MARITIME ECONOMICS JARGONReviewer for Final Examination

1. Acid-Test Ratio (or Quick Ratio) A stringent indicator that determines whether a firm has enough short-term assets to cover its immediate liabilities without selling inventory. The acid-test ratio is far more strenuous than the working capital ratio, primarily because the working capital ratio allows for the inclusion of inventory assets.

Calculated by:

Companies with ratios of less than 1 cannot pay their current liabilities and should be looked at with extreme caution. Furthermore, if the acid-test ratio is much lower than the working capital ratio, it means current assets are highly dependent on inventory. Retail stores are examples of this type of business.

The term comes from the way gold miners would test whether their findings were real gold nuggets. Unlike other metals, gold does not corrode in acid; if the nugget didn't dissolve when submerged in acid, it was said to have passed the acid test. If a company's financial statements pass the figurative acid test, this indicates its financial integrity.2. Bassel Convention Chapter V - Basel Convention

The Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal was negotiated under the United Nations Environment Program (UNEP) beginning in 1988. After the twentieth country ratified the Basel Convention on February 5, 1992, the Convention became effective for those twenty countries on May 5, 1992. The Convention's main goal is to protect human health and the environment from hazards posed by transboundary movements of hazardous waste. The negotiators of the Convention wanted to promote environmentally sound management of exported and imported waste, especially in developing countries.

A. Convention Requirements

In addition to its main objectives, the Basel Convention also seeks a reduction in waste generation, a reduction in transboundary waste movements, and a standard set of controls for waste movements that do occur. These controls are similar to EPA's regulatory controls for imports and exports of hazardous waste.

The Convention requires that the exporting country notify the receiving country and any transit countries of the proposed shipment. The waste shipment may occur only after the transit and receiving countries have given consent for the shipment. The Convention requires that a tracking document, or movement document, accompany the waste shipment from its point of origin until its ultimate disposal. In addition, shipments of waste must be packaged, labeled, and transported in accordance with international rules. In the event that an accident occurs during the shipment of the waste, Basel requires that the responsible parties inform the potentially affected countries of the accident. Finally, parties to the Convention must submit an annual report to the Basel Secretariat summarizing the amounts and types of hazardous waste exported and the destination and disposal methods.

Top of PageB. Basel Restrictions

The Basel Convention contains two major restrictions on waste movements. The first restriction requires that exports of waste occur only under the following circumstances:

If the exporting country does not have sufficient disposal capacity

If the exporting country does not have disposal sites that can dispose of the waste in an environmentally sound manner

If the wastes are required as a raw material for recycling or recovery industries in the importing country.

Basel also prohibits movement of waste between parties to the convention and non-parties, except when these movements occur under an equivalent bilateral or multilateral agreement. The bilateral or multilateral agreements must provide an equally sound management structure for transboundary movements of waste.

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C. Implications for US Importers & Exporters

To date, the United States has signed the Basel Convention, but has yet to ratify the Convention. In order for the United States to become a Basel party, it must ratify the Convention and have sufficient authority to implement Basel's terms. For this reason, the United States cannot participate in waste transfers with Basel Parties without a separate and equivalent bilateral or multilateral agreement.

As discussed earlier in this document, the United States has entered into several bilateral agreements and one multilateral agreement. The United States currently maintains a multilateral agreement with the members of the OECD governing transboundary movements of waste for recovery purposes. In addition, the United States has established two bilateral agreements, with Canada and Mexico, for importing and exporting hazardous waste. Finally, Costa Rica, Malaysia and the Philippines have entered into separate agreements with the United States. Under these three agreements, the United States may received waste from Costa Rica, Malaysia, and the Philippines but may not export waste to these countries.

3. Berth Reliability Berth schedule where ships are planned to dock immediately after another for processing. In such a schedule, any delay observed in the voyage of a ship creates a delay in berthing time of that ship and the following ship schedule on the berth.

4. Break Bulk Cargo general cargois a term that covers a great variety of goods that must be loaded individually, and not inintermodal containersnor inbulkas with oil or grain. Ships that carry this sort of cargo are often called general cargo ships. The termbreak bulkderives from the phrasebreaking bulkthe extraction of a portion of thecargoof ashipor the beginning of the unloading process from the ship's holds. These goods may not be inshipping containers. Break bulk cargo is transported in bags,boxes,crates,drums, orbarrels.Unit loadsof items secured to apalletor skid are also use5. Breakeven-Break-even(orbreak even) is the point of balance between makingeithera profit or a loss. The term originates in finance, but the concept has been applied widely since6. Build-Operate-Share-Transfer (BOST) 7. Build-Operate-Transfer (BOT) s a form of project financing, wherein a private entity receives aconcessionfrom the private orpublic sectorto finance, design, construct, and operate a facility stated in the concession contract. This enables the project proponent to recover its investment, operating and maintenance expenses in the project.

Due to the long-term nature of the arrangement, the fees are usually raised during the concession period. The rate of increase is often tied to a combination of internal and external variables, allowing the proponent to reach a satisfactoryinternal rate of returnfor its investment.

8. Cabotage is thetransportof goods or passengers between two points in the same country by a vessel or an aircraft registered in another country. Originally ashippingterm, cabotage now also coversaviation,railways, androad transport. Cabotage is "trade or navigation in coastal waters, or, the exclusive right of a country to operate the air traffic within its territory".[1]Cabotage is used in the context of "cabotage rights", the right of a company from one country to trade in another country. In aviation terms, it is the right to operate within the domestic borders of another country. Most countries do not permit aviation cabotage, for reasons of economicprotectionism,national securityorpublic safety. One notable exception is theEuropean Union, whose members all grant cabotage rights to each other.[2]9. Baltic Dry Index (BDI) TheBaltic Dry Index(BDI) is a number issued daily by theLondon-basedBaltic Exchange. Not restricted toBaltic Seacountries, the index provides "an assessment of the price of moving the major raw materials by sea. Taking in 23 shipping routes measured on a timecharter basis, the index coversHandysize,Supramax,Panamax, andCapesizedry bulkcarriers carrying a range of commodities includingcoal,iron oreandgrain.10. Cartel a formal (explicit) "agreement" amongcompetingfirms. It is a formal organization of producers and manufacturers that agree to fix prices, marketing, and production.[1]Cartels usually occur in anoligopolistic industry, where the number of sellers is small (usually because barriers to entry, most notably startup costs, are high) and the products being traded are usuallyhomogeneous. Cartel members may agree on such matters asprice fixing, total industry output,market shares, allocation of customers, allocation of territories,bid rigging, establishment of common sales agencies, and the division of profits or combination of these. The aim of suchcollusion(also called thecartel agreement) is to increase individual members'profitsby reducing competition.11. Cashflow Cash flowis the movement ofmoneyinto or out of a business, project, or financial product. It is usually measured during a specified, limited period of time. Measurement of cash flow can be used for calculating other parameters that give information on a company's value and situation. Cash flow can be used, for example, for calculating parameters: it discloses cash movements over the period.

to determine a project'srate of returnor value. The time of cash flows into and out of projects are used as inputs in financial models such asinternal rate of returnandnet present value.

to determine problems with a business'sliquidity. Being profitable does not necessarily mean being liquid. A company can fail because of a shortage of cash even while profitable.

as an alternative measure of a business's profits when it is believed thataccrual accountingconcepts do not represent economic realities. For instance, a company may be notionally profitable but generating little operational cash (as may be the case for a company that barters its products rather than selling for cash). In such a case, the company may be deriving additional operating cash by issuing shares or raising additional debt finance.

cash flow can be used to evaluate the 'quality' of income generated byaccrual accounting. When net income is composed of large non-cash items it is considered low quality.

to evaluate the risks within a financial product, e.g., matching cash requirements, evaluating default risk, re-investment requirements, etc.

Cash flow notion is based loosely on cash flow statement accounting standards. It's flexible as it can refer to time intervals spanning over past-future. This is enabled by personal apps available today.[1]It can refer to the total of all flows involved or a subset of those flows. Subset terms include net cash flow,operating cash flowandfree cash flow.

12. Chartering is an activity within theshippingindustry. In some cases a charterer may owncargoand employ ashipbrokerto find ashipto deliver thecargofor a certain price, calledfreight rate. Freight rates may be on a per-ton basis over a certain route (e.g. for iron ore between Brazil and China), inWorldscalepoints (in case ofoil tankers) or alternatively may be expressed in terms of a total sum - normally in U.S. dollars - per day for the agreed duration of the charter.

A charterer may also be a party without a cargo who takes a vessel on charter for a specified period from the owner and then trades the ship to carry cargoes at a profit above the hire rate, or even makes a profit in arising marketby re-letting the ship out to other charterers.

