The Investigation of the Controlled and the Automatic Processes Employing the Stroop Effect Experiment.

The investigation of the controlled and the automatic processes employing the Stroop effect experiment. Abstract The interference between the controlled and the automatic processes was observed in the Stroop effect type experiment using two different conditions. The original Stroop effect experiment concluded that the participants will find it more difficult to complete the reading task of the words related to colour meaning in comparison to the reading task of non-colour related words. The result of Stroop experiment supported the notion that control and automatic processes can obstruct each other in certain tasks.In the current experiment, the two conditions in reading task were modified to make them look more visually similar. The result indicated that despite of visual similarities, the automatic processes interfered with control processes due to the colour related properties of the words in Stroop condition. Introduction The large quantity of information we come across in our ev eryday life is staggering. It is very hard to understand how much of this information is taken in and how much of the information just pass by. It is up to cognitive processes to decide how much and to what extent the information is accepted for further processing.This selection process has been identified as attention. All of the above is indicating that our brain is not capable to process all the information available to us therefore attentional processes are required. Various theories were devised to clarify and explain the process of selection, such as a limited – capacity theory of Kahneman or bottleneck theory of attention by Broadbent (as cited in Edgar, 2007) However how much of this process are we aware of? Can we influence how much of the information is taken in or is it our subconscious which is in control?The attentional processes are divided between conscious – control processes and subconscious – automatic processes. Even though both processes oper ate in very different ways, they both can work simultaneously and both have their advantages and disadvantages. The control process is conscious, therefore easy to control, however it is using a large amount of the processing resources. Based on the experiments conducted by Schneider and Shiffrin (as cited in Edgar, 2007), it is assumed that automatic processed are not using up attentional resources as no conscious awareness is employed.The most famous experiment demonstrating the interference between the control and automatic processes was carried out by Stroop (1935). In the original Stroop experiment the participants were presented with a list of words printed in different coloured ink. In the first list, the words were names of colour printed in ink which never matched with the name of the colour – Stroop condition. Second list was containing a colour-neutral words. The participants were asked to read the name of the colour of the ink instead of the word itself. The findi ng was that in the colour-neutral words, the participants completed the task without difficulties.However, in the Stroop condition the participants found it more difficult as they were trying to prevent responding with the name of the colour rather than the colour of the ink. (as cited in Edgar, 2007) The experiment above is demonstrating one of the disadvantages of the automatic processes. Even though the automatic processes are not using up our precious attentional resources, they can interfere with the control processes as we are not able to just turn them off. To test this theory further a present experiment was created using both the Stroop condition model and the control condition.However, the Stroop condition was modified to include the colour-related words rather than the names of the colour. The words used were such as blood or carrot with strong relation to the certain colour. The words were printed in the colour ink not matching with the colour related to the word. Even t hough the control condition contained the non-related colour words, the words were visually very similar to the words in Stroop condition. The research hypothesis was that as in Stroop condition the participants will find it more difficult to read colour-related words. This is one-tailed hypothesis.The null hypothesis was that there wouldn’t be any difference in time taken to complete reading task of each list. Method Section Design The design employed in the experiment is a within-participants design. The independent variable was a reading task of the colour of the words printed on the list provided. The independent variable had two conditions, the Stroop condition and control condition. The Stroop condition contained the colour-related words printed in incompatible colour ink with the word and the control condition contained non-colour related words printed in various colour inks.The word list in the Stroop condition had 5 words repeatedly printed in incompatible ink with t he word. The words in the control list were matched to the word list in Stroop condition to contain the exact same number of letters of each matched word. The word order and well as the colour order was matched exactly in the both lists. The dependent variable was the time measure to complete the reading task of each list. The measurement was complete in seconds by the researcher using a stopwatch and it was recorded to the nearest second. The participants were given the task individually in order to limit any confounding variables.Participants The twenty participants joined in this experiment were current students at the Open University and their friends and family members. The age of the participants ranged from 18 to 69 and there were 12 females and 8 male participants. Materials The two visual stimuli were presented to each participant on A4 sheet paper in colour containing 30 words divided into two columns of 15 words. A stimuli for the Stroop condition contained 5 colours-rela ted words printed in incompatible ink with the word. The six colours used were red, yellow, green, orange, purple and blue.The words used in the Stroop condition were blood, lemon, grass, carrot, plum, sky. A stimuli for the control condition contained exact same number of word and same colours were used. The words matched with the Stroop condition. The words used have the exact same number of letters, they stared with the same first letters and they visually resembled the words in the Stroop condition. The words used in the control condition were blame, ledge, grade, carrer, plan, sty. Each word was repeated 6 times on each sheet. Both lists are included in Appendix 1.The standard instruction (included in Appendix 2) printed on A4 paper were read to the participants. The consent form (included in Appendix 3) was supplied to participants to sign. The data were recorded to the nearest second and logged on the response sheet. A stopwatch was employed to record reading time accurately. Procedure Each participant was approached and asked if they will be willing to take part in a cognitive psychology experiment with a focus on controlled and automatic processing of information. All participants were explained a basic of the experiment and asked to sign a consent form.All participants were tested individually. The age and sex of the participants were recorded prior to the start of the experiment. The full instructions were read to the participants and it was made sure that it was clear before proceeding. (Appendix 2: Instructions) All participants received the same instruction. Both lists were presented as A4 print out in coloured ink. Both lists were presented separately to the participants, only few seconds before asking the participant to read the colour of the words aloud. The first list to read was the Stroop condition list followed by a control condition list.With every other participants the order of the presentation of the list was switched around. Full expe riment took approximately minutes with each participant. The reading of each condition was recorded separately using an accurate stopwatch. The results were recorded on the response sheet. After the experiment the participants were informed about the hypothesis of experiment and explained the differences between the both conditions. Result The research hypothesis in this experiment was that participants will take longer to complete the Stroop condition.The time to read through the full list of each condition individually was recorded to the nearest second. As Table 1 is indicated, the mean response time of Stroop condition is 2. 65 seconds slower than the mean response in the control condition. The paired sample t-test was carried out using these data obtaining following result. The difference between these conditions is statically significant (t(19)=3. 933, p=0. 002, d=0. 44) Based on the information above the null hypothesis was rejected and the experimental hypothesis accepted. T able 1Mean and standard deviation of response time in secondsConditionMean response time (In seconds)Standard deviation Experiment (Stroop) condition23. 606. 533 Control condition 20. 955. 520 Discussion The result of the experiment above proved that despite of using colour-related words, rather than the name of the colour as per original Stroop experiment, the findings were similar. The participants found it more difficult to read the colour-related words printed in colour which didn’t match the visual perception of the certain word. The participants tried to avoid reading the colour of the word associated with particular word therefore this reading task took longer.Even though, the neutral words looked visual similar, and they were recorded in exact same colour order, the participants completed this reading task more quickly due to the lack of the meaning of the words and no relation to the specific colour. Therefore, in the control condition, only automatic processes were activated and there was no interference with the control processes and as a result the participants found this task easier. The control and automatic processes can interfere with each other doing certain tasks. Specifically, the automatic process of reading was interfering with controlled process of naming the colour of the ink.Nevertheless, the current experiment was conducted with only twenty participants. There is a possibility that if the experiment was conducted with much bigger sample the results may not be as conclusive. Especially , as further experiments indicated, the automatic processes can be influenced by individual strategies. To imply this notion to the Stroop experiment, it has been found that just by focusing on the first letter of each word, the automatic processes – the Stroop effect can be reduced. (as cited in Edgar, 2007) This would imply that automatic processes are not completely free and unconscious as previously suggested.In addition, the automatic a nd controlled processes are not completely fixed. For example, reading was controlled process before it was learned and became control process. This observation suggests that the relationship between the controlled and automatic processes is on continuum and can evolve with time. Gopher (1993) proposes that attentional skill can be learned to a certain extent depending on the situation or internal motivation. (as cited in Edgar, 2007) In conclusion, the result of the experiment is supporting the notion that the control processes can interfere with the automatic processes when trying to complete certain tasks.However, further experiments in this specific field would have to be conducted to determine the full extent of automatic responses and their relation to the control processes. References Edgard, G. (2007) Perception and attention, In D. Miell, A. Phoenix, & K. Thomas (Eds. ), Mapping Psychology (2nd ed. , pp. 3-50). Milton Keynes: The Open University Appendices: Appendix 1: Word lists containing experimental and control condition (not included) Appendix 2: Instructions (not included) Appendix 3: Consent Form (not included) Appendix 4: Raw data Appendix 5: SPSS print-out of t-test

