Los Angeles (1224)

When property owners start new construction or a building addition, they should insure against certain risks, such as fire, theft, vandalism, earthquake or flood.

“Most commercial property policies exclude property under construction. That is why it is important to obtain a builder’s risk policy,” says Carla Cave, assistant vice president at Momentous Insurance Brokerage, Inc. “This coverage should be put into place before the project starts and before any material is in transit to the site.”

Smart Business spoke with Cave about what you need to know about builder’s risk policies.

How does insurance coverage during construction work?

Builder’s risk is coverage for property under construction, which can include building materials, supplies, foundations, site preparation, temporary structures (e.g. scaffolding) and soft costs. Soft costs are general contractor’s administrative costs, permit fees, insurance, state taxes and fees, loan interest, etc.

If adding to an existing building, make sure the existing structure is included in the total insured costs on the policy.

You can occasionally add a course of construction endorsement to your homeowner’s policy if the cost is nominal — approximately 10 percent of the dwelling value. It also depends on the kind of construction.  

If your company is leasing a location and intends to do improvements and betterments, a builder’s risk policy would be needed. The building owner will ask for proof of coverage if the tenant is contractually responsible for such improvements.

What if you don’t have coverage when construction starts?

Then it’s much harder to get the policy — and sometimes a little more expensive. The carrier might inspect the site to see how far you are, and may put on exclusions.

Who buys the coverage? What does it cost?

It depends. The general contractor, property owner or custom builder could buy the coverage. If the general contractor puts the policy into place, coverage should include the property owner as an additional named insured. However, the owner has no control over the policy, even though the contractor will pass along the cost to the owner.

Insurance carriers underwrite the general contractor, typically asking for three years of claims history. If you don’t have a general contractor or have one that poses an issue, carriers might surcharge the policy.

The cost depends on the scope of work or budget. For example, a $1.3 million home had $2.2 million of renovations, totaling $3.5 million insured value, generating a premium of $12,500.  Premiums can increase during the policy if changes are made to the original plans, the renovation uncovers problems or if the project is delayed.

What are some important items to check on your builder’s risk policy?

If increasing the square footage of an original structure, add the existing structure to the policy. Make sure the structure is valued at replacement cost value, not actual cash value. An actual cash value policy factors in depreciation, which could be detrimental if a loss occurs.

Check that your soft cost limit is sufficient, and padded enough to account for problems. If something happens to delay or set back the project, all the project fees will increase.

The transit limit on the policy needs to be adequate, especially if it’s a large project. For example, a high-end office building in Beverly Hills may have granite, copper and high-end fixtures, which all must be transported. You don’t want a $200,000 limit when $500,000 worth of materials are on the road.

Permits will be required to build or renovate per city/county requirements. This is why ordinance or law coverage needs to be included. If a one-year project is vandalized or burns down after six months of construction, the ordinance and laws may have changed.

Off-premises coverage is needed for building materials that may be stored at a warehouse or staging area. Review this limit to make sure it is adequate.

Earthquake and flood can occasionally be included in the builder’s risk policy. If not, it’s recommended that you purchase a separate policy.

Carla Cave is an assistant vice president at Momentous Insurance Brokerage, Inc. Reach her at (818) 574-0989 or ccave@mmibi.com.

Insights Business Insurance is brought to you by Momentous Insurance Brokerage, Inc.

While California has adopted the Uniform Trade Secrets Act, there is no state or federal registration process for trade secrets like there is for safeguarding other intellectual property.  However, companies can and should protect themselves by identifying, valuing and guarding their trade secrets. This allows them to seek remedies under the act if a closely held secret is misappropriated.

Smart Business spoke with Tom Speiss, shareholder and intellectual property attorney at Stradling Yocca Carlson & Rauth, about establishing a trade secret team and conducting an intellectual property audit to determine and protect valuable proprietary information.

What protection does the act offer?

