30 September 2020
The European Union Aviation Safety Agency (EASA) has published an Opinion on the “high-level regulatory framework for the U-Space” in which it submitted a draft regulation to the European Commission. This opinion has been an integral part of the preparations for an EU-wide regulation of traffic management systems for unmanned aircraft systems (UAS).
Both in the original opinion on U-Space, the regulations of UAS, and subsequent refinements of the U-Space proposal, the issue of airspace safety has been at the forefront of the regulators mind. The economic impact on the UAS market has been neglected; instead. The aim of this study was to estimate the economic consequences of the proposed regulation. The results of the study help to weigh up the costs and benefits of regulation more carefully.
The study was created in cooperation with PIVOT Regulatory and discusses the direct cost of the proposed U-Space systems. But also the indirect cost through consumers’ and market players’ reaction to the new rules and requirements for drone flights are considered. It includes a discussion of potential market developments and distortions, as well as a thorough analysis of the potential regulation cost. Due to the uncertainty surrounding the final draft of the regulation, this study has looked at multiple scenarios and options when calculating the impact on the UAS market.
The study is available for download here:
31 October 2019
AI technologies are already shaping our everyday lives—be it in the form of voice assistants, navigation systems, smart homes or diagnosing illnesses via image analysis. In the future, they will make autonomous driving possible, network energy and mobility systems and turn cities into smart cities.
What potential does artificial intelligence (AI) have in store for medium-sized companies? Which applications already exist in the manufacturing industry? And under what conditions can AI flourish, contributing to the future success of entrepreneurial SMEs? These questions and more are taken up by a new study by the Saarland University, conducted under the leadership of Prof. Ashok Kaul.
As part of this Europe-wide study, medium-sized companies were asked about their current and planned use of AI technologies, and AI experts were interviewed on their assessment of future applications between now and 2030.
The study shows that while these technologies are expected to mainly bring cost savings to companies, AI experts see it as an opportunity to extensively change the value chain of SMEs. It has also been found that AI technologies are only widely used in a few companies. However, companies’ interest in AI applications is very high. With appropriate funding, a rapid spread of AI technology throughout SMEs, with a deep process integration within these companies, can be hoped for.
The study was funded by the non-profit Roland Berger Foundation for European Business Management.
18 September 2018
Germany is currently experiencing a shortage of doctors, as documented by the Federal Employment Agency. In 2017, vacancies for doctors remained unfilled longer than in most other professions. Surgeons have been particularly affected.
This study examines the differences between the career paths of female surgeons with and without family-related employment interruptions. It draws on employment data from the Saarland University Medical Center. The project was conducted as cooperation between the Chair of Public Policy at Saarland University and the IPE Institute for Policy Evaluation.
A key empirical finding of the study is that employment interruptions and subsequent part-time work create a permanent career setback. When taken, employment interruptions delay female surgeon’s specialist training by three years on average. In addition, ten years after initial employment, female surgeons with employment interruptions earn around 10 percent less than those without.
The study presents family-friendly measures that help to maximize the careers of female surgeons. The sooner clinics implement the necessary changes, the better their chances are of competing successfully for good doctors – despite the prevailing doctor shortage.
31 May 2018
The Economic Reform Committee (ERC) of Thailand has commissioned Roland Berger, together with the IPE, to assess the macroeconomic impact of economic and social reforms in Thailand. On 15 Aug 2017, there was an official announcement to set up the ERC, consisting of senior public and private sector experts. Along with ten other reform committees, such as the Law and Energy reform committees, the ERC has been given a one-year mandate to deliver reform plans and help implement initiatives that elevate Thailand to the next level of economic and social development. Even though Thailand's economic and social achievements over the last three decades have been impressive, the world will look very different in 2040 due to the global trends in digitalization and automation. This project demonstrates Thailand’s need and willingness to proactively address the challenges emerging from a rapidly changing world economy.
Using a growth accounting approach and macroeconomic simulation techniques, the IPE project team developed a quantitative macroeconomic simulation model that forecasts short- and long-term social and economic impacts of reforms across several areas, such as agricultural, educational and retirement reforms, as well as regional infrastructure development projects. In addition, distributional and sector-specific effects were estimated on specific regions of Thailand.
15 January 2018
IPE, together with Roland Berger, fka (Forschungsgesellschaft Kraftfahrwesen Aachen) and the Institute for Automotive Engineering (ika) at RWTH Aachen University, has been commissioned by the Federal Ministry for Economic Affairs and Energy (BMWi) to analyze the ongoing structural changes impacting in the automotive sector. Due to electric mobility, digitalization and new mobility concepts, the global automotive industry is poised at the brink of profound restructuring. This restructering has the potential to cause a variety of economic impacts.