All about Interest Groups, Political Parties, and Nominations and Campaigns

The American system of election is very expensive, time consuming and tedious to the aspiring presidential candidates. The length of the process determines the prosperity of a candidate from any political party. Although this time range favors some candidates its complexity and cost disqualifies other candidates.Since not all top party leaders are interested in the presidency, the aspiring candidates have to meticulously orchestrate their announcement of candidature to capture the public while at the same time win the approval and loyalty of their leaders. This occurs during the caucuses and primaries in which starts the road to the White House as argued by (Lader, 2006).This system has flaws for states like Iowa that still relies on caucuses. The suitable candidate can easily be locked out of the race early if they lack popularity with the party heads.The numerous questions and hole punching that is involved in these levels can easily elevate or disqualify a candidate depending on t heir eloquence, smartness or simply their political correctness at that particular time.The highly televised primaries on the other hand have rather seen luminaries in larger states like New York and California succeed. Celebrity entertainers have recently been used to rally support for candidates during such primaries. Such trends show modern day success stories for democracy.The future of election currently relies on modern day technology and chat rooms that are famous especially with the youthful population. Showbiz and technology such as Facebook and Twitter are the next level of campaign strategies since they have the most audience of the voting population. Campaign themes also have credited to the success or failure of modern day candidates.2. Political Parties.The growth of democracy in the U.S is credited to the evolution of political parties and their strong affiliations to the public. The political parties have fashioned themselves around the figure of the president for ad ministrative and political influences.Although this is fashioned to enable uniqueness of voice and solidarity in opinions, it has alienated the public from decision making compared to their British counterparts. This brings about personal political ambitions to the parties, where presidents only push their aspirations while sidelining the shared collective responsibility for the entire nation and the political parties.The problem is that the public has no say in decision making since the president does not have to consult the Congress in decision making. The failed link between the people and their presidents thus causes dissatisfaction and polarization.3. The Interest Groups.In light of the common good of the American society, the power of the interest groups can only be sustained to its least degree possible. If not, their extremism of expression tends to only favor the thought of certain groups and alienate other groups. These groups are small; the allegiance to any of these grou ps automatically paralyses the success of a presidential candidate.These interest groups have drawn allies in the mainstream political parties thus dividing the country in lines of opinion and policies. The strong constitutional structure silenced these groups yet the concept of pluralism enhances cooperation while reducing polarization of the country. This maintains freedom, versatility and balance of political power.4. Conclusion.The systems of election and campaign in the primaries and the caucuses are truly beneficial to ensure transparency. Unfortunately, the tedious nature of this journey can be reviewed by the use of technology and inclusion of pluralism that favors the power balance. The American population should therefore be encouraged to embrace chat room groups and pluralism to motivate the growth of their democracy.ReferenceLader, C. (2006). How to prepare for the AP U.S. Government & Politics Barron’s How to prepare for the AP US Government and Politics Advanced   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Placement Examination. Barron's AP Unites States Government & Politics (4th   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   ed). New York: Barron's Educational Series.

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Alcohol Consumption Problems - Personal Statement Example However, at that time the enjoyable moments made me forget the possible after effects of such an action. Not realizing its harm, I continued using it as my companion in the moments of happiness and distress, joy and grief but afterwards it resulted in a notable change on my academic record and daily life. I, being intoxicated for most of my time, became unable to concentrate on my studies. This was not the end of problems but just a start. This addiction led me to misbehave with my parents and siblings. I didn't have control on my behaviors. My social circle was shortened due to my irregular and rude behavior. Due to a limited circle of friends and isolation I got mentally disturbed. It was no more fun having those alcoholic drinks but a compulsion as I felt that I had no other option to pass my time and overcome my mental depression. However, it was my wrong thinking that alcohol consumption may help me in reducing my mental distress. Drugs, cigarettes and alcohol are not the solution of any problem, but are the reason of upcoming health and psychological problems. Alcohol consumption also weakened me financially as I used to spend most of my time under the influence of those drinks and hence had no awareness of what a normal person must do.

Shame by. Dick Gregory and the Professor is a Dropout'' by. Beth Assignment

Shame by. Dick Gregory and the Professor is a Dropout'' by. Beth Jonhson - Assignment Example as an encouragement account, which relays young girl’s chronicle that based on the author learnt to read by the aid of her grandfather from childhood (Johnson). This culture of reading would later lay a foundation for her when everyone thought she was retarded thus unable to read. The love for her children and desire to see them succeed in life pushed to go back and improve her English. This account demonstrates that, with motivation and reading skill, anyone can drive his life to great success. From Shame, Richard was from a poor background and attracted to her classmate Helene Tucker (Gregory). The respect he felt for her greatly motivated her continually go to school despite numerous hardships he then experienced. His determination’s was evident by unequaled willingness in continually attempting to please through emulating her cleanliness even though he had only one pair of cloths. He would even brush his hair, which clearly shows that through admiration and respect to the people we look up to we, can change positively and strive ahead. Richard shame was for having no dad, being in the relief program and for being poor. This was worsened by his teacher’s comments that he had no dad while the whole class was listening. The teacher’s irresponsibility of not caring to find out why he was not concentrating in class but just termed him as stupid made the situation even more worse. This clearly shows how some people teach others to feel shameful through their words. This shameful feeling made Richards to lack the motivation he initially had to go to school. Contrary to this, the professor is a dropout is a story of encouragement where Quadalupe Quintanilla strived to be successful in life even when people termed as retarded. When we are motivated to give a little push in life we can achieve whatever we want. Her motivation was her children and with the skills for reading she acquired at a young age really helped her a lot. Hard work is yet another aspect

Leadership + Economics of Regulation + Ethics and Organizational Essay

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The MacLeod Report (2009) claims that engagement strategies are Essay - 1

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Hakkasan Restaurant Company Assignment Example | Topics and Well Written Essays - 1500 words

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Essay on Typical Cell Example | Topics and Well Written Essays - 1250 words

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Bpo Attrition- the Problem and Its Solution Essay Example for Free

