bills.” Ofwat said it would take a final decision on the increase next month after a short period of technical consultation, which allows for the submission of new evidence. A Thames Water spokesman said it would review Ofwat’s preliminary decision and submit its response in due course. Higher water charges would be a new blow to British consumers. Energy prices in Britain have risen 24 percent over the last four years, according to energy regulator Ofgem, ramping up the pressure on household finances at a time of wage stagnation. Ed Miliband, leader of the opposition Labour Party, put increasing energy bills at the heart of his campaign for 2015 election when he said he would freeze prices for 20 months if his party wins power. SSE, one of the “big six” energy suppliers said it would raise energy prices by 8.2 percent earlier this month. ($1 = 0.6262 British pounds)