Trade secrets garner special protection based on that state’s adaptation of the Uniform Trade Secrets Act. In California, to qualify as a trade secret, a secret has to derive independent economic value, whether actual or potential; must not be generally known to the public or to other persons who can obtain economic value from its disclosure or use; and must be the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

Companies should not file patent or copyright applications for subject matter it considers to be secret because, for patents, the subject matter of the patent application is made public 18 months after filing and, for copyrights, the subject matter is immediately made public. The law offers remedies if subject matter that qualifies as a trade secret is misappropriated.

Who is responsible if a trade secret is misappropriated?

The individual and, potentially, his or her new employer are both potentially liable for trade secret misappropriation. A company has a responsibility to ensure it’s not using another entity’s trade secrets, and can be liable for doing so whether it actually knows it has taken a trade secret or not — because the standard is lower: it is ‘reasonably should have known’ rather than ‘actually knew.’ Companies should conduct entrance interviews to determine the nature of the person they’re hiring. For instance, if the new hire brings with him or her a recipe or construction blueprints from a prior employer, it’s up to the hiring company to ask if that’s a trade secret.

Similarly, an exit interview can protect a company when an employee leaves. An exiting employee can be asked to sign an affidavit saying he or she is not taking anything. That puts the former employee on the hook whether they sign or refuse to sign, because they have either attested to their honesty, or, by refusing to sign, appear dishonest, raising suspicion.

In a recent case, an individual took a cookie recipe that was subject to reasonable efforts of protection to a rival company, which replicated it. In another instance, a group took construction blueprints it developed while working for a former employer. In both instances, suits were filed against the individuals as well as against the companies that were the recipients of the trade secrets.

Who should be part of a company’s trade secret team and what should they do?

While implementation varies by company and circumstance, the team should comprise a key person from each department within the company. That team member should pull together things they consider important to that department. Trade secrets aren’t always obvious, so you need to mine for them. The key questions in the search are:  Why are we successful? What information, if in the hands of a competitor, would harm the business?

Next, determine the economic value of each item identified and rank them. The higher the value the more important it is.

Then develop a protection scheme for each level of value. For those items that have the highest economic value, set up protections adequate for their importance.

Lastly, once the list is created, review and update it on a regular basis.

How can a company know whether its trade secrets are trade secrets within its industry?

If you think your company has developed something unique, research your industry. You’ll have a good sense of what could be a trade secret based on your knowledge of your industry, and your evaluation of what makes your company a market leader.

Then, seek to protect your ‘special sauce’ — that is, your trade secrets.

Tom Speiss is a shareholder at Stradling Yocca Carlson & Rauth. Reach him at (424) 214-7042 or tspeiss@sycr.com.

Insights Legal Affairs is brought to you by Stradling Yocca Carlson & Rauth

Business succession is the one thing many companies fail to address for fear of relinquishing control, a lack of time, the feeling that successors aren’t ready or other reasons. But, it’s never too early to start succession planning. 

“Statistically, roughly only 30 percent of family-owned businesses are effectively transferred to the second generation and just 10 percent make it to the third generation,” says Julianne Cruz, managing director of Advisory Services at CB&T Wealth Management. “There are myriad reasons for this, but one recurring issue is a lack of effective succession planning.”

Smart Business spoke with Cruz about how to effectively position your chosen successors for success.

How should business owners get started?

You need to consider the three ‘T’s of successful transition:

  • Transferring management.
  • Transferring ownership.
  • Tax consequences.

In all cases, having a plan that is strategic and well executed is key, but that takes time. The most successful transition plans take place over a number of years, as successors develop the skill sets required to run the business.

How is management transferred? 

It’s important to select an independent adviser who is highly experienced with planning issues to arrive at the best plan for you and the next generation. 

Some areas to consider are: If more than one child is involved in the business, how will contentious decisions be made once you exit the business? If you want certain key, loyal employees to be cared for, as they are likely necessary for a smooth transition, what assurances do you have this will happen? What happens if unexpected health issues force the transition early? A well-developed plan ensures the business will thrive without interruptions, helps the next generation grow into their role at a reasonable pace and promotes future harmony among family members. 