Depending on the type of ship and the type of charter, normally a standard contract form called a charter party is used to record the exact rate, duration and terms agreed between the shipowner and the charterer.

Time Charter Equivalentis a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance despite changes in the mix of charter types.

13. Convergence of Technology is the tendency for different technological systems to evolve toward performing similar tasks. Convergence can refer to previously separate technologies such as voice (and telephony features), data (and productivity applications), and video that now share resources and interact with each other synergistically14. Current Ratio is afinancial ratiothat measures whether or not a firm has enough resources to pay its debts over the next 12 months. It compares a firm'scurrent assetsto itscurrent liabilities. It is expressed as follows:

The current ratio is an indication of a firm'smarket liquidityand ability to meet creditor's demands. Acceptable current ratios vary from industry to industry and are generally between 1.5 and 3 for healthy businesses. If a company's current ratio is in this range, then it generally indicates good short-term financial strength. If current liabilities exceed current assets (the current ratio is below 1), then the company may have problems meeting its short-term obligations. If the current ratio is too high, then the company may not be efficiently using its current assets or its short-term financing facilities. This may also indicate problems in working capital management.

Low values for the current or quick ratios (values less than 1) indicate that a firm may have difficulty meeting current obligations. Low values, however, do not indicate a critical problem. If an organization has good long-term prospects, it may be able to borrow against those prospects to meet current obligations. Some types of businesses usually operate with a current ratio less than one. For example, if inventory turns over much more rapidly than the accounts payable become due, then the current ratio will be less than one. This can allow a firm to operate with a low current ratio.

If all other things were equal, a creditor, who is expecting to be paid in the next 12 months, would consider a high current ratio to be better than a low current ratio, because a high current ratio means that the company is more likely to meet its liabilities which fall due in the next 12 months. You should view the relation between the operation cycle period and the current ratio

15. Deadwright tons (DWT) (also known asdeadweightabbreviated toDWT,D.W.T.,d.w.t., ordwt) is a measure of how muchweighta ship is carrying or can safely carry.[1]

HYPERLINK "http://en.wikipedia.org/wiki/Deadweight_tonnage" \l "cite_note-hm-2" [2]

HYPERLINK "http://en.wikipedia.org/wiki/Deadweight_tonnage" \l "cite_note-msd-3" [3]It is the sum of the weights ofcargo, fuel,fresh water,ballast water, provisions, passengers, andcrew.[1]The term is often used to specify a ship's maximum permissible deadweight, the DWT when the ship is fully loaded so that itsPlimsoll lineis at the point of submersion, although it may also denote the actual DWT of a ship not loaded to capacity.

Deadweight tonnage was historically expressed inlong tonsbut is now usually given internationally intonnes.[4]Deadweight tonnage is not a measure of the ship'sdisplacementand should not be confused withgross tonnageornet tonnage(or their more archaic forms gross register tonnage or net register tonnage).

16. Debt-Equity Ratio Thedebt-to-equity ratio (D/E)is afinancial ratioindicating the relative proportion ofshareholders' equityanddebtused to finance a company's assets.[1]Closely related toleveraging, the ratio is also known asRisk,GearingorLeverage. The two components are often taken from the firm'sbalance sheetor statement of financial position (so-calledbook value), but the ratio may also be calculated using market values for both, if the company's debt and equity arepublicly traded, or using a combination of book value for debt and market value for equity financially.17. Demolition Market After a ship's lifespan is exceeded it will be demolished. It's steel and components will be dismantled and sold. Since this work is hard, dangerous and badly paid it is done in the Far East

18. Depreciation efers to two aspects of the same concept:

1. the decrease in value ofassets(fair valuedepreciation), and

2. the allocation of the cost of assets to periods in which the assets are used (depreciation with thematching principle).

The former affects the balance sheet of a business or entity, and the latter affects the net income that they report. Generally the cost is allocated, as depreciationexpense, among the periods in which the asset is expected to be used. This expense is recognized by businesses for financial reporting and tax purposes. Methods of computing depreciation, and the periods over which assets are depreciated, may vary between asset types within the same business and may vary for tax purposes. These may be specified by law or accounting standards, which may vary by country. There are several standard methods of computing depreciation expense, including fixed percentage, straight line, and declining balance methods. Depreciation expense generally begins when the asset is placed in service. For example, a depreciation expense of 100 per year for 5 years may be recognized for an asset costing 500.

19. Dry Bulk Cargo Adry bulk cargo bargeis abargedesigned to carry freight such as coal, finished steel or its ingredients, grain, sand orgravel, or similar materials. Barges are usually constructed of steel. They have an outerhull, an internal void that is fitted with heavystrutsand cross braces orscantlings, and an internal cargo box. The outer hull of a barge can come in one of two configurations. A rake barge has a curved bow to provide less resistance when being pushed and is usually placed at the head of the tow. A box barge is usually placed in the center and rear of the tow and can hold more cargo.20. Economies of Agglomeration is used inurban economicsto describe the benefits that firms obtain when locating near each other ('agglomerating'). This concept relates to the idea ofeconomies of scaleandnetwork effects. Simply put, as more firms in relatedindustries clustertogether, costs of production may decline significantly (firms have competing multiple suppliers, greater specialization anddivision of laborresult). Even when multiple firms in the same sector (competitors) cluster, there may be advantages because that cluster attracts more suppliers and customers than a single firm could alone.Citiesform and grow to exploit economies of agglomeration.21. Economies of Scale The cost advantage that arises with increased output of a product. Economies of scale arise because of the inverse relationship between the quantity produced and per-unit fixed costs; i.e. the greater the quantity of a good produced, the lower the per-unit fixed cost because these costs are shared over a larger number of goods. Economies of scale may also reduce variable costs per unit because of operational efficiencies and synergies. Economies of scale can be classified into two main types:Internal arising from within the company; andExternal arising from extraneous factors such as industry size.22. Equilibrium the condition of a system in which all competing influences are balanced, in a wide variety of contexts23. Flag of Convenience describes the business practice ofregisteringamerchant shipin asovereign statedifferent from that of the ship's owners, and flying that state'scivil ensignon the ship. Ships are registered under flags of convenience to reduce operating costs or avoid the regulations of the owner's country. The closely related termopen registryis used to describe an organization that will register ships owned by foreign entities.

The term "flag of convenience" has been in use since the 1950s, and it refers to the civil ensign a ship flies in order to indicate its country of registration orflag state. A ship operates under the laws of its flag state, and these laws are used if the ship is involved in anadmiralty case.

24. Foreign Exchange Foreign exchangemay refer to:

Finance[edit source|editbeta]

Foreign exchange markets, where money in one currency is exchanged for another

Exchange rate, the price for which one currency is exchanged for another

Foreign exchange reserves, holdings of other countries' currencies

Foreign exchange controls, controls imposed by a government on the purchase/sale of foreign currencies

Retail foreign exchange platform, speculative trading of foreign exchange by individuals using electronic trading platforms

Foreign exchange risk, arises from the change in price of one currency against another

International trade, the exchange of goods and services across national boundaries

Foreign exchange company, a broker that offers currency exchange and international payments

Bureau de change, a business whose customers exchange one currency for another

Currency pair, the quotation of the relative value of a currency unit against the unit of another currency in the foreign exchange market

Digital currency exchanger, market makers which exchange fiat currency for electronic money

25. Freight Derivatives A financial instrument's value that is derived on the future levels of freight rates, such as "dry bulk" carrying rates and oil tanker rates. Freight derivatives are used most often by end users (such as ship owners and grain-houses) and by suppliers (such as integrated oil companies and international trading corporations) to mitigate risk and hedge against price spikes in the supply chain.

As with all derivatives, market speculators, like hedge funds and individual traders, participate in both the buying and selling of these contracts providing for a new, more liquid, marketplace.26. Gross Domestic Product

is themarket valueof all officially recognized final goods and services produced within a country in a given period of time. GDPper capitais often considered an indicator of a country'sstandard of living;[2][3]GDP per capita is not a measure of personal income (SeeStandard of living and GDP). Under economic theory, GDP per capita exactly equals the gross domestic income (GDI) per capita (SeeGross domestic income).

GDP is related tonational accounts, a subject inmacroeconomics. GDP is not to be confused withgross national product(GNP) which allocates production based on ownership.

27. Gross National Product

is themarket valueof all officially recognized final goods and services produced within a country in a given period of time. GDPper capitais often considered an indicator of a country'sstandard of living;[2]

HYPERLINK "http://en.wikipedia.org/wiki/Gross_domestic_product" \l "cite_note-3" [3]GDP per capita is not a measure of personal income (SeeStandard of living and GDP). Under economic theory, GDP per capita exactly equals the gross domestic income (GDI) per capita (SeeGross domestic income).