Bpo Attrition- the Problem and Its Solution Essay Human Resources In Indian Business Process Outsourcing Organizations- Attrition. Is there any solution? Business Process Outsourcing (BPO) is likely to be the next big thing for services in this decade. The industry is very diverse, with several sub-segments, each displaying its own unique characteristics. The BPO players need to be excellent in every facet of operations as the market is highly competitive at every level and re-defining itself every day. Being a People-Centric industry what are the people issues that, the HR will have to handle? What are the challenges faced by HR in dealing with them? HI Before this, one needs to gain an understanding about BPOs and what businesses are Indian companies doing in this segment? BPO is based on the premise that whatever competencies are not very important for an organization   (not their core competencies); outsource or ask somebody else who is adept at doing it, to do it for the organization. In this way the organization can concentrate on its core competencies and not worry about on trivial issues, which are not strategic in nature. But these days we even find organizations outsourcing their core competencies or the core business aspects to BPOs to gain the advantage of cost cutting and quality issues. Typically, BPO would include call centers, problem solving in insurance sector to other sophisticated activities like research and other back office dealings. India has the advantage of low cost, highly qualified English speaking labour, thus most of the BPO ventures in India are call centers, although of late, companies are entering into high-end areas like research. But for sometime at least we can assume that most of the companies would be doing the call center kind of business. Most of these kinds of jobs get done in the night in India to account for the 12-hour time lag between US and India. Over a period of time the biological rhythm of the employee changes, causing various kind of disorders like indigestion, fatigue, headaches etc. so the health of the employee is a major concern for the HR, more so because most of them are graduates in their early twenties. In addition the jobs are monotonous, often nerve wracking. So it is a challenge for HR to adequately rotate the jobs of employees and provide them with enough time to refresh, so that they are able to deliver service of highest quality. Although many companies are targeting fresh graduates, they are not able to retain them. Attrition continues to be high 35%. HR has to ensure that a proper career path is chalked out so that graduates increasingly see this area as a potential career for them. Clients in US, UK and other European Countries are very quality conscious and as increasingly complex jobs get outsourced, it becomes important that HR ensures right quality people are selected and the right quality of training is provided to them. This ensures that later they do not face embarrassing time from their clients. There has been enormous requirement in this sector for manpower and huge salaries are up for taking. The times are good for this industry, but one has to keep in mind that this industry is still in its way to figure out in the growth stage. One cannot predict the future so easily and the sour experience of software companies is still fresh in minds. So a little bit of caution is to be exercised in this matter and proper trends have to be forecast by the HR to ensure that they do not go the software way when ultimately the industry stabilizes. Attrition †¦ A major problem rocking the Industry. Some Facts to Ponder about†¦ * 95% companies in the industry have Attrition problems * The small-sized and medium-sized companies loose more people * Turnover rates are as high as 30% in some reputed BPOs and over all around 35% in the Industry. Employees move to smaller companies for exciting opportunities and greater identity and move to large companies for defined roles, clearer career paths and better HR systems. Loyalty towards their employer or towards the organization has slowly seems to have disappeared. Executives know that fast-moving markets require fast-moving organizations that are continually refreshed with new talent, and they have become quite adept to outside hiring. Even companies are quite comfortable with bringing in talent; they remain distinctly uncomfortable about seeing talent leave. The competition to headhunt employees with good performance ratings of other organizations is an open ploy. The mediators (so called Consultants) make this job easy for the organizations by gaining the data bases of employees and they lure the employees by offering huge pay packages finally making them to move from their job. One of the biggest assets of the BPO Industry is manpower. So, the biggest challenge in this industry is to attract and retain knowledgeable manpower. Today, BPO companies are facing a shortage of knowledge workers because the rate at which they lose employees is almost ouble the rate at which they hire. A major proportion of the turnover issue is attributed to the movement of manpower to the Companies who lure them by offering either better pay or higher designation. 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The Impacts Of The Industrial Revolution In England History Essay