A short-term plan ensures there’s enough liquidity and insurance to hire necessary experts and avoid a fire sale. A mid-term plan must prepare developing successors or key employees to be in decision-making roles initially. It also would have a timeline for family members to step into their new roles with certain targets. The long-term plan is ultimately what you want to happen — the best of all circumstances.

After discussing your plan with advisers and successors, involve your key employees, who may be more satisfied knowing the company’s future.

What are some factors to consider with transferring ownership?

Once the management transition plan is established, plans for transferring ownership can occur. Usually this begins with your retirement plans. How much income will be needed and what’s the timeline? If you need cash from the business, are you willing to bear the ‘investment risk’ of the business as a source of income once you’re not involved? 

Then, consider estate-planning issues. Are all your children involved in the business? If not, do you desire to ensure each child will ultimately receive an equal estate share?

How do tax consequences factor in?

Taxes are the tertiary consideration once decisions have been made regarding the general retirement and estate plans. As is the case with investment portfolios, taxes should never drive the decision-making process. Tax-reduction strategies should only be considered after other issues are decided.

Business owners in general, and particularly family-business owners, should begin now and get an experienced, independent adviser to guide them through the process. The earlier you plan, the better the results. Sound, experienced advice will make the process that much easier, and maybe even bring family members closer. λ

Julianne Cruz is managing director of Advisory Services at CB&T Wealth Management. Reach her at (310) 258-9301 or julianne.cruz@contangoadvisors.com.

Insights Banking & Finance is brought to you by California Bank & Trust

Wealth management services are offered through Contango Capital Advisors, Inc. (Contango), which operates as CB&T Wealth Management in California. Contango is a registered investment adviser, a nonbank affiliate of California Bank & Trust and a nonbank subsidiary of Zions Bancorporation. Some representatives of CB&T Wealth Management are also registered representatives of Zions Direct, which is a member of FINRA/SIPC and a nonbank subsidiary of Zions Bank. Employees of Contango are shared employees of Western National Trust Company (WNTC), a subsidiary of Zions Bank and an affiliate of Contango. #CCA0813-0090


No one likes to be involved in a lawsuit — especially since they can be so expensive. However, if it should happen to your business, it’s important to not only hire the right lawyer but also to make sure you’re getting your money’s worth from that lawyer.

You need to be aware of how much the litigation will end up costing you in order to make an informed decision about whether to go through with it, or to settle.

“You might want a very long, involved budget that says how much it’s going to be for certain things. Try to get that in writing,” says Gerald Knapton, a partner at Ropers Majeski Kohn & Bentley PC.

“When the bills come in, your accounts payable staff should follow up and make sure that it seems to be staying within the budget. If the actual invoices exceed the budget by more than 10 percent, have a discussion with the lawyer to find out what’s going on.”

Smart Business spoke with Knapton about what to look for when hiring a lawyer — questions you should ask and how to make sure your dollars are being used properly.

What’s the first question a business owner should consider when looking for a lawyer?

‘How much is this going to cost me?’ Employers need to have that clearly in mind, but it’s hard to tell sometimes. It’s important to understand the costs on the average case.

The best way to do that is ask your lawyer if they have data. Lawyers are resistant to answering how much a case will cost, but push them. Write down the estimate and confirm it in an email, and don’t stop there. Once you’re 60 to 90 days into the case, come back and ask for a revised estimate.

What price points should you negotiate?

You should negotiate the hourly rate, costs and what’s going to be included in the costs at the beginning. You also should spell out in your retainer agreement the form of the bills. Otherwise, some law firms won’t bill in tenths of an hour, which is the standard.

Make sure the firm does not block bill — that is, if there’s a day when they worked 10 hours on nine different matters, have them break it down and explain how much time was spent on each of those discrete items; they’re kept honest by having to put down actual time for actual work done.

What do you do in the case of a fee dispute?