GDP is related tonational accounts, a subject inmacroeconomics. GDP is not to be confused withgross national product(GNP) which allocates production based on ownership.

28. Hedging is an investment position intended to offset potential losses/gains that may be incurred by a companion investment. In simple language, a hedge is used to reduce any substantial losses/gains suffered by an individual or an organization.

A hedge can be constructed from many types of financial instruments, includingstocks,exchange-traded funds,insurance,forward contracts,swaps,options, many types ofover-the-counterandderivativeproducts, andfutures contracts.

Publicfutures marketswere established in the 19th century[1]to allow transparent, standardized, and efficient hedging of agriculturalcommodityprices; they have since expanded to includefutures contractsfor hedging the values ofenergy,precious metals,foreign currency, andinterest ratefluctuations.

29. Hong Kong Convention The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 (the Hong Kong Convention), was adopted at a diplomatic conference held in Hong Kong, China, from 11 to 15 May 2009, which was attended by delegates from 63 countries.

The Conventionis aimed at ensuring that ships, when being recycled after reaching the end of their operational lives, do not pose any unnecessary risks to human health, safety and to the environment.

30. Inflationinflationis a rise in the generallevel of pricesof goods and services in aneconomyover a period of time.[1]When the general price level rises, each unit ofcurrencybuys fewer goods and services. Consequently, inflation reflects a reduction in thepurchasing powerper unit of money a loss of real value in the medium of exchange and unit of account within the economy.[2][3]A chief measure of price inflation is the inflation rate, the annualized percentage change in a generalprice index(normally theconsumer price index) over time.[4]31. Initial Public Offering (IPO)

initial public offering(IPO) orstock market launchis a type ofpublic offeringwhere shares ofstockin a company are sold to the general public, on asecurities exchange, for the first time. Through this process, aprivate companytransforms into apublic company. Initial public offerings are used by companies to raise expansion capital, to possiblymonetizethe investments of early private investors, and to become publicly traded enterprises. A company selling shares is never required to repay the capital to its public investors. After the IPO, when shares trade freely in the open market, money passes between public investors. Although an IPO offers many advantages, there are also significant disadvantages. Chief among these are the costs associated with the process, and the requirement to disclose certain information that could prove helpful to competitors, or create difficulties with vendors. Details of the proposed offering are disclosed to potential purchasers in the form of a lengthy document known as aprospectus. Most companies undertaking an IPO do so with the assistance of aninvestment bankingfirm acting in the capacity of anunderwriter. Underwriters provide a valuable service, which includes help with correctly assessing the value of shares (share price), and establishing a public market for shares (initial sale). Alternative methods such as thedutch auctionhave also been explored. In terms of size and public participation, the most notable example of this method is theGoogleIPO.[1]China has recently emerged as a major IPO market, with several of the largest IPOs taking place in that country.32. Internal Rate of Return (IRR)

- The internal rate of return on an investment or project is the "annualized effective compounded return rate" or "rate of return" that makes thenet present value(NPV as NET*1/(1+IRR)^year) of all cash flows (both positive and negative) from a particular investment equal to zero. It can also be defined as the discount rate at which the present value of all future cash flow is equal to the initial investment or in other words the rate at which an investment breaks even.

In more specific terms, the IRR of an investment is thediscount rateat which thenet present valueof costs (negative cash flows) of the investment equals thenet present valueof the benefits (positive cash flows) of the investment.

IRR calculations are commonly used to evaluate the desirability of investments or projects. The higher a project's IRR, the more desirable it is to undertake the project. Assuming all projects require the same amount of up-front investment, the project with the highest IRR would be considered the best and undertaken first.

A firm (or individual) should, in theory, undertake all projects or investments available with IRRs that exceed thecost of capital. Investment may be limited by availability of funds to the firm and/or by the firm's capacity or ability to manage numerous projects.

33. Intra-Port Competition

- widely regarded as beneficial, for the competitiveness of ports, for local and national economies and for consumers and exporting industries. The aim of the paper is to analyse the benefits resulting from the presence of intra-port competition. Even though this issue has been addressed before, a thorough and complete overview of the effects of intra-port competition, enabling conditions for intra-port competition and policies in case of lacking intra-port competition are absent. The paper presents first a short overview of previous studies dealing with intra-port competition. Second, it discusses the two main arguments underlying the benefits of intra-port competition. In this context, attention is given to the relation between intra-port and inter-port competition. Third, the paper examines the conditions under which these arguments are valid and intra-port competition can be introduced. Possible policy responses to limited or absent intra-port competition are discussed in this section as well. Fourth, the need to introduce effects of intra-port competition in port modelling is briefly. Finally, the paper presents empirical evidence of the effects of intra-port competition.34. Inventory Certificate

- Adocumentofverificationprovided bymanagementto anauditorof thestatusof thecompany'sinventoryincludingquantity,classification,condition,valuationand themethodsfor determining each. The auditor will use thecertificateas the basis of its own investigation into itsaccuracy.

Read more:http://www.businessdictionary.com/definition/inventory-certificate.html#ixzz2clBKHhJq35. Landlord Port

- At a landlord port, the port authority builds the wharves, which it then rents or leases to a terminal operator (usually a stevedoring company). The operator invests in cargo-handling equipment (forklifts, cranes, etc), hires longshore laborers to operate such lift machinery and negotiates contracts with ocean carriers (steamship services) to handle the unloading and loading of ship cargoes.36. Liquidity

- . The degree to which an asset or security can be bought or sold in the market without affecting the asset's price. Liquidity is characterized by a high level of trading activity. Assets that can be easily bought or sold are known as liquid assets.

2. The ability to convert an asset to cash quickly. Also known as "marketability."

There is no specific liquidity formula; however, liquidity is often calculated by using liquidity ratios.37. LNG vessel38. MARINA39. Market Based Measure (MBM)

Market-based measures include: emissions trading, emission related levies - charges and taxes, and emissions offsetting; all of which aim to contribute to the achievement of specific environmental goals, at a lower cost, and in a more flexible manner, than traditional command and control regulatory measures. Market-based measures are among the elements of a comprehensive mitigation strategy to address greenhouse gas (GHG) emissions from international aviation that are being considered by ICAO.40. Monopoly

exists when a specific person orenterpriseis the only supplier of a particular commodity (this contrasts with amonopsonywhich relates to a single entity's control of amarketto purchase a good or service, and witholigopolywhich consists of a few entities dominating anindustry).[2]Monopolies are thus characterized by a lack of economiccompetitionto produce thegoodorserviceand a lack of viablesubstitute goods.[3]The verb "monopolize" refers to theprocessby which a company gains the ability to raise prices or exclude competitors. In economics, a monopoly is a single seller. In law, a monopoly is a business entity that has significant market power, that is, the power to charge high prices.[4]Although monopolies may be big businesses, size is not a characteristic of a monopoly. A small business may still have the power to raise prices in a small industry (or market).[5]41. Monopsony

s amarket formin which only one buyer faces many sellers.

In themicroeconomictheory ofimperfect competition, themonopsonistis assumed to be able to dictate terms to its suppliers, as the only purchaser of a good or service, much in the same manner that amonopolistis said to control the market for its buyers in amonopoly, in which only one seller faces many buyers.

In addition to its use in microeconomic theory,monopsonyandmonopsonistare descriptive terms often used to describe a market where a single buyer substantially controls the market as the major purchaser of goods and services. Examples include themilitary industry[1]and thespace industry.[2]The Railways is the only industry that can be characterized as both a Monopoly and a Monopsony.

42. New Arctic Shipping Routes

a shortcut between Asia and Europe along Russia's Arctic Ocean coast. This marks the first time oil-derived products have been moved in such large volume through what maritime explorers of centuries past dubbed the Northeast Passage.43. Newbuilding

44. Oligopoly

Oligopoly is a common market form where a small number of firms are in competition. As a quantitative description of oligopoly, the four-firmconcentration ratiois often utilized. This measure expresses the market share of the four largest firms in an industry as a percentage. For example, as of fourth quarter 2008, Verizon, AT&T, Sprint, and T-Mobile together control 89% of the US cellular phone market.

Oligopolisticcompetitioncan give rise to a wide range of different outcomes. In some situations, the firms may employ restrictive trade practices (collusion, market sharing etc.) to raise prices and restrict production in much the same way as amonopoly. Where there is a formal agreement for such collusion, this is known as acartel. A primary example of such a cartel isOPECwhich has a profound influence on the international price of oil.

