Disruptively building a better business within the Networked Society; concrete cases

Economists, Strategists, Visionaries are calling for redefining the 21^st century capitalism; capitalism that reinvents societal ties; capitalism that no longer divides, exploits and sheds societal disasters wherever it surges. The open-ended consumption model we have today is no longer sustainable. Fortunately the change has already started; let me introduce you cases from this new-disruptive-better-business-era.

Case 1:
India is the second largest country in the world in terms of population. India has also a large number of villages; more than 600.000 villages with poor transport infrastructure making movement of goods and people extremely difficult.

Retinopathy of Prematurity (ROP) is the leading cause of preventable infant blindness worldwide. India has the largest concentration of blind people in the world, 1 out of 3. Over 8% of 27 million births each year are at risk of this potentially blinding condition. The ratio of inhabitants to ophthalmologist is around 100,000:1. There's no way the number of qualified physicians will grow to match the need anytime soon. The challenge is to screen 250.000 infants a day. This problem requires a fast and efficient solution for screening infants especially in the rural areas where expertise is lacking.

The widespread availability of mobile networks and the steady growth of Mobile broadband are opening unexpected doors for fast, efficient and societal innovations. Mobile broadband technology provides the possibility to transport data securely, conveniently, faster and while traveling.

i2itelesolutions pics

A potential solution has been tested. The Postgraduate Institute of Ophthalmology has partnered with a software company i2i TeleSolutions in Bangalore, and developed the solution. The solution consists of the availability of a portable retinal camera with an image capture design suited for newborns. This camera allows technicians to capture images and upload them via a Mobile broadband dongle data card. The images and data are uploaded to a remote server. Once uploaded the images can be accessed and viewed by an ophthalmologist - who could be thousands miles away - using an Iphone, an Ipad or any other PC.
Feedback and corrective measures can then be provided back to the technician via the secure server.This scale of screening in such large numbers can only be possible using Mobile Broadband networks.

Case 2:

In France since July 1, it is mandatory to have a breathalyzer (Alcohol tester) in his car. Car drivers have the choice between two alternatives: the disposable one of 2 euros or an electronic device priced more than 100 euros now. It will be much cheaper with larger sales volumes.

AndroMC Systems has worked on a solution associated with a smartphone, which is widely used in France. This company has developed a breathalyzer that plugs into a smartphone, and is associated with an application.

The principle is simple: you plug the reusable housing on the charging port and blow in it and the app indicates whether you are fit to drive. If not, the app may even find another means of transportation in the neighborhood, or call a cab for you. When possible the app can even block the car starter!

The combination of smartphone and Mobile broadband connectivity is becoming a driver of new business innovations, that will lead to economic growth, social empowerment and without any doubt to many surprising disruptions.

Do you imagine the social value of these services? Their business case is sustainable and more than positive.

Apple, Facebook, Google common love: the "double Irish with Dutch sandwich"

Do you know what is "double Irish with Dutch sandwich"? No, it's not a special cheeseburger.
Many people don't know what it is. Well. The ones with no accounting & financial knowledge...

It's an accounting technique known as the “double Irish with a Dutch sandwich” which reduces taxes by routing profits through Irish subsidiaries, the Netherlands and to the Caribbean. Today, it is used by hundreds of other corporations. Apple was pioneering in developing this tactic in order to avoid paying tax in high tax rate countries. What do Apple , Amazon , Facebook and Google have in common? The love of the "double Irish sandwich Dutch." Technology giants hide tax using these sophisticated systems, while brewing billions of euros of turnover in these countries.

Corporations that implement this tactic have one thing in mind: maximize profits where taxation is low and have a very low turnover where the tax rate is higher! Check this one, many of these corporations have subsidiaries registered in the Netherlands where the tax rate is 5%, subsidiaries in Ireland where the tax rate is 12.5% and subsidiaries in Bermuda where tax rate is about 5%; compared to the UK tax rate of 24% or France 33%.
These technology giants use the transfer pricing method. This method allows corporations to move sales between subsidiaries. From subsidiaries to parent company that is based in a tax heaven!! Got it?!
As an example, Amazon who is headquartered in Luxembourg, paid in the UK 2.3 million in taxes for a turnover of nearly 260 million euros in 2011. Facebook is accused to have deliberately created a net loss to avoid UK tax. Apple has paid 6.2 million euros in taxes in the UK, only 7.2% of its turnover in the country. Apple paid less than 2% tax on overseas profits last year, just $713 million in overseas corporation tax on profits of $36.87 billion. As a result: the parent company (based in a tax heaven) gets the largest profits while the subsidiary generates virtually nothing. And this is completely legal!
Governments in Europe, particularly in France and the UK where most of the profits are made for these companies, have started investigating and complaining about these practices.

My first question to the Apple, Amazon, facebook & others: Why on earth don't you want to pay tax in the country where you're making the largest profits? I know your answer: It is capitalism. This is business. greedy-sleazy-shabby-cruel business. The simple holy act of profit maximization is the only raison d'etre of these giants.

As I mentioned earlier, this is totally legal, but I put a question mark on whether it is totally ethical as well.
Tax collection is the only revenue source of governments to support healthcare, education, nutrition of their folks. These folks are the ones who are consuming your products, buying your services and making sure that you are generating high profits for your business. Refusing to fairly pay your real tax in Spain, Italy, Greece, France, etc... is a cynical and disgraceful stand, particularly in these uncertain times.

My second question:, remind me: what societal value are these giants really creating? what is their contribution to the society? to healthcare? nutrition? water problems? poverty? oh yes I forgot, Apple is employing Chinese for $2 a day. What a great societal contribution!

I really believe that these business practices must change. Businesses should generate profits for shareholders and must contribute in creating societal value as well. We cannot continue with this open-ended consumption model, where the simple act of profit maximization is good in itself.

The world is changing, and the business practices must change as well!