As soon as the bills appear to be exceeding either what you’ve paid in the past or what your budget said it was going to cost, you complain. Work your way up the chain talking to the relationship partner at the firm, then the managing partner of the office, and if necessary, you go up to the firm’s managing partner. Usually, if you’re not asking for free services, that works well and you wind up getting a good hearing.

You can always complain to the L.A. County Bar Association; they have a wonderful program — the Mandatory Fee Arbitration Program — where a client can ask professionals to look at their bills.

The L.A. County Bar Association Dispute Resolution Services allows you to do both mediation and arbitration. If it comes to the point where you and your firm can’t agree, you might mention the idea of Mandatory Fee Arbitration. The lawyers will treat you differently because they don’t want to go through this program. If a client requests it, a lawyer has to go along with it.

What are some other cost-saving tips?

If you can shift away from an hourly rate and go to a flat fee, or a monthly cap, that can save you approximately 5 to 10 percent. Remember that 97 percent of cases are settled. You always want a provision in your agreement that says if the case is settled, the fee will be adjusted.

It’s also worthwhile to look at the amount of documents that are going to be at issue, which is the biggest single factor driving cost in today’s litigation. Electronic programs are now being used to sort documents, and that’s been developed to enable you to perform predictive coding. You can run some samples and find out with 99.9 percent probability all of the documents that might be implicated by your request, especially with the in-house help of a sophisticated IT department. This will cut your costs down dramatically.

In addition, there should be continued discussion about how the documents will be handled. Who’s going to do it? How can we do it more cheaply? Can we do predictive coding? Can we do it some way that will reduce the cost of that?

Gerald Knapton is a partner at Ropers Majeski Kohn & Bentley PC. Reach him at (213) 312-2016 or gknapton@rmkb.com. Learn more about Gerald Knapton.

Insights Legal Affairs is brought to you by Ropers Majeski Kohn & Bentley PC

When your company sells a luxury product or service, it changes how you should approach the sale. Selling these items is less about price and more about the experience surrounding a luxury purchase. 

“Customers at the highest luxury levels are more interested in having fun and enjoying spending their money while acquiring something they want, something that serves their own passion,” says Llewyn Jobe, Sales Manager at Bentley Beverly Hills. “We don’t sell anything anyone needs — basic transportation can be purchased anywhere. It’s about an experience.”

Smart Business spoke with Jobe about lessons he’s learned selling Bentley motor cars that apply to other luxury products and brands.

What are some challenges that come with selling luxury items?

It’s a challenge to make everything an indulgent, luxurious experience. Customers want to connect and feel at ease when they come in to spend a substantial amount of money, so the transaction needs to go seamlessly without too much anxiety over pricing and negotiating. 

How can you produce good customer service, which is so central to success?

Without good customer service, there are no referrals or repeat business. The people selling the product drive the customer service experience. The sales staff needs to show passion and be informative when selling to clients; it should be fun and exciting for everyone involved. Stay in touch with your customers, or potential customers, and build a relationship by following up and staying current. Maintaining good customer follow-up comes from the productive use of a customer management database. Work through your database and keep clients and prospective clients up-to-date about upcoming model premieres or special leasing promotions. That’s the best way to stay in touch — you’re not bothering people but informing them about something they’ve already expressed interest in. Additionally, giving appropriately branded gifts is a good marketing tactic and shows appreciation to the people spending their time with you, whether they buy or not.

What are some best practices?

Use marketing that’s clever and tasteful to both new and existing customers. It’s easy to reach out to previous customers, but how do you expand beyond your existing client base? The initial customer contact, whether through marketing or customer service, is critical. For us, part of our success derives from our location in Beverly Hills, where luxury is part of the community. However, you cannot take success for granted; you have to ask yourself, ‘How can we become better to surpass our own performance?’

Customers want to feel welcome in a comfortable setting. It’s an art to take people through the numbers of any particular transaction and get them to understand, without being too pushy. Then, it becomes more about sharing the experience and building the relationship.