45. Panamax

PanamaxandNew Panamaxare terms for the size limits for ships traveling through thePanama Canal. Formally, these limits and requirements are published by thePanama Canal Authority (ACP), titled "Vessel Requirements".[1]These requirements also describe topics like exceptional dry seasonal limits, propulsion, communications, and detailed ship design.

The allowable size is limited by the width and length of the availablelockchambers, by the depth of water in the canal, and by the height of theBridge of the Americassince that bridge's construction. These dimensions give clear parameters for ships destined to traverse the Panama Canal and have influenced the design of cargo ships, naval vessels, and passenger ships.

Panamax specifications have been in effect since the opening of the canal in 1914. Ships that do not fall within the Panamax-sizes are calledpost-Panamax. In 2009 the ACP published the "New Panamax"[2]that will be in effect when the canal'sthird set of locks, larger than the current two, becomes operational in 2015.

46. Payback

Payback periodincapital budgetingrefers to the period of time required for the return on an investment to "repay" the sum of the original investment. For example, a $1000 investment which returned $500 per year would have a two year payback period. Thetime value of moneyis not taken into account. Payback period intuitively measures how long something takes to "pay for itself." All else being equal, shorter payback periods are preferable to longer payback periods. Payback period is widely used because of its ease of use despite the recognized limitations described below.

The term is also widely used in other types of investment areas, often with respect toenergy efficiencytechnologies, maintenance, upgrades, or other changes. For example, acompact fluorescentlight bulb may be described as having a payback period of a certain number of years or operating hours, assuming certain costs. Here, the return to the investment consists of reduced operating costs. Although primarily a financial term, the concept of a payback period is occasionally extended to other uses, such as energy payback period (the period of time over which the energy savings of a project equal the amount of energy expended since project inception); these other terms may not be standardized or widely used.

Payback period as a tool of analysis is often used because it is easy to apply and easy to understand for most individuals, regardless of academic training or field of endeavour. When used carefully or to compare similar investments, it can be quite useful. As a stand-alone tool to compare an investment to "doing nothing," payback period has no explicit criteria for decision-making (except, perhaps, that the payback period should be less than infinity).

The payback period is considered a method of analysis with serious limitations and qualifications for its use, because it does not account for thetime value of money,risk,financingor other important considerations, such as theopportunity cost. Whilst the time value of money can be rectified by applying a weighted average cost of capital discount, it is generally agreed that this tool for investment decisions should not be used in isolation. Alternative measures of "return" preferred by economists arenet present valueandinternal rate of return. An implicit assumption in the use of payback period is that returns to the investment continue after the payback period. Payback period does not specify any required comparison to other investments or even to not making an investment.

47. Philippine Ports Authority

48. Philippine Stock Exchange

ThePhilippine Stock Exchange(Filipino:Pamilihang Sapi ng Pilipinas) (PSE:PSE) is the nationalstock exchangeof thePhilippines, one of the oldest stock exchanges inSoutheast Asia, having been in continuous operation since its inception in 1927. It currently maintains two trading floors, one at its headquarters at the PSE Plaza Ayala Triangle,Ayala Tower OneinMakati City's Central Business District, and one at the Philippine Stock Exchange Centre (Tektite Towers),Ortigas CenterinPasig City. The PSE is composed of a 15-man Board of Directors, chaired by Jos T. Pardo.

The main index for PSE is thePSE Composite Indexor PSEi, which is composed of thirty (30) listed companies. The selection of companies in the PSEi is based on a specific set of criteria. There are also six additional sector-based indices.

Trading on the PSE trading starts at 9:30 amPHTand ends at 12:00 pm, pauses for a 1 hour 30 minute break, and resumes trading from 1:30 pm to a 3:30 pm session closure.

49. Private Placement

(or non-public offering) is afunding roundofsecuritieswhich are sold not through apublic offering, but rather through a private offering, mostly to a small number of choseninvestors.[1]"Private placement" usually refers to non-public offering of shares in apublic company(since, of course, any offering of shares in aprivate companyis and can only be a private offering).

PIPE(private investment in public equity) deals are one type of private placement.SEDA(standby equity distribution agreement) is also a form of private placement.

50. Recession

arecessionis abusiness cyclecontraction, a general slowdown in economic activity.[1]

HYPERLINK "http://en.wikipedia.org/wiki/Recession" \l "cite_note-2" [2]Macroeconomicindicators such as GDP(Gross Domestic Product), employment, investment spending,capacity utilization, household income, business profits, and inflation fall, while bankruptcies and theunemployment raterise.

Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be triggered by various events, such as afinancial crisis, an external trade shock, an adversesupply shockor the bursting of aneconomic bubble. Governments usually respond to recessions by adopting expansionarymacroeconomic policies, such asincreasing money supply,increasing government spending and decreasing taxation.

51. Return on Investment (ROI)

is the concept of aninvestmentof some resource yielding a benefit to the investor. A high ROI means the investment gains compare favorably to investment cost. As a performance measure, ROI is used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments.[1]In purely economic terms, it is one way of considering profits in relation to capital invested.52. Risk Management

is the identification, assessment, and prioritization ofrisks(defined inISO 31000asthe effect of uncertainty on objectives, whether positive or negative) followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events[1]or to maximize the realization of opportunities. Risks can come from uncertainty in financial markets, threats from project failures (at any phase in design, development, production, or sustainment life-cycles), legal liabilities, credit risk, accidents,natural causes and disastersas well as deliberate attack from an adversary, or events of uncertain or unpredictableroot-cause. Several risk managementstandardshave been developed including theProject Management Institute, theNational Institute of Standards and Technology, actuarial societies, and ISO standards.[2]

HYPERLINK "http://en.wikipedia.org/wiki/Risk_management" \l "cite_note-iso-3" [3]Methods, definitions and goals vary widely according to whether the risk management method is in the context of project management, security,engineering, industrial processes, financial portfolios, actuarial assessments, or public health and safety.

The strategies to manage threats (uncertainties with negative consequences) typically include transferring the threat to another party, avoiding the threat, reducing the negative effect or probability of the threat, or even accepting some or all of the potential or actual consequences of a particular threat, and the opposites for opportunities (uncertain future states with benefits).

Certain aspects of many of the risk management standards have come under criticism for having no measurable improvement on risk, whether the confidence in estimates and decisions seem to increase.[1]53. Salvage Value

Salvage valueis the estimated resale value of anassetat the end of itsuseful life. You subtract salvage value from the cost of afixed assetto determine the amount of the asset cost that will bedepreciated. Thus, salvage value is used as a component of the depreciation calculation.

For example, ABC Company buys an asset for $100,000, and estimates that its salvage value will be $10,000 in five years, when it plans to dispose of the asset. This means that ABC will depreciate $90,000 of the asset cost over five years, leaving $10,000 of the cost remaining at the end of that time. ABC expects to then sell the asset for $10,000, which will eliminate the asset from ABC's accounting records.

If it is too difficult to determine a salvage value, or if the salvage value is expected to be minimal, then you do not have to include a salvage value in your depreciation calculations. Instead, simply depreciate the entire cost of the fixed asset over its useful life. You would then recognize any proceeds from the eventual disposition of the asset as a gain.

The salvage value concept can be used in a fraudulent manner to estimate a high salvage value for certain assets, which results in the under-reporting of depreciation and therefore of higher profits than would normally be the case.

Salvage value is not discounted to its present value.

54. Shipbrokers

Shipbrokingis afinancial service, which forms part of the globalshipping industry.Shipbrokersare specialist intermediaries/negotiators (i.e.brokers) betweenshipownersandchartererswho useshipsto transportcargo, or between buyers and sellers of ships.

Some brokerage firms have developed into large companies, incorporating departments specialising in various sectors, e.g. Dry Cargo Chartering, Tanker Chartering, Container Chartering, Sale & Purchase, Demolition and Research. Other "boutique" companies concentrate on specific sectors of the shipping market.

The principal shipping and shipbroking centres areLondon,New YorkandSingapore.Tokyohas a longstanding tradition in shipping/shipbroking, which is now more focussed onJapanesedomestic trade. Other places continue to develop in international shipping services, such as:Hong Kong,Shanghai,DelhiandMumbai;Copenhagen,Geneva,Genoa,Hamburg,Oslo,ParisandPiraeusinEurope; and inNorth America,Connecticut,HoustonandMontrealare important shipbroking centres.

Until recently, it was commonplace for shipbrokers to cover more than one discipline, although nowadays the vast majority of shipbrokers specialise. TheInstituteofCharteredShipbrokerssets educational standards throughout the industry,Fellowshipof which is considered a great honour.