The Impacts Of The Industrial Revolution In England History Essay The Industrial Revolution is sometimes criticized for the negative impacts it brought to the society. However, it is a very interesting, and an undeniable fact that the revolution actually prevented the Malthusian Catastrophe, which could have affected England severely, through starvation, poverty, and diseases. This essay evaluates how, and in what ways England had been affected by the Industrial Revolution both negatively and positively. Most importantly, the research will focus on the ways in which the Industrial Revolution may have prevented the Malthusian Catastrophe in England. This essay, however, will not assess the impacts of the Industrial Revolution in any other countries, nor will it assess factors other than the Agricultural Revolution, efficiently produced goods, and the Enclosure Movement. The most important variables considered will be Englands societal and economic conditions before the revolution began, and how they changed after the revolution was progressed. Causes of the Industrial Revolution, the progress it made, and the negative social, or political impacts brought about in England will also be considered to evaluate the research question. Although the three factors played important roles in preventing the Malthusian Catastrophe, which could have brought disastrous impacts to the British society, they also bought negative impacts on the society, providing poor working conditions, and taking rights form the farmers This problems will further be evaluated in the actual essay. Contents Introduction à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦.à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦4 Industrial Revolution Efficiently Produced Goods à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦. 6 Agricultural Revolution à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦..à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦.10 The Enclosure Movement à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦.à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦.à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦..à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦.. 14 Conclusion à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦.à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦18 Works Cited à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦..à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦ 19 Industrial Revolution: The Impacts of the Industrial Revolution in England on the Malthusian Catastrophe Introduction In a state therefore of great equality and virtue, where pure and simple manners prevailed, the increase of the human species would evidently be much greater than any increase that has been hitherto known In 1798, Thomas Robert Malthus published an essay on the principle of population, describing the increasing number of human populations in the 18th century. In his essay, he came out with two postulates: one, food is necessary for human survival, and two, passion between the sexes will not go away. Along with the two postulates, Thomas Malthus undoubtedly declared that subsistence limits population level, since subsistence decreases while population increases (Thomas) and that this would affect the larger socio cultural system in terms of misery, vice, diseases and poverty. Malthus further augmented his idea through carrying capacity theory, noting that populations as a whole tend to grow exponentially or geometrically, whereas natural resources grow arithmetically if they grow at a ll. When a population reaches beyond the amount of resources available to its survival, it has reached its carrying capacity. When a population reaches its carrying capacity, a number of limiting factors such as disease or famine, can occur to bring population down and back to naturally acceptable limits.(Strachan) However, as a result of the Industrial Revolution in the eighteenth century, his prediction towards Europe didnt take place. The first Industrial Revolution, which proceeded throughout the decades, began in Britain for a greater economic specialization, and to bring an economic shift through changes in industry. Before the introduction of the Industrial Revolution, there was a great social inequality among the populace in Britain (Hooker). Land was processed mostly by wealthy people, while lower class people struggled to survive, dying with malnourishment and diseases. Besides, there was a countless land of farms, while Britain possessed no real factories. However, follow ing the introduction of the Industrial Revolution, new factories were opened, more jobs were created, and wages rose (Kreis). Most importantly, it stopped the Malthusian Catastrophe, which could have brought devastating impacts on Britain. Three factors might have played significant roles in stopping the catastrophe, which are: Efficiently produced goods, Agricultural revolution, and the Enclosure Movement. Industrial Revolution: Efficiently Produced Goods The Industrial Revolution, which began in the eighteenth century in Britain, is well acknowledged for the mechanization of production systems. In earlier centuries, the focus was how to produce more used in the modern has changed everything (Kreis). Before the introduction of the Industrial Revolution, Britain was a country where men worked from dawn to dark and the laborer lived not in the sun, but in the poverty. In factories, production was merely dependent on laborers; hence it took a large amount of money and time, without productions being made promptly. In addition, many people worked at home in rural areas while a few worked in shops and in towns (Margaret). On the other hand, the industrial bourgeoisie was eager for higher profits, lower costs, and accelerated production, and they sought alternatives to improve the production of goods. In account of these reasons, machines and new inventions were considered outstanding for everyday use. The Industrial Revolution began with n ew machines. Within the relatively narrow confines of production technology in a number of industries, more numerous, and more radical inventions, including the telephone and assembly line, occurred during the Industrial Revolution than ever before in so short a period, and the Industrial Revolution eventually took manufacturing out of the home and workshop (Margaret). The machines and new inventions that ameliorated the efficiency in producing goods were wide ranging, from a shuttle to an engine. Along with these machines, many factories were able to accelerate production, with lower costs. For instance in 1785, Edmond Cartwright, an English inventor, invented what he called a power loom, after he was inspired by what he saw in a factory, owned by Richard Arkwright (Kreis). The machine, although at first stage, performed poorly with mechanical breakdowns, helped factories improve the speed and quality of weaving after being modified several times. Another example that had presented a great efficiency during the Industrial Revolution in Britain was the Steam Engine, which the first reliable one was developed by James Watt (Patricia). Steam engines were the power being locomotives and ships, which provided a faster source of transportation to bring raw materials to factories and to bring finished products to market. Both these machines were used var iedly in different factories and mines in Britain, as they helped to accelerate production, while having to spend less money and time. It was clear that the new inventions and machines during the Industrial Revolution created an enormous increase in the production of many kinds of goods. The underground movement of coal was speeded up by the utilization of ponies and carts on rail, and the production of coal increased steadily, from two and a half million to more than fifteen million tons by 1829 (Kreis). The flying shuttle, which was invented in 1738, rendered the old process of carrying the weft through the threads of the warp obsolete and enabled the weaver to double output (Patricia). The textile industry marked a great change after the introduction of new inventions, due to transformed methods of making textiles after the introduction of new inventions. Starting from 1831, the British industrial production was doubled, and in 1852, the industrial production doubled again, marking up to 3.3 per capita (Mokyr). The evidence is that the discovery of basic principles of machine design, their application to large or small-scale industrial production and the creation of efficient managerial techniques were all independent of the creation of the factory system by nineteenth-century capitalist. The application of machine design to such industries as spinning and weaving in seventeenth and eighteenth centuries often resulted in inventions suited to the circumstances of petty producers: The new machines required little capita and a family sized labor force, and hence were well suited to the perpetuation of Britain industry (Sabel, 1982, p. 39) At any rate, the efficiently produced goods played a principal role in stopping the Malthusian Catastrophe. It is to be noted that the Malthusian Catastrophe was said to be a return to