If a customer asks, ‘Why should I pay so much money for X?’ What do you say?

Customers will say, ‘I can get this same car with similar miles for less.’ Well, yes, that’s commerce. But, here you get a relationship with your purchase that enhances your ownership experience. You may be able to buy this product for less somewhere else, but you’re not getting us with it.

And, that’s only comparing apples to apples. If you’re trying to bring in a new client from a lesser luxury brand, you can tell them, ‘You’re spending this kind of money because you want to be distinguished; you’re looking for an experience that’s above all experiences you’ve ever had.’

The relationship becomes more important the higher a luxury item is priced. People expect it. 

How can businesses overcome post-recession hesitancy to spend money?

In 2009 and 2010, people were worried what others thought. There was caution about spending money and about what that stood for while so many had been hit by the recession. However, we’re pushing past that.

When it does come up, it’s important to let the customer know that it’s OK to spend the money, take action and enjoy their life. There’s nothing bad about it — that’s what luxury is all about.

Llewyn Jobe is sales manager at Bentley Beverly Hills, O’Gara Coach Company. Reach him at (310) 967-7124 or ljobe@ogaracoach.com.

Insights Luxury Autos is brought to you by O’Gara Coach Company






Open enrollment is when employees review their current benefit elections and compare them to all the options offered by their employer. It can include medical, dental, vision, and ancillary products like supplemental life, long-term care and disability.

“Some employers are unenthusiastic about open enrollment since employees are pulled out for mandatory meetings, but it alleviates a lot of issues during the year for HR,” says Marifel Divinsky, an account executive in the Employee Benefits department at Momentous Insurance Brokerage, Inc. “It’s a time for both the employer and employee to work together.”

Smart Business spoke with Divinsky about best practices for open enrollment that will minimize administration headaches.

Is it helpful to have open enrollment early?

Yes. This strategy usually begins with reviewing the entire benefits plan design and premiums 90 to 120 days prior to the renewal date. The employer works with its broker to review current data from its incumbent carrier and competitive quotes from additional carriers. Carriers are trying to get renewal notices out earlier because the Affordable Care Act requires employers to give notice with a Summary of Benefits Coverage at least 60 days in advance of changes.

The employer should have open enrollment during the month prior to the renewal date. Although not mandatory, open enrollment re-educates employees about benefits and any rate changes, even if the plan structure stays the same. Also, employers need time to prepare communication pieces to notify their active eligible employees, employees who are on leave and COBRA/Cal COBRA participants about upcoming changes. Once open enrollment is complete, employee changes are communicated to the carriers, and fresh ID cards can be generated as needed.

What can employees change during open enrollment?

Employees can make changes to their current benefits elections — add or remove eligible dependents and change plans, from HMO to PPO, or vice versa. They aren’t allowed to make any changes during the policy year, unless they experience one of the following qualifying events:

  • A change in legal marital status, including marriage, death of a spouse, divorce, legal separation and annulment.
  • A change in the number of dependents, including birth, adoption, death and placement for adoption.
  • A change in employment status of the employee, or the employee’s or retiree’s spouse or dependent, including termination or commencement of employment.
  • A dependent ceasing to satisfy eligibility requirements for coverage due to attainment of age, student status or marital status.

Employees are responsible to notify employers of a qualifying event within 30 days of the event. Otherwise, they might need to wait until the next open enrollment period.

If employees understand their benefits, how does that help the company?

When employees understand their benefits, they make good decisions. This helps prevent administrative problems and manage how employees access benefits and deal with billing issues. Employee satisfaction and better use of the plan can improve productivity in the workforce. In addition, benefits education lends itself to an appreciation of the benefits offered by the employer as part of the overall compensation. Ultimately, good benefits help employers retain and attract talent.

How can employers encourage employees to participate in open enrollment? 

Use education and communication, such as posters, weekly emails, or online tools and resources from the carrier. They also can work with their insurance carriers and broker to schedule a mandatory enrollment meeting to help employees understand what benefits are offered and how they work.