55. Stagflation

Stagflation, aportmanteauofstagnationandinflation, is a term used ineconomicsto describe a situation where aninflation rateis high, the economic growth rate slows down, and unemployment remains steadily high. It raises a dilemma foreconomic policysince actions designed to lower inflation may exacerbate unemployment, and vice versa.

The term is generally attributed to a British politician who became chancellor of the exchequer in 1970,Iain Macleod, who coined the phrase in his speech toParliamentin 1965.[1][2][3][4][notes 1]In the version ofKeynesian macroeconomic theorywhich was dominant between the end of WWII and the late-1970s, inflation and recession were regarded as mutually exclusive, the relationship between the two being described by thePhillips curve. Stagflation is very costly and difficult to eradicate once it starts, in human terms as well as in budget deficits.

In the political arena, one measure of stagflation, termed theMisery Index(derived by the simple addition of the inflation rate to the unemployment rate), was used to swing presidential elections in the United States in 1976 and 1980.

56. Supply and Demand

Inmicroeconomics,supply and demandis aneconomic modelofprice determinationin amarket. It concludes that in acompetitive market, theunit pricefor a particulargoodwill vary until it settles at a point where the quantity demanded by consumers (at current price) will equal the quantity supplied by producers (at current price), resulting in aneconomic equilibriumfor price andquantity.

The four basic laws ofsupplyanddemandare:[1]1. If demand increases and supply remains unchanged, a shortage occurs, leading to a higher equilibrium price.

2. If demand decreases and supply remains unchanged, a surplus occurs, leading to a lower equilibrium price.

3. If demand remains unchanged and supply increases, a surplus occurs, leading to a lower equilibrium price.

4. If demand remains unchanged and supply decreases, a shortage occurs, leading to a higher equilibrium price.

57. Tariff Policy

A tariff policy is a strategy of taxing imported or exported goods and services from one country to another. These taxes often seek to protect domestic industries or punish countries for policies related or unrelated to the economy. Considered by friendlier countries to be a barrier to production and positive interaction, some countries have created exceptions to their tariff policies known asfree tradeagreements or free trade zones.

The primary focus of a tariff policy is to protect a domestic industry from a comparable foreign import that would otherwise be available at a much cheaper price. For example, if a country is trying to increase its automobile production, allowing in less expensive vehicles of similar quality in would stunt that industrial development. Therefore, a tariff policy may be enacted as a way to give the fledgling domestic industry a chance.

Suggest EditsA tariff policy may be directed at a certain product or, to a lesser extent, at certain countries. A country may seek to impose economic sanctions on another country as a punitive measure, for example. The goal is to use economic pressures to encourage reform and change. In some cases, a tariff may be retaliatory to counter a tariff the other country has imposed.

58. Time Charter Average (TCA)

Time charter equivalent revenues, or TCE revenues, is a standard shipping industry measure of revenue after deducting out direct expenses of operating a ship. Voyage expenses usually consist primarily of port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by the charterer under a time charter contract, as well as commissions. TCE is also net of anyforward freight agreements (FFAs)the company may have entered into as hedges against spot market rates.59. Tool Port.60. Throughput

Throughput is the movement of inputs and outputs through a production process. Without access to and assurance of a supply of inputs, a successful business enterprise would not be possible.[1]In the business managementTheory of Constraints,throughputis the rate at which asystemachieves its goal. Often this is monetary revenue and is in contrast tooutput, which is inventory that may be sold or stored in a warehouse. In this casethroughputis measured by revenue received (or not) at the point of saleexactly the right time. Output that becomes part of theinventoryin a warehouse may mislead investors or others about the organizations condition by inflating the apparent value of its assets. TheTheory of Constraintsandthroughput accountingexplicitly avoid that trap.

Throughput can be best described as the rate at which a system generates its products / services per unit of time. Businesses often measure their throughput using a mathematical equation known as Little's Law, which is related to inventories andprocess time: time to fully process a single product.

Using Little's Law, one can calculate throughput with the equation:,whereIis the number of units contained within the system, Inventory;Tis the time it takes for all the inventory to go through the process, Flow Time; andRis the rate at which the process is delivering throughput, Flow Rate or Throughput. If you solve forR, you will get:

ESSAY TOPICS

1. On Political-Legal issues Bassel Convention and Hong Kong Convention

The development of the Hong Kong Convention

The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 (the Hong Kong Convention), was adopted at a diplomatic conference held in Hong Kong, China, from 11 to 15 May 2009, which was attended by delegates from 63 countries.

The Conventionis aimed at ensuring that ships, when being recycled after reaching the end of their operational lives, do not pose any unnecessary risks to human health, safety and to the environment.

The Hong Kong Convention intends to address all the issues around ship recycling, including the fact that ships sold for scrapping may contain environmentally hazardous substances such as asbestos, heavy metals, hydrocarbons, ozone-depleting substances and others. It also addresses concerns raised about the working and environmental conditions at many of the world's ship recycling locations.

The text of the Hong Kong Convention was developed over three and a half years, with input from IMO Member States and relevant non-governmental organizations, and in co-operation with the International Labour Organization and the Parties to the Basel Convention.

Regulations in the new Convention cover: the design, construction, operation and preparation of ships so as to facilitate safe and environmentally sound recycling without compromising the safety and operational efficiency of ships; the operation of ship recycling facilities in a safe and environmentally sound manner; and the establishment of an appropriate enforcement mechanism for ship recycling, incorporating certification and reporting requirements.

Upon entry into force of the Hong Kong Convention, ships to be sent for recycling will be required to carry an inventory of hazardous materials, which will be specific to each ship. An appendix to the Convention provides a list of hazardous materials the installation or use of which is prohibited or restricted in shipyards, ship repair yards, and ships of Parties to the Convention. Ships will be required to have an initial survey to verify the inventory of hazardous materials, additional surveys during the life of the ship, and a final survey prior to recycling.

Ship recycling yards will be required to provide a "Ship Recycling Plan", specifying the manner in which each ship will be recycled, depending on its particulars and its inventory. Parties will be required to take effective measures to ensure that ship recycling facilities under their jurisdiction comply with the Convention.

The following guidelines have been developed and adopted to assist States in the early implementation of the Conventions technical standards:

-2011 Guidelines for the Development of the Inventory of Hazardous Materials, adopted by resolutionMEPC.197(62);

-2011 Guidelines for the Development of the Ship Recycling Plan, adopted by resolutionMEPC.196(62);

-2012 Guidelines for Safe and Environmentally Sound Ship Recycling, adopted by resolutionMEPC.210(63); and

-2012 Guidelines for the Authorization of Ship Recycling Facilities, adopted by resolutionMEPC.211(63).

Also two further guidelines have been developedand adopted to assist Statesin the implementation of the Conventionafter it enters into force:

-2012Guidelines for the survey and certification of ships under the Hong Kong Convention, adopted by resolutionMEPC.222(64); and

-2012 Guidelines for the inspection of ships under the Hong Kong Convention, adopted by resolutionMEPC.223(64).

Entry into force criteriaThe Convention is open for accession by any State. It will enter into force24 months after the date on which 15 States, representing 40 per cent of world merchant shipping by gross tonnage, have either signed it without reservation as to ratification, acceptance or approval or have deposited instruments of ratification, acceptance, approval or accession with the Secretary-General. Furthermore, the combined maximum annual ship recycling volume of those States must, during the preceding 10 years, constitute not less than 3 per cent of their combined merchant shipping tonnage. For more detailed information please refer to resolutionMEPC.178(59)on the calculation of the recycling capacity for meeting the entry-into-force conditions of the Hong Kong Convention and documentMEPC 64/INF.2on the same topic.

Historic background

IMOs role in the recycling of ships, the terminology used to refer to ship scrapping, was first raised at the 44th MEPC session in March 2000 following which a correspondence group was established to research this issue and provide information about current ship recycling practices and suggestions on the role of IMO.

Guidelines were developed by the Marine Environment Protection Committee (MEPC) and finalized at the MEPC 49th session in July 2003. These guidelines were adopted as the:Guidelines on Ship Recyclingby the 23rd Assembly in November-December 2003 by resolutionA.962(23)and were subsequently amended by resolutionA.980(24).

ResolutionA.962(23)IMO Guidelines on Ship Recyclinggive advice to all stakeholders in the recycling process, including administrations of ship building and maritime equipment supplying countries, flag, port and recycling States, as well as intergovernmental organizations and commercial bodies such as shipowners, ship builders, repairers and recycling yards.