subsistence level conditions as a result of economic being eventually outstripped by growth in population. The industrial revolution was the driving force behind social change in Britain, and changed nearly all aspects of life through new inventions and spawned a new economy (Clark). As a result of many new inventions such as the steam engine, locomotive and powered looms, production and transportation of goods radically changed. Furthermore, with new mechanized machinery, factories could be built and the factories used to mass produce goods at a rate that human labor could never achieve. Machinery replaced some human crafts; coal replaced humans and animals as the source of power to run machines; and the centralized factory system replaced the distributed, home-centered system of production (Rutherfor d Ahlgren, 1990, p. 151). Machinery and inventions invented toward the manufacturing companies clearly replaced the distributed, home centered system of production, and they eventually improved the production as well as economy in Britain. The population in Britain increased, which meant the resources had to be divided among a greater number of people, keeping the standards of living at subsistence levels (Jegede). The rapidly growing population and sustainability of economy worried Thomas Malthus, resulting in him introducing the theory of the Malthusian Catastrophe. However, following the newly invented mechanism, and efficiently produced goods, the Malthusian Catastrophe could have been stopped. The machines during the industrial Revolution did more during the 1800s to raise peoples standard of living than all the actions of legislatures and trade unions. Despite of its economic improvement, and the great increase in production of goods, therere also some negative interpretations toward the new machines invented during the same period of time. Some historians have stressed the negative parts of the machines, as they pointed to the overcrowded and unsanitary housing and the terrible working conditions such as low wage, created by rapid industrialization in the cities (Patricia). Child labor and precarious factory machines were also pointed out. In Britain, nearly half of the work force in the textile industry in 1833 was under the age of 16. In many cases, the employment of children was quite extensive and the conditions, hours and treatment appalling by twentieth century standards (Tuttle). Many interpretations are taken toward the acts of the industrial revolution. While some historians disparage the industrial revolution due to the negative impacts it brought to the society, some historians see it justifiable due to the fact that Britain had achieved a great progress in industry throughout the Industrial Revolution. Machinery that was invented for convenience brings about the transform in the entire humane history. Britain, which once was a rural and agricultural society, changed to an urban and industrial society throughout mechanism. The Industrial Revolution brought many material benefits that still remain established in the modern world. Britain became the central power in world trade after the revolution, as one suggested the next colony of Britain would be the universe. And these facts, allowed Britain stop the Malthusian Catastrophe. Industrial Revolution: Agricultural Revolution The Industrial Revolution, which began in the eighteenth century in Britain, also led to the Agricultural Revolution, which saw a massive increase in agricultural productivity and net output. The Great Britain was based on agriculture, and rural lives. Despite the great gains in industry throughout mechanism, agriculture remained the nations basic occupation, and therefore, enclosure movement, mechanization, four-field crop rotation and selective breeding were used to improve the agriculture (Gay). Agricultural Revolution is another major factor why the Industrial Revolution could bring to an end of the Malthusian Catastrophe. In Britain, before the Industrial Revolution was introduced, food was produced locally, and agriculture could provide for but a few large commercial towns. Somewhere around seventy five percent of the British population made their money farming, but in the winter, they couldnt farm, while in a mean time, farmers had to plow and plant by their own hands. Through out the 18th century, landowners became increasingly interested in finding new ways of farming, as ways of increasing the food supply had to be found due to the increasing population (Gay). Therefore numerous methods for farming were introduced during the Industrial Revolution, which eventually led to the Agricultural Revolution. With the start of the Agricultural Revolution, agriculture and farming families changed, and there occurred massive production in agriculture, including crops and grains. The machines and new techniques that ameliorated the efficiency in farming in agriculture were wide ranging, from breeding to machine. Along with these techniques and machines, many farmers were able to accelerate agricultural production, without having to spend a long time. For instance in 1730, Joseph Foljambe came out with an invention, called the Rotherham plough, the first iron plough to have any commercial success (Kennedy). The machine, which was made of iron and mould board and share, was covered with an iron plate that made it lighter to pull and more controllable than the previous ploughs (Alan). The machine, during the Industrial Revolution, was usually used to turn the soil more effectively with less draft, wear, or strain on the ploughing team, which helped farmers with farming (Kennedy). Another example that provided the efficiency in farming in agriculture was a technique called the three field crop rotation, which Charles Townshend brought to Great Britain after learn ing it from Flanders (Billet). During the middle Ages, the Great Britain had employed a three year crop rotation, in which different crops are placed in each of two fields. Over the following two centuries, the regular planting of legume in the fields, which were uncultivated gradually increased the fertility, and the planting of legumes helped the farming to increase plant growth in the empty field due to their ability to fix nitrogen in the soil (Harskamp) This technique was used as farmers could grow more livestock because there was more food of higher quality. In addition the manure was used as an excellent fertilizer, as it could produce productive crops. Both these techniques were brought during the Industrial Revolution, and helped the farmers grow more livestock that is in higher quality. At any rate, the Agricultural Revolution, followed by a wide-ranging of mechanics and techniques invented during the Industrial Revolution, played a principal role in stopping the Malthusian Catastrophe. Many historians note that the Malthusian Catastrophe referred a return to subsistence level conditions as a result of agricultural production being eventually outstripped by growth in population. Thomas Malthus argued that the unprecedented population growth will outpace the agricultural revolution, and this will result in deaths through starvation and hunger (Thomas). However, it did not happen. The industrial revolution was the driving force behind social change in Britain, especially the rural lives. New inventions and new technologies had changed the ways of farming, and helped the farmers grow more livestock. The agricultural productivity of Britain grew significantly in the period of the agricultural revolution, that it was estimated that the productivity of wheat was about nin eteen bushels per acre in 1720, and that it had grown to twenty one to twenty two bushels in the middle of the eighteenth century (Turner). Although there still was an increase in population, the introduction of the agricultural revolution, followed by the industrial revolution allowed the population growth to be sustained, and the Malthusian Catastrophe didnt occur. The machines and techniques during the Industrial Revolution did more during the 1800s to raise peoples standard of living in farm lands than all the actions of legislatures and trade unions. The machines and techniques used during the industrial revolution, although played a lot of necessary roles in increasing the agricultural production, have negative interpretations as well. Some historians argue that the agricultural revolution was harmful to some of the farmers as the enclosure movement kicked many traditional farmers off the community owned land they had used, putting them out of work (Snooks). Second, with fewer people needed to grow more food, other farm workers were put out of work. More importantly, the population of Britain rose relatively quickly that the population in 1750 reached the level of 7.7 million. Poorly managed farms and ranches were also problems that they contributed to pollution through pesticide abuse and emission violations (Snooks). There occurred soil e rosion through lack of proper stewardship and animal cruelty through ignorant or willful mistreatment of animals. Despite of the negative interpretations toward the machinery in factories, the fact that Britain had achieved a great progress in farming, and