However, some employees don’t like discussing their benefits in a group. They need to meet with the broker one-on-one or call directly. Sometimes brokers host quarterly question-and-answer sessions, which may alleviate claim issues and save time. Brokers have great relationships with carriers and can help expedite solutions.

Marifel Divinsky is an account Executive in Employee Benefits at Momentous Insurance Brokerage, Inc. Reach her at (818) 933-2738 or mdivinsky@mmibi.com.

Insights Business Insurance is brought to you by Momentous Insurance Brokerage, Inc.




Wednesday, 28 August 2013 05:41

Move beyond “shiny and new”

Written by

Say the word “innovation,” and immediately you think about business legends like Steve Jobs and Jeff Bezos, as well as the companies they created – Apple and Amazon. Too often, however, we focus on the people who have been tabbed as innovators and the companies that develop those breakthrough products, services and solutions, such as Apple’s iPod and iTunes, or Amazon’s marketplace and unique ecosystem.

True innovation goes much deeper than a single leader’s vision. It is an all-encompassing philosophy that permeates an organization and defines its purpose for being. For me, at least, I prefer to think about innovation in its broadest terms, extending its definition to include corporate cultures and innovative management styles. Think about how Facebook and Microsoft are run, and how at both organizations employees are a key factor in the idea creation, or ideation, process.

Now, think about the breakthrough products that eventually went bust. Hopefully, you don’t have a basement full of Beanie Babies, boxes of Silly Bandz, or a home library filled with laser discs. It is more common to land on a singular breakthrough product that temporarily revolutionizes your industry rather than develop a product through a process that’s repeatable or scalable. And, just as true, no matter how innovative and creative your management team’s style may be, without the proper processes in place to push ideas through a system that takes them from mind to market, you’ll eventually have trouble keeping the lights on.

It all comes down to developing a culture imbued with innovation at its core. But this also requires having a servant culture in place where every person who works for the organization thinks about the customer first.

Consider San Francisco-based Kimpton Hotels, where employees strive to create “Kimpton Moments” by going above and beyond with guests and delivering memorable experiences.

Kimpton overcomes the inherent limitations for creating new innovative products that being a boutique hotel chain includes by approaching innovation through its employee interaction – and then rewarding employees for their creativity. For example, when team members put in the extra hours to ensure world-class service delivery, the hotel chain has sent flowers and gift baskets to their loved ones. And when they create an innovative service experience, the company rewards staff members with such things as spa days, extra paid time off and other goodies.

And then there’s the Boston Consulting Group, a management consulting firm that’s known for developing innovative business processes and systems for its high-end clientele. Part of BCG’s internal process is a focus on team members maintaining a healthy work-life balance. When individuals are caught working too many long weeks, the company’s management team issues a “red zone report” to flag the overwork.

Talk about innovation! And no product, service or solution was developed, marketed or sold.

And finally, few organizations are more innovative than DreamWorks Animation. But beyond plugging out groundbreaking animated movies, the studio’s culture embraces empowerment and innovation. Employees are given stipends to personalize their workstations so that they create whatever inspirational atmosphere they need to succeed. And, as the story goes, after completing Madagascar 3, the crew presented a Banana Splats party, where artists showed the outtakes.

Not only are these three companies known for being innovative in their respective industry spaces, they also share the honor of being members of Fortune’s 2013 “Great Places to Work” list.

So how do you take the first steps toward transformation or put those initial building blocks in place to begin the journey? There’s no magic formula, but there are some common traits – and they revolve around empowerment and establishing a culture that cares. 

Innovation organizations

  • Are open-minded and ask “What if?”
  • Teach team members how to see what is not there and identify opportunities in the marketplace to take advantage of those gaps.
  • Develop cultures where innovation thrives through open and honest communication.
  • Flatten the organizational structure and recognize that innovation can come from anyone and anywhere.
  • Make innovation, itself, a cyclical and continuous process.