The guidelines noted that, in the process of recycling ships, virtually nothing goes to waste. The materials and equipment are almost entirely reused. Steel is reprocessed to become, for instance, reinforcing rods for use in the construction industry or as corner castings and hinges for containers. Ships' generators are reused ashore. Batteries find their way into the local economy. Hydrocarbons on board become reclaimed oil products to be used as fuel in rolling mills or brick kilns. Light fittings find further use on land. Furthermore, new steel production from recycled steel requires only one third of the energy used for steel production from raw materials. Recycling thus makes a positive contribution to the global conservation of energy and resources and, in the process, employs a large, if predominantly unskilled, workforce. Properly handled, ship recycling is, without question, a "green" industry. However, the guidelines also recognized that, although the principle of ship recycling may be sound, the working practices and environmental standards in the yards often leave much to be desired. While ultimate responsibility for conditions in the yards has to lie with the countries in which they are situated, other stakeholders must be encouraged to contribute towards minimising potential problems in the yards.

The Guidelines on Ship Recycling also introduced the concept of a "Green Passport" for ships. It was envisaged that this document, containing an inventory of all materials used in the construction of a ship that are potentially hazardous to human health or the environment, would accompany the ship throughout its working life. Produced by the shipyard at the construction stage and passed to the purchaser of the vessel, the document would be in a format that would enable any subsequent changes in materials or equipment to be recorded. Successive owners of the ship would maintain the accuracy of the Green Passport and incorporate into it all relevant design and equipment changes, with the final owner delivering it, with the vessel, to the recycling yard.

Subsequently, at its 53rd session in July 2005, the Marine Environment Protection Committee (MEPC) agreed that the IMO should develop, as a high priority, a new instrument on recycling of ships with a view to providing legally binding and globally applicable ship recycling regulations for international shipping and for recycling facilities. MEPC 53 also agreed that the new IMO instrument on ship recycling should include regulations for the design, construction, operation and preparation of ships so as to facilitate safe and environmentally sound recycling, without compromising the safety and operational efficiency of ships; the operation of ship recycling facilities in a safe and environmentally sound manner; and the establishment of an appropriate enforcement mechanism for ship recycling (certification/reporting requirements). MEPC 53 further agreed that the above-mentioned instrument should be completed in time for its consideration and adoption in the biennium 2008-2009.

The IMO Assembly in November-December 2005 subsequently agreed that IMO should develop a new legally-binding instrument on ship recycling. Assembly resolutionA.981(24)New legally-binding instrument on Ship Recycling requested the Marine Environment Protection Committee to develop a new instrument that would provide regulations for:

-the design, construction, operation and preparation of ships so as to facilitate safe and environmentally sound recycling, without compromising the safety and operational efficiency of ships;

-the operation of ship recycling facilities in a safe and environmentally sound manner; and

-the establishment of an appropriate enforcement mechanism for ship recycling, incorporating certification and reporting requirements.

The resolution referred to the urgent need for IMO to contribute to the development of an effective solution to the issue of ship recycling, which will minimize, in the most effective, efficient and sustainable way, the environmental, occupational health and safety risks related to ship recycling, taking into account the particular characteristics of world maritime transport and the need for securing the smooth withdrawal of ships that have reached the end of their operating lives.

2. On Operational issues, Port Operations3. On Financial issues, Financial Ratios of a Shipping Company4. On Labor issues, future Demand and SupplyForecast of Future Labor Supply and Demand

Over the next several years, the Federal Government will experience the largest unplanned exodus of middle and senior management talent in the history of our nation as significant numbers of older workers currently in federal service become retirement-eligible. It is not known whether these departures will be as cataclysmic as a tsunami, or will instead ebb and flow over a greater number of years as the Baby Boomer generation times their retirements to meet individual life choices. Nor is it fully understood yet how the recent economic turmoil will impact federal retirements. No matter what the scenario, eventually the need to replace outgoing expertise, and also to fill newly created jobs, will result in a significant demand for talent within the labor market. This chapter provides a discussion of several labor force trends and their potential impact on IT workforce management.

MAKING SENSE OF FEDERAL RETIREMENT PROJECTIONS

Federal workforce retirement behavior is influenced by a variety of individual and environmental factors. The first is individual retirement eligibility, which is based on the type of retirement system, age of the employee, length of service and minimum retirement age. Retirement decisions are further dependent on how individuals prioritize work, based on several factors that could include hours spent at work, desire for variety, financial needs, willingness to learn, and level of acceptable responsibility.1Additionally, advancements in technology significantly influence individual career decisions of personnel in IT-related career fields who may be either positively or negatively impacted by changing technology.

External environment influencers include the state of the economy and labor market demands, neither of which can be controlled by the employee. Finally, the traditional retirement model of employees ending their career after reaching their peak status is gradually shifting to new models of retirement. The interplay of all of these changeable conditions creates challenges in modeling predictive retirement behavior. The following retirement statistics (calculated prior to the recent economic recession) are provided as points of reference:

From FY2006FY2016, there will be 956,613 retirement-eligible employees throughout the Federal Government, but only 586,339 are predicted to retire during that period.2 The average (or mean) continued federal employment after reaching retirement eligibility is 3.1 years, which can be further refined to 3.3 years for males and 2.7 years for females.3 Fifty-one percent of employees remain in the Federal Government 4 years after first becoming eligible for retirement, with approximately half of this group continuing to work for 9 more years.4Nation-wide and global financial reversals have contributed to significant drops in home equity and retirement fund valuations. The recession, as well as the Boomers longer life expectancy, are causing many individuals to delay retirement, or to consider never retiring, as indicated in several surveys sponsored by the American Association of Retired People (AARP). This increasingly apparent trend has led BusinessWeek magazine to label the Boomers as Gen U, or Generation Unretired.5U.S. LABOR MARKET FORECAST: DEMAND UP AND SUPPLY DOWN

The U.S. labor force annual growth rate peaked in the 1970s at 2.6% and has been decreasing with each subsequent decade, largely due to declining birth rates and the stabilization of the number of women entering the labor market.6,7From 1996 to 2006, the growth rate declined to 1.2% and it is expected to further decrease to 0.8% between 20062016.8As the Nations need to recruit replacement workers increases, efforts will be challenged by this further slowdown in the growth of the U.S. labor force.

Over the next decade, the projected labor force participation rate by age shows significant variation. The number of workers in the age range of 55 and older participating in the labor force is projected to be the fastest growing age group, from 38% in 2006 to 42.8% in 2016.9Meanwhile, the amount of new entrants coming fresh from campuses is growing at a lower rate than workers who have been in the labor force for some time. In addition to targeting the Net Generation for recruitment, agency strategic workforce planning efforts will also need to factor in ways to retain and recruit older workers.10The challenge will be balancing workforce experience sustainability and re-growth. More information about workforce planning can be found inChapter 4.

IT OCCUPATIONAL TRENDS

The Department of Labor has analyzed IT occupations across industry, developing detailed statistics on the 2008 U.S. labor force and projecting IT occupational trends through 2018.11A descriptive summary of the IT occupations included in these projections is listed inFigure 3.1; more detailed information is listed inAppendix D.

New IT jobs creation is being driven by changing technologies and the increasing demand for secure, trusted data and systems. Network Systems/Data Communications Analysts and Computer Applications Software Engineers will experience the greatest percentage of change within their occupations as shown inFigure 3.1. The forecasted impact on the number of jobs created, by IT occupation is shown inTable 3.1. Rankings within the two data sets may differ, depending on the size of the occupation (e.g., Computer Scientists rank fourth in the percentage of growth, but tenth in the number of new jobs created). Based on this forecast, from 20082018, Computer Applications Software Engineers will gain 175,100 new jobs within their occupation, while Computer Operators will lose 19%, or 20,500 jobs, within their job field. Recruitment for many of the new jobs created will focus on Net-Gen college graduates who possess the latest knowledge and skills.

Figure 3.1 Percentage of IT Job Growth from 2008-2018(Source: U.S. Department of Labor, Bureau of Labor Statistics)

IT Occupations20082018Change by 2018

Computer Applications Software Engineers514,800689,900175,100

Network Systems/Data Communications Analysts292,000447,800155,800

Computer Systems Software Engineers394,800515,000120,200

Computer Systems Analysts532,200640,300108,100

Network/Computer System Admins (includes Security Specialists)339,500418,40078,900

Computer Support Specialists: Tech Support/Helpdesk Techs565,700643,70078,000

Computer/Information Systems Managers293,000342,50049,500

Computer Specialists, all other209,300236,80027,500

Database Administrators120,400144,70024,400

Computer/Information Scientists, Research28,90035,9007,000

Computer Programmers426,700414,400-12,300

Computer Operators110,00089,500-20,500

NET INCREASE IN IT JOBS3,827,3004,618,900791,700

Table 3.1 Where the IT Jobs Are(Source: U.S. Department of Labor, Bureau of Labor Statistics)EDUCATION

The majority of new IT jobs will require at a minimum a bachelors degree. Technical degree requirements predominantly will include the Computer Science, Computer Engineering, Computer Information Systems, and Information Science areas of study. For more senior level IT jobs, increasingly there is a desire for education that includes both technology and business skills while some research positions require a PhD.