farming production throughout the Industrial Revolution is not deniable. Machinery and techniques that were invented or brought for convenience brought about the transform in the entire Britain agriculture. Britain, although was changed to an urban and industrial society throughout mechanism, its agriculture still remained the nations basic occupation, and Britain tried to improve the techniques under the basis of improvements in industrial machines. The Industrial Revolution brought many material benefits that still remain established in the modern world. Undergoing the industrial and agricultural revolution, Britain could be the central power both as a rural, and an urban country. This is important because the Malthusian Catastrophe concerned about the food production being outstripped by the increasing number of population. As the food prod uction increased following the newly introduced techniques and inventions, Britain could avoid such a catastrophe. Industrial Revolution: The Enclosure Movement Britain was based on agriculture, and rural lives. Food was produced locally, and agriculture could provide for but a few large commercial towns. (Industrial) In addition, Most of the British population made their money through farming. However, land owners became interested in the new way of farming, which would increase the productivity. Before the introduction of the Industrial Revolution, there occurred an Enclosure Movement in the 18th century, which revolutionized the landscape of rural Britain (More). As a result of the enclosure movement, instead of communal exploitation of land, property could be managed privately (More). The community in a typical English farmer society was no longer in charge of land, and there was no longer a loose and lax policy on the occupation of land (agricultural). It was after the Industrial Revolution, when the process of enclosure was most apparent. Numerous acts and bills were signed by the English parliament for separate and different parts of land, and the movement revolutionized economic activity by isolating and organizing different farms (Agricultural). Also, its ability of better rising of crops and animals made the enclosure movement become so popular that Trim hedges and compact fields have, for the most part, replaced the wide commons and the scattered, intermixed strips of the old husbandry once practiced over a large part of Britain (Gay). The Enclosure movement was not merely an alteration of agricultural technique, nor was it, on the other hand, a series of spasmodic, cataclysmal upheavals, overwhelming an unfortunate peasantry with each successive convulsion (Gay). The Enclosure Movement played countless important roles in stopping the Malthusian Catastrophe. One most important role was that it improved the agricultural production. In order for landlords to make the most efficient use of the land, they had to manage the field as they saw fit. This was, of course, impossible under the three field system (System of agricultural cultivation in Western Europe; included one-third in spring grains, one-third fallow) (Agricultural), which had dominated English agriculture from the 9th century. Since farmers, small and large, held their property in long strips, they had to follow the same rules of cultivation. The local parish or village determined what ought to be planted. In the end, the open field system of crop rotation was an obstacle to increased agricultural productivity. The solution was to enclose the land, and this meant enclosing entire villages. Landlords, by petition to Parliament, started enclosure, and in the 19th century, more than 900 acts of enclosure were passed (agricultural). The enclosure movement could prevent the Malthusian Catastrophe as it ultimately contributed to an increased agricultural surplus, necessary to feed a population that would double in the 19th century. Another important role it played was the mobility of the workers. The Enclosure Movement, although was indirect, and roundabout, also contributed in improving the British economy. The enclosure movement dramatically changed the English way of life, leading to the enormous economic upheavals that had a profound influence on the modern society. As a result of the enclosure movement, many peasants and working class people were forced to move to the cities, where they could get jobs. Consequently, large numbers of people left rural areas to move into the cities, where they became laborers in the factories during the Industrial Revolution (More). In the cities, they played as factory workers, being engaged in increasing the industrial production s. In fact, the Malthusian Catastrophe referred a return to subsistence level conditions as a result of agricultural production and economy being outstripped by growth in population (Thomas). Thomas Malthus argued that the unprecedented population growth will outpace the agricultural revolution, and this will result in deaths through starvation and hunger. However, it did not happen. The enclosure movement was the driving force behind social and economic changes in Britain, especially the rural lives. By revolutionizing the landscape, and also by appropriate public land for a private benefit, Britain could make a huge improvement in increasing both the agricultural and economic productivity. The agricultural productivity of Britain grew significantly in the period of the enclosure movement, and had also made Britain, a center of the world economy. Although there still was an increase in population, the introduction of the enclosure movement, followed by the industrial revolution allowed the population growth to be sustained, and the Malthusian Catastrophe didnt occur. Despite the fact that the enclosure movement played lots of important roles in increasing the agricultural production, and improving the British economy, therere also some negative interpretations toward the movement. Historians often go against the need of introducing the Enclosure Movement for two main reasons; one, it kicked many traditional farmers off from the community owned land they had used, putting them out of work in the cities (Snooks). Second, as the result of the population growth in cities, poor people lived in very small houses in cramped streets, while homes shared toilet facilities, and open sewers (Tuttle). Furthermore, disease was spread through a contaminated water supply. Third, peasants, and lower class people, who lost their land to work on, moved to towns, where all families had to work (Tuttle). Therefore, even children had to work in factories under poor working conditions. Although there are some negative aspects toward the Enclosure Movement, the fact that Britain had achieved a great progress in agricultural productivity and economy could prevent Britain from the Malthusian Catastrophe. By revolutionizing the landscape, Britain enjoyed the increasing amount of agricultural production that could support the increasing number of population. Moreover, the facts that farmers and low class people moved to the towns made British economy increase. The Industrial Revolution brought many material benefits that still remain established in the modern world. Undergoing the industrial and agricultural revolution, Britain could be the central power both as a rural, and an urban country, which in fact, allowed Britain to prevent the Malthusian Catastrophe. Conclusion The Industrial Revolution was a great shift in the eighteenth century in Britain. When Thomas Malthus, a well known economist, came out with the theory, about the agriculture and economics being outstripped by increasing number of population, many people in Britain were worried about the growth rate of population. The introduction of the Malthusian Catastrophe meant the introduction of a tremendous disasters, which include diseases, misery, vice and poverty. The fierce was heightened when the capacity theory, which was concerned with the idea of resources becoming limited, reducing the populations rate of growth, was introduced, resulting in a large populace trying to find a way that could stop the catastrophe. However, the Industrial Revolution opened a new road, not only for Britain, but also for the world, with a concept of introducing new machines, techniques, and a movement to the agricultural based country. Although the Industrial Revolution is often harshly criticized for the negative outputs they brought, such as pollution, poor working conditions, and taking up of rights, it was the Industrial Revolution that could have prevented Britain from the Malthusian Catastrophe. Britain, by going through the Industrial Revolution, changed from a rural and agricultural society, to an urban and industrial society. As agricultural revolution was introduced, the efficiency in farming was ameliorated. Also, it became one of the most powerful countries in the world with its massive increase in agricultural productivity, and economy. Although some historians argue that the whole Industrial Revolution was not justifiable, the Industrial Revolution resulted in efficiently produced goods, agricultural revolution, and the enclosure movement, which eventually prevented Britain from the Malthusian Catastrophe.