Stop and take an internal assessment of your organization, your team and of yourself. If you can’t check a box next to each of these five traits, stop and ask yourself why. Then begin your own journey to greatness.

Sir Tim Berners-Lee recalls a time when computer users around the world were quite nervous about the power of Netscape.

“A lot of people thought, ‘Oh, wow, a clingy and controlling Web company. What do we do about it?’” says Berners-Lee, director of the World Wide Web Consortium (W3C) and inventor of the World Wide Web. “Then they weren’t worried about Netscape anymore. They were worried about Microsoft, and they worried about Microsoft for a long time. Then they woke up one day and said, ‘Wait, the browser is not the issue. It’s the search engines.’”

Today, it’s the social network that has people worried, says Berners-Lee. But whichever medium is in society’s crosshairs, he says the fear is very similar in each case.

“When you have a monopoly, it slows innovation,” Berners-Lee says. “It reduces competition, and it’s generally not good for the market. One of the most important things about the Web is it being an open platform. The ’Net is a neutral medium. I can connect and you can connect, and we can talk. That is really important to an open market and democracy.”

One of Berners-Lee’s primary missions with the W3C is to ensure the Web is being used to its full potential. But it is also to make sure it remains an independent entity so that everyone who wants to has the opportunity to tap into that potential.

“If you can start tweaking what people say or you can start intercepting their communications, it’s very powerful,” Berners-Lee says. “It’s the sort of power that if you give it to a corrupt government, you can give them the ability to stay in power forever. It’s healthy for us to not put the Internet directly under the control of the government, but to have a set of multi-secular organizations at arm’s length from government acting responsibly and taking many views.”

Still plenty of room to grow

Berners-Lee helped launch the World Wide Web Foundation in 2009 to bring the power of the Web to more people.

“Maybe now 25 or 30 percent of the world uses the Web,” Berners-Lee says. “That’s still a massive gap and a massive number of languages where there still isn’t a lot on the Web. There’s a lot of culture that isn’t represented and a lot of countries where they haven’t the backbone for a good Internet base.”

The foundation has designed and produced the Web Index, the world’s first multi-dimensional measure of the world’s growth, utility and impact on people and nations. It covers 61 developed and developing countries, incorporating indicators that assess the political, economic and social impact of the Web in that country.

“The higher level of the Web Index is looking at impact,” Berners-Lee says. “Is it really affecting the way people do politics? Is it really affecting the way you do education? Is it affecting health?”

The recent turmoil in Egypt was a wake-up call to many who are connected to the Internet, but have started to take its power for granted.

“They thought the Internet was like the air, that it would always be there,” Berners-Lee says. “And people started asking the question, ‘Who could turn off my Internet?’”

Fortunately, there are countless efforts underway from those in the technology industry not to restrict access, but to take the Web to even greater heights.

“The art is designing it to work with all kinds of devices because different customer segments are going to use different devices in different countries,” Berners-Lee says. “If you’re designing something new on the Web, you need to make sure it works on all devices.”


How to reach: World Wide Web Consortium, www.w3.org

The greatest challenge of opportunity is said to be the ability to take the next step and understand what it will take to maximize that opportunity and achieve growth. Amy Rosen knows the importance of that comprehension.

“The skill set of an entrepreneur involves understanding how to create a business,” says Rosen, president and CEO for the Network for Teaching Entrepreneurship (NFTE).

Andres Cardona, who grew up in a rough neighborhood in Miami, is one of the best examples of this entrepreneurial spirit.

“He was on the verge of dropping out of school because his mom had lost her job, and he had to help contribute to the household,” Rosen says.

Fortunately, Cardona had become involved with NFTE. His natural leadership skills, along with the knowledge he was gaining from NFTE, empowered him to do something that would not only help his family, but also other youngsters in Miami.