Forecasting the economic impacts of these structural changes is a central aim of BMWi’s reasearch project “Value Added in the German Automotive Sector in 2030/2050”. Additionally, the likelihood of substantial spillovers into other industries, especially the energy sector, is at the heart of this project. The energy sector is also undergoing a profoud transformation, one which will likely have a signficant impact on the automotive industry. A key objective of this project is to show how transformations in the two sectors are linked, and how they can enhance one another – for example, electricity storage and power smoothing. The final aim of the study, which runs from January 2018 to mid 2019, is to develop policy recommendations that secure the competiveness of automotive sector and its jobs.
15 December 2017
In cooperation with a local team from Roland Berger, IPE conducted an economic impact assessment regarding the implementation of a VAT system and selected excise taxes in the Kingdom of Bahrain. The main objective of the project, which was commissioned by the Ministry of Finance of the Kingdom of Bahrain, was to anayze the fiscal and socioeconomic impact of the tax reform. The underlying Unified VAT Agreement was part of a comprehensive reform agenda of the member states of the Arabic Gulf Cooperation Council (GCC). The six Member states committed to introducing a largely unified VAT system in 2018. The implementation of a comprehensive value added tax is a turning point for the GCC region, in which tax revenue has so far been a negligible source of government finance.
Using microeconomic simulation techniques, the IPE project team has developed a quantitative behavioral model that forecasts tax revenue from VAT and excise taxation in Bahrain over the next few years. In addition, the distributional effects of taxation across income and household type were computed.
6 December 2017
On Wednesday, December 6, a full-day research workshop on newer developments in earnings and bankruptcy forecasting took place at the IPE. The latest research work from scientific finance literature was discussed with regard to its practical relevance.
5 July 2017
In cooperation with UZH, IPE has successfully completed a multi-year pilot project for SUISA. The primary objective of the project was to create a performance-linked fair distribution for recorded music royalties.
The aim of the project team was to develop a statistical procedure to construct a representative sample of songs played in clubs throughout Switzerland. There are more than 500 clubs in Switzerland playing a wide variety of music styles. One of the continuing challenges for royalty compensation in the Swiss language regions, and its diverse club-music styles, is to ascertain an effective ‘universal playlist’ in a representative fashion.
To this end, the team devised a scientific “music monitoring” technique, utilizing the recordings of so-called “hit boxes” (devices for music recognition similar to Shazam), which were carried out and evaluated in Swiss clubs by the French contractor Yacast according to our specifications. To ensure representativeness, modern statistical methods were used to determine optimal locations for these hit boxes and to check these locations on a regular basis.
“This project is an example of how applied statistics creates fairness and, at the same time, lives up to the scientific principle,” said project leader Professor Michael Wolf, a statistician at the University of Zurich and senior adviser at IPE.
The Swiss Federal Institute of Intellectual Property (“IGE”), who is responsible for the supervision of SUISA, has already approved our procedure and the underlying statistical methodology. The first compensation payments based on our work were distributed to the music copyright owners during the middle of 2017.
1 February 2017
The new accounting standard IFRS 9 will supersede the current IAS 39 standard from January 2018 on. Financial institutions need to make considerable adjustments in terms of their risk provisions. The current standard for measuring and recognizing risk provisions uses an 'incurred loss model', that is, losses are only accounted for when they are realized. Contrarily, the upcoming accounting standard will require risk provisions be based on an 'expected credit loss model', that is, the future expected loss is accounted for.
The 'expected credit loss model' has a genuinely new multi-year focus with regard to the risk parameters PD (probability of default), LGD (loss given default) and EAD (exposure at default). This new approach differs markedly from the prior single-year perspective of the regulator.
The IPE project team developed a multi-year model for the parameters LGD and EAD for W&W. IPE also provided valuable insights regarding the multi-year model for the PD.
7 to 8 November 2016
On the 7th and 8th of November 2016, the Federal Ministry for Economics and Energy (BMWi) held a networking conference for electric mobility at the Scandic Hotel in Berlin. The parliamentary state secretary at the BMWi, Uwe Beckmeyer, opened the conference. The aim of the conference was to provide electric mobility professionals from the business, science, and political sectors a platform to exchange ideas and grow their networks.
At the two-day conference, approximately 400 experts formed multiple subject panels to discuss the current and future challenges in seven fields of action: Electric mobility as a building block of the energy transition; Battery and cell manufacturing at the business location Germany: Energy storage 'Made in Germany'; New automobile concepts: Electric mobility of the next generation; The powertrain: The new centerpiece of the car; Commercial vehicles as catalyst for electric mobility; The future of charging: Safe, accessible, fast; and Digitization in the fabrication of electric vehicles.
On invitation by the BMWi, the IPE research Director Professor Ashok Kaul, participated in the central panel discussion, “New mobility - Challenges for Industry and politics”. Moderated by journalist Conny Czymoch, the other members of the panel were: Professor Achim Kampker (Founder & Chair PEM of the RWTH Aachen, Managing Director of Streetscooter GmbH, and Division Manager for e-mobility at the Deutsche Post DHL); Professor Barbara Lenz (DLR, Institute of Traffic Research) and Alexander Mankowsky (Futurologist, Daimler AG).