Analysis of the European Transportation Industry

Analysis of the European Transportation Industry Abstract The European transportation industry has been evolving for the last century but the pace of change accelerated in the recent years with the deregulation and intensification of competition between different modes of transport. The new agenda of the European Commission for the future of the industry after 2010 comprises of policies that try to establish sustainable transport that will meet the challenges of the current market environment the growing concern on gas emission, lack of funding as a result of the financial crisis, increasing oil prices and aging population in continental Europe. This paper analyses the current situation in the transport industry in Europe and the expected change in the competition between different modes with particular focus on the rail and road passenger transportation as a result of the policies for creating a fully integrated European transport network. Using the scenario analysis three possible outcomes have been identified as a result of the anticipated developments in regulations as well as feasibility of implementing those measures. Most reasonable of the three scenarios is the one where implementation will be taking place with mixed rigor in different member states, in addition the expected shift in passenger transport from road to rail will commence but at relatively slow pace. The result of the successful implementation of the new regulatory developments will be increased competitiveness between rail operators as new entrants will come to the market, increased efficiencies in the ex-monopolistic companies, and better service for the end-consumer both quality and price. The above scenarios provide a long-term perspective on the development of the intermodal competition in the passenger transport in Europe, since the time horizon for assessing the effect of a particular regulatory takes at least 10 years. The starting point is the current situation on the market which unfortunately has to go a significant change before the head-to-head competition between rail and road starts. The implications from the current study can be used as the basis for future research and scenario development with more sophistication. Regulations will definitely be in the core of transport industry development and the future trends as discussed in Chapter 3 will influence those policies with different degree. It is worth trying to understand and better prepare for the future both from business and social perspective. Thus the current study tries to bring the reader one step closer to that point. 1. Introduction Transport network is considered the backbone of the economy. It is a complex system that is influenced by multiple variables like population consumption, settlement patterns, organization of the production processes and the capacity of the infrastructure. As a major sector of the European economy transport has a top priority in the strategic agenda for building the single European Union market. The history of the sector is characterized with the key features of network industries natural monopolies, vertically integrated players, heavy investments in infrastructure, public subsidies, regulated prices. The globalization of economic activities and the gradual liberalization of the transport market, had led to changes in the business dynamics and structure of the sector. The environmental impact of transport became a priority in the development of policies and regulations for the industry. One push in the direction of more environmentally sustainable solutions is seen in promoting rail transport as a substitute for road transportation. The existing literature gives strong case in support for this scenario. This paper tries to explore the future scenarios in Europe and analyze the expected effect from the introduction of the new transport policy on the intermodal competition of passenger transport between rail and road. Chapter 2 presents the basic characteristics, development trends and economics in the network industries. Giving a starting point for understanding what has shaped the transport industry so far. In Chapter 3 are discussed the trends and challenges in the development and implementation of regulations in the transport industry in Europe. The focus here is on to rail and road passenger transport and the existing intermodal competition between the two modes. The following Chapter 4 includes analysis of the current competitive landscape of passenger transport in Europe. The market subject to analysis is defined as â€Å"transportation of passengers in the geographical boundaries of Europe† and it does explicitly exclude the transportation of freight which is characterized with different product/service specifications. The players who compete in this market are assumed to be only the providers of land transport rail and road operators. In addition the road mode comprises of bus and coach, while the rail mode includes railways, metro and tram. The purpose of the analysis is to give possible answers to the questions: Is rail the future transportation mode for passengers in Europe? Are regulatory policies the main tool for introducing intermodal competition? As a tool for conducting the analysis is used the traditional Porters five forces framework with a main focus on the barriers of entry representing the main competition force looking from the current market perspective into future scenarios. Using the results of the competitive advantage/disadvantage of each mode further scenario building is conducted applying a framework on industry scenarios and competitive strategy under uncertainty (Michal Porter). The results of the scenario analysis are taken in light of potential recommendations to both regulatory bodies and the providers of land passenger transport in Europe. Finally the conclusions derived are summarized in Chapter 5, including the possible implications, future research areas and limitations of the current study. 2. Characteristics of network industries One of the simplest ways to describe a network industry is by picturing good or services delivered through a set network both physical and virtual to an end customer. The network is established through the connection of numerous nodes which subsequently define the character of commerce in the industry. What is common in these types of industries is that the infrastructure which is comprised of many different elements links upstream supply units with the customers who are downstream. The basic components of a typical network industry comprise of: 2.1. Common structure in the network industries Although the industry structure varies across countries and different industries, the following cases are considered the most common ones: Vertical integration and monopoly in this case a single company operates the network infrastructure and both upstream and downstream components. Vertical integration with competition in the downstream or the upstream components -this case is similar to 1 but the company faces competition in the downstream and/or upstream components. Vertical separation with upstream and/or downstream competition, but the company that operates the network infrastructure does not operate in either the upstream or downstream components. Joint ownership in this case the infrastructure is owned jointly by companies competing in the upstream and/or downstream components. Infrastructure (facility-based) competition means competition among vertically integrated firms. 2.1.1. Historical background of the network industries in Western Europe In order to gain better understanding of the current developments in the network industries a short historic flashback is presented. The period of the 19th century Even in early 19th century when the free trade was dominant philosophy the government involvement was visible especially in the network industries. The triggering factor was the rights of way for railway tracks, gas and water, telegraph lines. After expropriation of the rights governments ease their way in establishing control over prices and profits by monitoring the engineering and financial stance of the respective companies. Overall the intervention of the government was limited more to arms length regulations and subsidies. The end of the 19th century is characterized with developed networks in telecommunication, rail, electricity supply which calls for more market opportunities and new entrants in the sectors. But the collapse of capitalism in 1930s brought distrust in governments ability to control private monopolies only through arms length regulations and subsidies. Thus alternative model was sought especially in network industries like telecommunication, railways and electricity. The time of the public ownership has come with the classic example of nationalization of the railways in France, Sweden, Spain and the UK in the period from 1937 to 1947. The period of the 20th century The main goals of the new state-owned enterprises were to provide service in the public interest along with break-even financially. The big challenge came from defining what is â€Å"public interest†. Eventually the solution was found, particularly for the network industries, in the so called â€Å"universal service† which comprises of standardized prices and service quality in the whole country. As a result of this approach the price of a product was fixed regardless of its point of distribution or delivery location for example electricity tariffs per kilowatt hour in different parts of the country were the same irrespective of the varying costs of supply. The second objective for the state enterprise was to break-even financially. The goal turned to be more difficult to achieve than initially planned having no clear guidance or support from the respective government authority. The â€Å"universal service† approach was not able to provide enough profits from areas of growth so as to compensate for the unprofitable ones. The period after 1960s is characterized with growing pressure on managers to meet the financial targets of â€Å"break-even† and beyond. The hope that the â€Å"universal services† will be able to cope with the unprofitable sectors by sustaining the profitable ones proved unsuccessful. Further, competition was growing and state owned enterprises were not flexible enough to respond adequately. Governments were worried with increased budget deficits coming from the rising public sector borrowing requirements. All of these contributed to the wave of privatization in Europe which had different timing across countries. In summary, the era of state owned enterprises was coming to its end. Its primary goal was to secure social and political unification and by the time of the second half of the 20th century much of this has been achieved. The technological developments changed much of the industries. New means of communication sprang apart from the traditional railways road, airlines, telecommunications. Although the strategic significance of a particular recourse was still the same, there was no need to keep it monopolized, for example one national air carrier. Financial returns from national resources like oil and gas were put into different legal forms thus allowing for concessions and tax schemes to be more profitable in the long-term. The Western European network industries had gone through tremendous changes for the last two centuries. The heritage left is the current surge for establishing more competitive regimes by allowing customer to benefit from improved quality and higher security standards. 2.2. The liberalized landscape in the network industries Coming from the state-owned natural monopolistic regime, the companies in the network industries had a structure where a non-competitive component of the industry was vertically integrated with a potential competitive component or activity. The separation of the two components by main sectors is summaries in a report by the Organization for Economic Cooperation and Development as illustrated in the Table 1. Scope for competition varies depending on geography and nature of demand, amongst other things. Services in lower-density, lower volume residential areas are less likely to be competitive than services to high-density, higher volume commercial areas. Source: OECD report â€Å"Restructuring Public Utilities for competition†, 2001, p.9 The natural monopolistic structure has evolved both as a result of the deregulation and the innovation that came with technology development. Once non-competitive components started being replaced by new components competition was spread in a broader sense. An example of such change in the competitive landscape of an industry is the break-through in mobile technology. The new mobile vs fixed communication has brought competing models in the same market segment. The European Union experience in liberalization of network industries continues with the enforcement of Community law; different directives and specific regulations designed to harmonize the newly liberalized markets in member states. The expectations for the future are to have one unified market which promotes rivalry among companies that deliver better choice for customers both in quality and price. 2.3. Overview of the economics of network industries The basic features used to describe the specifics of the economics in the network industries are investments, production, pricing and regulations. 