Cardona founded the Elite Basketball Academy, an organization that would help kids hone both their basketball and leadership skills. He began with one kid and was making 70 cents an hour. Now, he’s a CEO with more than 150 kids, a staff of employees and he’s making money. He’s enrolled at Florida International University studying finance while he runs his business and supports his mom.

“I’m sure it will be the first of many businesses he runs,” Rosen says. “This is just a kid who needed to have his eyes opened to opportunity and learn some basics about business.”

A great place to start

The mission of NFTE is to work with young people from low-income communities, such as Cardona, and engage them in a different vision of opportunity and success.

“It’s basically an entrepreneurship class where they actually go through the whole business-creation process,” Rosen says. “At the end, which really gets to our mission, we want kids to actually connect school with opportunity so they stay in school. Kids start learning how to multiply fractions because they are figuring out their personal return on investments in their new company. We want them to start much earlier thinking about their future.”

Rosen points to Cardona as an example of a youngster with a great gift. But in too many cases, with too many young people, those gifts go unrealized and the child becomes an adult with nowhere to go.

“We want them to have a vision of success and whether they become entrepreneurs and create their own businesses or bring to their jobs and their employers an entrepreneurial mindset. That’s going to give them a much better chance at success,” Rosen says.

The work being done by NFTE fits like a glove with EY’s mission to drive entrepreneurialism in the business sector.

“Our cultures are so aligned around entrepreneurialism in general and we are all running competitions and promoting the notion that we need more entrepreneurs to solve problems,” Rosen says. “Now we have partners on every single one of our boards worldwide. They don’t have to be asked to do it. They really like doing it.”

Cardona was featured at the recent EY World Entrepreneur of the Year Award program in Monte Carlo. Other budding young leaders who have risen through NFTE also have been honored by EY.

“In every city where we have an operation, they feature our winning entrepreneurs,” Rosen says. “So the kids get an opportunity to network and see what success looks like and to go to the kinds of places they’ve never been and participate that way. And they get a sense of recognition for their work.”

Rosen says there’s nothing better than working with young people to prepare them for what lies ahead.

“If you’re going to give back, why not work with kids who need it the most and actually teach them and help them to be entrepreneurs,” Rosen says. “That’s what is going to grow our economy and create stability.”


How to reach: Network for Teaching Entrepreneurship, (212) 232-3333 or www.nfte.com

Although manufacturers can expect modest 2 percent growth through the remainder of 2013, the brief lull gives opportunistic executives a chance to prepare for an uptick in business next year.

Gus Faucher, senior economist for The PNC Financial Services Group, attributes his optimistic forecast to a rise in business investments, fueled by the resolution of murky tax and sequestration issues, and the continuation of record-low interest rates.

“I think the U.S. will maintain an edge in high value-add manufacturing because we have highly skilled, productive labor,” Faucher says. “Maintaining our competitive advantage requires ongoing development of our manufacturing workforce.”

As the economic recovery proceeds, in what areas will spending accelerate most? Manufacturers of home building products and materials, furnishings, appliances and so forth should have a strong 2014, thanks to the rebound in the residential real estate market. In turn, those manufacturers will purchase more production equipment, raw materials, parts and other items. The wealth effect in real estate will stimulate growth throughout the supply chain.

Will rising global demand for U.S. made products including semiconductors, medical devices and specialized materials manufacturing propel employment gains over the next few years? Post-recession hiring will wane next year as manufacturers look for productivity gains from workers added since employment levels bottomed out in early 2010. Although manufacturing is back up to 12 million workers, that’s still well below the 2006 peak of 14.2 million. The mantra continues to be: Do more with less.

How could the expansion of the shale oil industry affect manufacturing? Shale oil exploration and extraction will be a boon to ancillary industries and all U.S. manufacturers that rely on natural gas for production, since it will lower energy costs over the long-term. Moreover, it will give America a much-needed competitive advantage in today’s spirited global marketplace.


Augustine (Gus) Faucher is a senior economist for The PNC Financial Services Group. He is responsible for contributing to the preparation of PNC’s U.S. economic forecast and alternative economic scenarios.