19 September 2016
The EU has set itself a goal of successively reducing greenhouse gas emissions until 2050. The emission of CO2 is by far the most consequential man-made greenhouse gas. Road traffic alone is responsible for 20 to 25 percent of CO2 emissions in Europe, for about half of which passenger cars are responsible. Therefore, the EU has set binding and increasingly tougher emission reduction goals for all new passenger car registrations over the last 10 years. For example, the average goal for passenger car registration in 2015 was 130 grams of CO2 per kilometer (g/km), which was already reached during 2014 (assuming an average emission of 159 g/km in 2007). The CO2 goal for 2021 is now set at 95 g/km. The target path for passenger car CO2 emissions for 2025 and 2030 has yet to be decided and is currently the subject of contentious debate. This short study quantifies the economic effects of alternative CO2 regulation paths on the European automobile sector until 2030. The basis of our analysis is a common economic production model that depicts the production factors labor and capital. The aim of this study is to estimate the EU-wide job losses in the European automobile market that can be attributed to the CO2 regulation for passenger car registration from 2021 to 2030.
15 June 2016
The National Platform for Electric Mobility (NPE) commissioned the IPE Institute for Policy Evaluation in summer 2015 to determine the employment effects of a comprehensive support strategy for electric mobility in Germany.
Through comprehensive support of electric vehicles Germany can attain a dominant position as a lead supplier for electric mobility and by 2020, create more than 30,000 new, sustainable jobs (thereof approx. 25,000 in the automotive sector and about 6,500 jobs through infrastructure building and fiscal effects).
A comprehensive support and funding strategy will combine the following regulatory actions:
1. Continuation of the existing extensive support of R&D,
2. Supporting a rollout of the necessary charging infrastructure,
3. Direct support for purchases of electric vehicles.
Through comprehensive support, a dynamic increase in new registrations of electric vehicles and an export boom of electric vehicles manufactured in Germany can be achieved. Electric mobility in Germany still has a very promising future - due in part to the strength of the conventional passenger car sector and government support of R&D. One million electric vehicles on German roads by 2020 are most certainly possible.
17 March 2016
"The incidence of Cash for Clunkers: Evidence from the 2009 car scrappage scheme in Germany"
forthcoming in: International Tax And Public Finance
As a reaction to the 2007 financial crisis, governments all over the world launched car scrappage programs to stimulate their economies.
This paper, co-authored by IPE Research Director Ashok Kaul, investigates the German 2009 “Cash for Clunkers” program, focusing on the incidence of the premium. More precisely, the question is, how much of the EUR 2,500 buyer subsidy was captured by the demand side? The empirical analysis shows that the incidence of the subsidy varied strongly and significantly across car-price segments. Subsidized buyers of cheap cars paid only a little more than comparable buyers who did not receive the subsidy, indicating incidence levels slightly below 100%. For more expensive vehicles, subsidized buyers were granted large extra discounts on top of the government premium, translating into incidence levels way beyond 100%. Taken together, the results suggest that the positive effect for expensive cars more than compensated for the negative effect for small cars, leading to an estimated aggregate incidence of EUR 350 million).
Further information: http://link.springer.com/article/10.1007/s10797-016-9396-1
05 January 2016
A book, coauthored by IPE Research director Dr. Ashok Kaul, on the taxation of cross-border dividends and royalty payments in the state of source has just been published. The book is based on an export report commissioned by the German Federal Ministry of Finance.
This book examines, both legally and empirically, the taxation of cross-border dividends and royalty payments in the state of source. The authors develop guidelines on how corporate tax policy in Germany could respond to the fundamental challenges of international tax law and the increasingly significant tax-planning activities of multinational companies.
How to tax intercompany dividends and royalty payments
The recommendations with respect to intercompany dividends and royalty payments differ fundamentally. On the one hand, it seems advisable to provide withholding tax relief for intercompany dividends within double taxation agreements. On the other hand, measures should be considered that ensure a reasonable one-time taxation of royalty payments. To this end, a limit on the deduction of royalty payments appears preferable to a withholding tax on royalty payments. A key advantage of such approach is that it could be implemented unilaterally and flexibly. The authors argue that a limit on the deduction of royalty payments could be implemented in conformity with both German constitutional law and EU law.
01 December 2015
IPE Study: Three years of plain packaging for tobacco products in Australia - Have the expectations been met?
(Saarland, Germany) The IPE Institute for Policy Evaluation Saarland has conducted a study on the occasion of the third anniversary of plain packaging. In December 2012, the Australian Government implemented plain packaging for tobacco products in order to curb smoking. But three years later, governmental data and related research show that neither the rate of smoking, nor tobacco consumption have declined as a result of plain packaging.
The study was commissioned by Philip Morris International.