Two exceptions to the degree requirement are Computer Operators and Computers Support Specialists/System Administrators. In the case of Computer Operators, on-the-job training may continue to be the norm. As for Computers Support Specialists/System Administrators, recruitment selection will be driven by strong technical skills and certifications will be essential.

In the dozen years between 19912003, annual bachelors degrees conferred in Computer and Information Sciences almost doubled, growing from 25,159 to 57,433, and then peaked in 2004, with 59,488 degrees conferred; by 2007, graduation rates had dropped by 30%.12This trend is troubling, given the expected job growth within this field and the need for new talent to replace retiring Baby Boomers. Additionally, this field includes many disciplines that are a source for critical cybersecurity jobs (e.g., Computer Networking, Systems Administration, and Information Systems Security).

Table 3.2highlights the overall projected demand for new IT jobs. Some mitigation may be possible from redistributing individuals from anticipated Computer Programming and Computer Operator job decreases, but this action might require additional formal education for those individuals. Additionally, while general college enrollment rates are high, the graduation rates are not. In the United States, although 70% of the Net Generation will start a degree program, only 30% are expected to have a college degree by age 30.13The shortfalls described assume all new IT jobs require a four-year degree; in occupations such as Computer Support Specialist and Database Administrator, two-year degrees or commercial certifications may be sufficient for some lower skilled jobs.

IT Job Outlook Through 2018Number of New IT Jobs

Total Demand (includes total IT job growth)824,400

Net Demand (assumes offsets from, IT job field decreases)791,700

Table 3.2 Potential IT Growth Requiring A College Education(Source: U.S. Department of Labor, Bureau of Labor Statistics, Occupational Outlook Handbook, 2010-11 Edition)

DIVERSITY

The primary dimensions of diversity most typically measured and analyzed in the federal workforce are age, gender, race, and ethnicity. Since it has been established previously that a college degree has become a requirement for many federal IT jobs, this section will focus primarily on the role that college education trends and workplace attitudes play in achieving gender and racial/ethnic diversity in the labor force. Workplace impacts from a multi-generational workforce are discussed inChapter 6.

The Gender Gap- More women have earned degrees than men since the 1980s and, over the long term, the number of women awarded degrees will continue to outpace men for associate, bachelors, and masters degrees.14From 20072019, the total number of degrees at all levels is projected to increase for women by 28% as opposed to 17% for men.15While women are earning more degrees in general, significant gender differences exist in the number of women obtaining bachelors degrees in Computer and Information Sciences and Computer Engineering. Over the long term, the number of women completing degrees in Computer and Information Sciences has been declining, while there has been only a marginal increase in the number of women receiving Computer Engineering degrees as demonstrated by data from the National Center for Education Statistics:

Computer and Information Sciences and Support Services Degrees Earned by Women: 29.4% in 1990-91, 27.5% in 1995-96, and 20.6% in 2005-06.16 Engineering and Engineering Technologies Degrees Earned by Women: 14.1% in 1990-91, 16.2% in 1995-96, and 17.9% in 2005-06.17As a result of these trends, women earn less than a quarter of the degrees conferred for Computer and Information Sciences and Engineering.Figure 3.2highlights the significant gender gaps for degrees compared to the average for all degrees and across the four major IT fields of study.

While industry can often hire scientists, engineers, and technologists from other countries to fill talent gaps, the tightening U.S. labor market will be further constrained for federal agencies by the gender gap in IT education. Also exacerbating the situation, female scientists, engineers, and technologists who are already in these occupations, are leaving them due to career shifts. Based on data provided in the the Harvard Business Review article, Stopping the Exodus of Women in Science, the following reasons are cited:18 Hostility in the workplace/machismo atmosphere

Sense of isolation

Disconnect with womens preferred work style

Long hours and excessive travel

Lack of sponsors to clarify career advancement

Organizations should examine female attrition in IT technical occupations to determine if problems exist. At the same time, agencies should encourage female students at the high school level to pursue IT degrees through such outreach events as the Federal IT Shadow Day or other high school education initiatives.

In 2008, college enrollment in Computer Science programs saw an upswing for the first time in six years, increasing 6.2% over 2007.19While this is good news, the number of women graduates remains steady, and diversity within this occupation is still an issue. Research shows that female and ethnic/racial minority interest in science and math skill areas may wane as early as sixth grade, presenting a challenge to those federal organizations and academic institutions actively seeking to improve gender and minority representation.20

Bachelors MalesAverage for All Degrees42.5

Computer Engineer89.2

Electrical/Electronics Engineer86.4

Computer/Information Science79.4

IT Management71.5

Bachelors FemalesAverage for All Degrees57.5

Computer Engineer10.8

Electrical/Electronics Engineer13.6

Computer/Information Science20.6

IT Management28.5

Masters MalesAverage for All Degrees40

Computer Engineer74.3

Electrical/Electronics Engineer80.1

Computer/Information Science73.1

IT Management68.5

Masters FemalesAverage for All Degrees60

Computer Engineer25.7

Electrical/Electronics Engineer19.9

Computer/Information Science26.9

IT Management31.5

Figure 3.2 Percentage of IT Degrees Conferred by Gender for 2005-2006*(Source: Digest of Education Statistics 2007)

* Computer Engineering also includes Computer Engineering, General, and Computer Software Engineering. IT Management includes Management Information Systems, General; Information Resources Management/CIO Training; Knowledge Management; and other Management Information Systems and Services.

Race/Ethnicity Trends- In 2003, the Hispanic/Latino community became the largest minority group within the United States. Their growth in population, due to higher birth rates and increasing immigration rates, will heavily influence the diversity of future college enrollments. Projected campus diversity between 20062017 includes a 39% increase in Hispanic enrollment, a 26% increase in both African-American and Asian enrollments, a 30% increase in American Indian/Alaska Native enrollments and a 5% increase in White enrollments.21Currently, African-Americans and Hispanics are underrepresented on college campuses in general, and Hispanics are also underrepresented in Computer and Information Sciences and Support Services majors.Table 3.3provides a comparison of the largest IT field of study with the general labor force by race/ethnicity.

2006 IT Bachelors Degrees

Percent Conferred2006 Civilian Labor Force

Race/Ethnicity(excludes non-resident)Percent Distribution

White67.368.2

Black/African-American13.211.4

Hispanic/Latino7.113.7

Asian and All Other Groups12.46.7

Table 3.3 Diversity Perspective of U.S. Computer/information Science Graduates Compared to the U.S. Labor Force*

* Race/Ethnicity groupings were aggregated to enable comparison between Department of Labor data and data contained in Table 275 of the Digest of Education Statistics 2007. Additionally, non-resident data was not included, which increased the percentage of IT degrees conferred by race/ethnicity. The field of study for Computer and Information Sciences and Support Services includes: General and Other Computer and Information Sciences; Artificial Intelligence and Robotics; IT; General, Specific Applications and Other Computer Programming/Programmer; Data Processing; Information Science/Studies; Computer Systems Analysis/Analyst; Web Page, Digital/Multimedia and Information Resources Design; Data Modeling/Warehousing and Database Administration; Computer Graphics; Computer Software and Media Applications, Other; Computer Systems Networking and Telecommunications; Systems Administration/Administrator; System, Networking, and LAN/WAN Management/Manager; Computer and Information Systems Security; Web/Multimedia Management and Webmaster; Computer/IT Services Administration and Management; and Other Computer and Information Sciences and Support Services.

InFigure 3.3, the Computer and Information Sciences and Support Services field of study is compared to the average for all degrees conferred. This figure illustrates similar differences asTable 3.3, while also highlighting the higher than average rate of these IT degrees conferred to non-resident students. International students comprise half of the total enrollment in graduate-level science and engineering fields, with China and India at the forefront. In 2004, China made up 14% of the total worldwide international student population. During this same period, 25.3% of all international students in the United States were from India and China.22

White72.4%

62.9%

Black/9.6%

African-American12.4%

Hispanic/7.2%

Latino6.7%

Asian/6.9%

Pacific Islander10.9%

American Indian/.7%

Native American.6%

Non-Resident3.1%

6.5%

Figure 3.3 Diversity Perspective of Bachelor's Degrees in Computer/Information Sciences Compared to All Degrees Conferred in 2005-2006*(Source: Digest of Education Statistics 2007)

* Computer/Information Science degrees comprise 61.1% of all IT-related degrees. Data for other IT fields of study was not available by race/ethnicity.