2.3.1. Investments Compared to other types of industries in this case the initial investment is higher as the infrastructure costs are significant but necessary requirement for the successful delivery of the product to the customer. In addition the structure of the existing network influences its modification or extension thus allowing for extra costs compared to green field investments in other industries. For example in the railway transportation building the network meaning tracks is both expensive as an initial investment and subsequent maintenance costs. First, the main condition for laying the tracks is to have property right on the land which might be expensive to obtain, or to regulate. Second, the track technical execution is costly and third the future maintenance requires long-term commitments and highest quality of service provides which again is at a significant cost. 2.3.2. Production Economies of scale are realized when a product becomes standardized and an addition unit produce reduces the average cost of production. The complexity of network industries allows in certain businesses for such economies to be achieved but the variable cost component is less obvious than in other industries. The more popular concept in the network industries is the so called â€Å"surface/volume effect† in which case the available infrastructure provides for lower unit cost when output is increasing with the plant production. For example, when there is a large scale industrial or transportation equipment the costs for manufacturing are related to the surface of the equipment while the output from it is function of the volume to be transported (cases of oil, gas etc.). As a result the surface increases with the square of the equipment scale while on the other hand the volume increases with its cube. The ratio of surface/volume representing the average cost is a decreasing func tion of the scale. In practice, this leads to very large equipment being built. Economies of scope exist when a company is able to produce several goods at a total cost smaller than the sum of the costs of these activities when they are isolated one from the other. A business in a network industry might own a piece of equipment and the workforce that can produce large quantities of goods/services with similar specifications. For example, the building of information database which subsequently can be used for various activities without additional costs. Vertical integration exists in the case when a single company performs a number of successive distinct operations in the production process of a particular good or the provision of a service. In the context of network industries, especially those involved in the so called â€Å"public service†, the vertically integrated structure of a company can be justified if it manages to provide cost reduction in the service/product. Some sources of these cost benefits can come from technical complementarities, like better co-ordination between successive stages in the production process, also another social benefit might come from the removal of successive private profit-margins that are realized by intermediaries. On the other hand, the vertical integration in an upstream direction can be used by a company as a control mechanism on its customers, suppliers and competitors. The risk in this scenario comes from the fact that by controlling the delivery of certain strategic inputs, the com pany can gain dominant position on the end market. Example from the network industry is when a company owns both the control of the access to transport infrastructure and at the same time is a user of the infrastructure. 2.3.3. Competition The network industries are characterized with strong externalities which result from the interdependence of the agents. The interdependence is described with the effect that the level of satisfaction of one member has on other members in the network. These externalities are both positive and negative. The case of positive externalities is when particular action of a member increases the utility of the others or the so called â€Å"club externalities†. The spill-over effect is another positive externality, when the existence of a network in a certain area â€Å"spills† its benefits outside of its boundaries. In the case of negative externalities called â€Å"congestion externalities† the entrance of a new user in the network affects negatively the existing users. In practice the size and composition of a network are the result of a trade-off between club benefits and congestion costs. The composition and size of the network might change and the set access price would make some members to leave and other to join. This means that the number of those who wish to be in the network depend on the number of those who are already in the network. In this case equilibrium is reached when demand is compatible with itself, namely when the number of the members is exactly the same as the number of the candidates. But because of the earlier described club effect, at the given price would exist several equilibriums. The competition discussed here is ex post, meaning actual competition between two or more companies in the market. As already described, the competition in network industries is characterized with multiple equilibrium configurations for a given set of competing companies which implies that the quality of the service provided by the companies is endogenously determined by the participation of the clients. Here, the expected quality not the actual one is what matters. Another key feature of the competition in a network industry is that it can evolve into some kind of co-operation by decisions of compatibility. Compatibility can be achieved through standardization and the reason for companies to resist it is that it leads to more homogenous products. As a consequence of the standardization, the competition is enhances and loss of profit margins for the incumbent players. For example, in the electricity industry, there is a long tradition of co-operation at both national and international levels for the frequent power exchanges through interconnections. The usual dynamics of competition between companies are modified in a network environment as a result of the endogenous quality of the network and the necessity to reach a critical size in order to survive. So competition at the initial stage is considerably fierce. Companies have to make significant investment to capture the critical customer mass then sustain the image of better than the competitor quality of service / goods which subsequently will enhance the quality of the network. Later, switching costs create a lock-in effect and competition between those companies that managed to get through the initial phase is softer. Because of these companies have an incentive to heavily invest in infrastructure at the entry aiming to create a momentum and realize higher profits on next stage. Competition becomes weaker with the maturity of the industry, companies with existing installed base have less incentives to invest in quality and the only factor that triggers competition may come f rom break-through in the technology. If, no such happens then new entrants will be hard to overcome the competitive advantage of the incumbents. Still in some network industries certain elements like infrastructure remain natural monopolies as a result of the strong economics of scale and scope and relatively high degree of lumpy capital investments. 2.3.4.Regulation of network industries The liberalization process in the network industries brought the co-existence of monopolistic and competition elements in most industries. The change in the market structure requires new developments in the regulatory regimes in those industries but the transition phase as illustrated in Figure 1 is pursued with various conflicting priorities in the sole task to establish competition on the market. Currently, the European Union agenda is to have a set of regulations that will facilitate and speed-up this process. The ultimate goal is to increase efficiency in the performance of the industries and promote higher quality with the introduction of new products thus providing for lower consumer prices. Still the liberalizing policies face certain constraints coming from: the monopoly control legacy in the network industries, the common state aid subsidies, the institutional diversity in various countries, private vs public services objective; the existence of bottlenecks in the network infrastructure and the need for establishing interconnections between rival networks. Figure 1: The evolution of regulation over the three phases of market structure. Source: Lars Bergman, Chris Doyle, Jordi Gual, Lars Hultranz, Damien Neven, Lars-Hendrik Roller â€Å"Characteristics of network industries in Europes Network Industries: Conflicting priorities† published in 1998 by Center for Economic Policy Research.† The next chapter focuses on the current and future regulations in the European transport sector. It emphasizes some of the implications from the development and implementation of the regulations on two specific modes of passenger transport rail and road and the effects on the intermodal competition between them. 3. The regulatory framework in the European transport system â€Å"Transport is the backbone of the European economy, accounting for about 7 % of GDP and more than 5 % of total employment in the EU. As a network industry, transport requires elements such as infrastructures, vehicles, equipment, ICT applications and operational procedures to interact smoothly in order to move people and goods efficiently.† 1 Figure 2: Transport growth compared to GDP growthEU-27 Source: European Commission: â€Å"EU Energy and Transport figures† statistic book 2009 As one of the main sectors in the economy of a unified European market, transport is subject to continuous efforts from regulatory bodies to bring efficiencies and better product/service to customers. The framework for strategic development of the sector is set in the White Paper issued by the European Commission for a period of ten years and mid-term review is conducted which gives up-dates on the progress and recommendations for future developments. In 2010 the current strategy is to be reviewed and next decade program will be set forth in a new White Paper incorporating the new policies in light of the future trends in transport sector development. _________________________________________________________________________________________ 1 Antonio Tajani, Vice-President of the European Commission, Commissioner for Transport. Report â€Å"A sustainable future for transport†. 3.1. Trends influencing the European transport policy The EU White Paper 2001 and the mid-term review in 2006 drew key conclusions and set the directions for continual work on the EU sustainable transport policy. The key conclusions to be put forward in the new paper include optimization of each transport mode to bring competitiveness and propensity, transition of all modes to more environmental solutions both resource consumption and external costs. In addition each mode should be used efficiently on its own and in combination with all other modes so as to achieve sustainable utilization of resources. Looking at the future prospects of the industry and its development the following trends will have a significant influence on shaping the regulatory regime of the transport sector in EU. 3.1.1. Environmental challenges Transport is one of the sectors that have a tremendous impact on the environment. It is the only sector that has constantly increased its GHG emissions in the recent decade as illustrated in Figure 1. The growing concern on the global climate change has led to the adoption of climate and energy package by EU with a target to cut GHG emissions by 20% compared to levels in 1990. The environment aspect will be the main external factor influencing all modes of transportation and the respective players in the market. 3.1.2. Urbanization There has been a clear trend in the growth of urban population which is predicted by 2050 to be 84% of total European population2. This trend increases the challenges on the transportation sector as more density is brought in the urban networks accordingly with more environmental issues and congestion problems. The costs of both environmental and structural problems increase with the growth of cities density as longer delays in traffic jams incur larger fuel costs respectively emissions of CO2 are higher. One of the greatest challenges in this context is the building of additional infrastructure within the cities while bringing collective modes of transportation in resolving the congestion problems. 3.1.3. Migration and mobility According to the data provided by Eurostat 3 in the next decade EU is expected to add another 56 million people to its population as a result of a migration trend. This could be a positive trend for aging Europe as usually migrants are relatively young and settle in the developed urban regions that mainly contribute for the economic development. Another factor affecting the structural change in the population density is the internal mobility of workers between member states. This would be more visible with the removal of certain administrative and legal barriers in the labour market. 3.1.4. Ageing of population As mentioned in the previous paragraph one of the challenges in the coming future of Europe is the aging population. Compared to the world trend over the next 50 years, the annual average growth rate in the EU-27 population will be constantly declining as shown in Figure 4: Source: Eurostat (demo_plan), United Nations, Population Division of the Department of Economic and Social Affairs 2. United Nations, Department of Economic and Social Affairs/Population Division (2008), ‘World urbanisation prospects — The 2007 revision. 3. Eurostat (population and social conditions), Statistics in Focus No 72/2008; and European Commission, ‘Demography report 2008: Meeting social needs in an ageing society. SEC(2008) 2911. This particular phenomena has a very deep impact on the transport sector on few dimensions. First the availability of resources (human capital) will diminish. According to the EC â€Å"2009 ageing report† in 2060 there will be only two active workers for every pensioner. In the long-term this requires more contributions for pension funds thus limiting public finances for the supply and maintenance of the transport infrastructure. Overall, the end result might be more costly transportation products/services for the society as a whole. Second, the elder members of the society although much more flexible than a decade ago do travel less than younger population. This has a direct effect on the demand side for transport services both regional and long-distance. Another characteristic of an elder customer is that he/she puts high priority on factors like safety and comfort which in its turn requires different focus on the future specifications of the products/services provided in the transpiration industry mainly safety and reliability which pushes further the quality standards in the sector. 3.1.5. The financial crisis and global trends It is hard to ignore the current and future impact of the recently started economic crisis. The economic growth as forecasted few years ago had dramatically slowed down and this has led to major restructuring in all sectors of the economy. Still the continual globalization trend serves positively the transport sector, with the increasing need for integration and deepening of the single European market. The growing world population expected to reach 9 billion in 20505 is seen as the main challenge for all sectors of the economy, including transport. The scares resources that should provide for the growth in consumers, requires better model for creating sustainable transport sy

Booty :: essays research papers

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