CHALLENGES TO IT SKILLS MANAGEMENT

As organizations try to sustain their IT bench strength, they will face several workforce management challenges. Labor supply issues previously discussed will create recruiting and retention issues. At the same time, changing job roles, resulting from the continual introduction of new technology and evolving work practices, have created a community that lacks the maturity in skill development processes and defined career paths.23IT leaders engaged in workforce planning and development need to factor in these variables as they plan for the rising Net-Gen workforce of the future:

Tacit Knowledge Loss- The massive Baby Boomer generation is starting to retire but little has been done to develop a means to capture tacit knowledge. As this highly experienced cadre prepares to leave, the demand for replacement skills will be further exacerbated.

Legacy Applications and Technology Support- The upcoming wave of retirements will impede the ability of many organizations to maintain skilled workers to support legacy systems. Some agencies like the Social Security Administration have taken action to transition to newer programming languages and platforms.24Others still view a technology shift as a long term solution, but the planning for the shift or continued support will need to occur soon.25As commercial training or education is no longer available, new entrants into the labor market typically will not have skills in areas like mainframes or COBOL programming language to hire as replacements for the retiring Baby Boomers.26Technology Rate of Change- The introduction of new technology will continue to increase, creating a constant need to hire or develop employees with the necessary skills to meet the demand. Retraining the current workforce and creating a culture of continuous learning will be fundamental principles for organizations.

IT Hiring Increase- Two thirds of federal agencies listed IT as a mission critical occupation in 2007 and, near term, Partnership for Public Service estimates rank IT occupations as one of the top five federal hiring requirements.27The U.S. Department of Labor is projecting 791,700 new IT hires across all sectors, including the Federal Government, through 2018; Table 3.1 has a breakout of hiring needs by IT occupation.28Citizenship Requirement- The growth of the available U.S. labor pool is shrinking and approximately 25% of the largest growing ethnic group, the Hispanic/Latino population, are not U.S. citizens. While private industry can leverage immigrants and global talent to fill crucial talent gaps, the Governments requirement for United States citizenship restricts the available labor pool. This requirement is not expected to change as the Federal Government increases its focus on cybersecurity and critical information infrastructure protection.

Intense Competition for Veterans- As the future labor market continues to constrict and the demand for talent increases, veterans will become an increasingly sought after talent pool to fill vacancy needs across government as well as the private sector. Organizations that have relied on this pipeline of talent will face increased competition.

IT Degree Shortfalls- As previously discussed, the level of students graduating with IT degrees is less than required to meet future demand and is also being negatively impacted by the gender imbalance in IT degrees conferred.29For 20052006, males outpaced females in IT Computer Management, Information Sciences, and Support Services bachelors degrees by over 3 to 1. For Computer Engineering degrees, the male to female ratio was over 8 to 1.30This further reduces the supply of available talent in the labor market. To close the gender gap in IT-related fields of study, significant intervention would be required at the high school level or earlier.

Less Educated IT Workforce- Currently, Federal Government employees are significantly better educated than the private sector. As both sectors face greater turnover, the demand for available IT college graduates will increase, creating the potential for steep competition. Agencies not able to provide attractive and competitive job offers may need to re-evaluate degree requirements and offer internal degree completion incentives.

Changes in Work Environment- The greater use of alternative work plans and workforce flexibilities, and the expansion of new work models, whether a redefinition of part-time employees or the implementation of 20-hour work week positions, will create personnel management challenges as IT leaders adjust to managing employees working on different schedules.31Greater Need for Supervisory Expertise- In October 2009, the U.S. Merit Systems Protection Board (MSPB) provided a report to the President and Congress, focused on the challenges and opportunities associated with the pending loss of significant numbers of supervisory personnel in the federal workplace. The MSPB is anticipating extensive losses as current data indicates that supervisory personnel tend to be older and have more years of federal experience, thus making them highly likely to retire during the coming wave of Baby Boomer retirements.32In addition to noting the loss of supervisory expertise, the MSPB also described the greater burdens being placed upon supervisors due to several factors, including changing work structure models which require more networking and communication; new personnel performance plans requiring more frequent and detailed observation of individuals performance; and the increased need to manage continuous learning and competency development in a knowledge-based workforce.33Business Value Skill Set- As the focus has shifted to align IT priorities to mission capabilities, so has the thinking of the right skill mix for IT professionals. The need to integrate technology into business processes has created a greater desire for business acumen and interpersonal skills combined with expected technical skills. This will require a refinement of IT workforce skills and updating of professional development plans.

Specific IT Skills Gaps- The Federal Chief Information Officers (CIOs) Council, in partnership with the Office of Personnel Managements Human Capital Leadership and Merit Systems Accountability Division, has completed three periodic IT workforce capability assessments focused on the IT workforce. Based on the IT Workforce Capability Assessment (ITWCA) survey of 2006, four specialized job activities, enterprise architecture (EA), IT project management, IT security/information assurance, and solutions architecture, were identified as the highest importance. (The executive summary can be found atwww.cio.gov).

The Association for Federal Information Resources Managements (AFFIRM) Top Ten Challenges Survey, administered annually to Federal CIOs, identified the ability to hire and retain skilled IT professionals as their top challenge in both 2007 and 2008, while also producing similar skill gap results to the ITWCA surveys of individual federal IT employees.34,35The five top-ranked skill gaps identified by CIOs in the AFFIRM-sponsored survey in 2008 were program management, security, collaborating across organizational boundaries, EA and strategic planning. Program management, security and EA also ranked in the top five in 2007 (collaboration and strategic planning were not including in the skills survey in 2007).

The Computing Technology Industry Association identified the following global skills priorities in its Summary of Skills Gaps in the Worlds IT Workforce: A CompTIA International Research Study (www.comptia.org):36 Three most important IT skills gaps: security, general networking, and operating systems

Widest skill gap proficiency: security, firewalls, and data privacy

Area for most skill growth: radio frequency (RF) mobile and wireless technology.

Other skill growth areas of importance included web-based technologies (Web 2.0, Service-Oriented Architecture (SOA), Software-as-a-Service (SaaS), Rich Internet Applications (RIAs), Asynchronous JavaScript and XML (Ajax) techniques, and specific programming languages

THE COMING NET GENERATION EDGE

During the last 50 years, most productivity gains were realized through automation and technology integration. While software and hardware enhancements will continue to reduce IT personnel resources required for routine network administration and maintenance functions, in the future, greater productivity will require a more agile IT organization. Increasing agility requires improving the ability of people to effectively respond to the unknown or unexpected; innovating or creating new methods, processes, or products; simplifying communications and information sharing; collaborating with others to execute missions and responsibilities; and most crucial, a supporting culture that inspires imagination and innovation. The agile worker is a good fit to describe Net-Geners; their energy and perspective will bring a needed dynamic to IT organizations.

ASSESSING THE IT TALENT WAR

It would be natural to think that with unemployment figures in double digits, job vacancies would have qualified candidates lining up to fill them and that the time-to-fill jobs would be greatly reduced; however, neither of these assumptions is proving true. According to a September 2009 report by Robert Half International and CareerBuilder, managers continue to face difficulties in finding qualified applicants and the average time-to-fill job vacancies remains unchanged.37As Liz Ryan, a columnist for BusinessWeek, puts it, Now more than ever, employers need the sort of employees who can wade confidently into a messy business situation (a bollixed up database integration, a disintegrating tech-support function, or a six-months-delayed product launch) and clean it up.38And, Todd Thibodeaux, president and Chief Executive Officer of the Computing Technology Industry Association, agrees that while there are a tremendous number of IT individuals looking for work, finding those with the right qualifications remains challenging.39As the economy begins to improve, jumpstarting technology projects will be a top priority of many employers, and CIOs may be looking to improve their current understaffing.40,41The problem many managers will face is that even while they look to expand staff, current employees may see an economic upswing as an opportunity to jump ship to a new employer, especially if the economy quickly improves. This may be particularly true in those organizations that cut salaries, raises, bonuses, or training during the recession while increasing the workload of those individuals still employed.

Jennifer Deal, a Senior Research Scientist at the Center for Creative Leadership in San Diego, California, cautions that talent management strategies, targeted to generational requirements, will be critical during the economic recovery period, particularly if the nation experiences a long, slow recovery.42Additionally, generational differences, exacerbated by differing levels of economic well being, and slower turnover by Baby Boomers who choose to extend their working years, may result in increased friction in the workplace, ultimately leading to greater attrition by the Net Generation.43