Chapter 457: The Battle of Ideas
Chapter 447: The Battle of Ideas
The news that the province of Bosnia and Herzegovina was going to establish a heavy industry powerhouse spread and immediately caused a stir in the capital circles.
The outsiders look at the scene, the insiders look at the doorway.
Heavy industry has never been a big investment, and it is a long-term investment. An investment of a few years, more than ten years can not recover the cost, are normal operation.
Similarly this industry, once bigger, the profits are much higher. This threshold alone eliminates most competitors, and compared to other industries, heavy industry companies have far fewer competitors.
The Austrian economy has just emerged from the crisis and is in a period of rapid growth. The demand for steel and copper has increased dramatically and is in a state of oversupply.
Theoretically, as long as they are produced, these two products are not at all worried about selling. However, this was only modern times, and to join this industry was not something that would bear fruit in a day or two.
According to past experience, it would take at least two or three years from the start of searching for a suitable plant to the launch of the product.
In fact the time required is even longer, prior internal preparations not to mention, this kind of large investment must be organized professionals prospecting, but also a comprehensive assessment of the cost, but also to consider the transportation, market analysis is also indispensable.
In this era, there are not so many professional institutions on behalf of the work, all investors have to organize their own, judgment. These alone are not enough, even if it is to the bank loan investment, the cost of the initial investment is at least hundreds of thousands of guilders.
It can be said that most people are eliminated from the beginning. Don’t come if you don’t have money, this industry is the monopoly of capital predators, and small workshops now have no room to survive.
Empty gloves that is impossible, the banks are all private, one more than one strict audit, no collateral, no one want to lend a huge amount of money.
And this era of heavy industrial investment, has long climbed to millions of guilders, even if it costs tens of millions of guilders is not impossible.
The most valuable thing is not the machinery and equipment, but the mines that produce the raw materials. Austria is not short of cheap mines, but since cheap also means that the mining difficulty has increased dramatically, or that there is a certain mining value of poor mines.
Experienced practitioners know that this cheap can not be picked up. If you can not control production costs, once the economic crisis will be cool.
As for the separate operation of mines and smelters, that does not exist, now the most popular are grouping, industrial chain, generally from the upstream production of raw materials to the downstream product sales of one-stop service.
Industrial division, that is based on the local raw material depletion, must be purchased from the outside world. This would increase costs substantially, and capitalists don’t like it.
The biggest problem for French industry at the moment is that it has to import coal from the outside world, which increases the cost of the industry, which is why Napoleon III is eyeing the Rhineland region.
The Starbucks Club of Vienna, one look at the name and you can tell it’s Franz’s bad taste, where most of the well known businesses he remembers were screwed up in advance.
Of course a lot of that may have changed, too much time has passed and memories can be faulty. Sometimes vague memories of businesses with the same name and very different lines of business.
Michelin can become an ice cream brand, Beyoncé can become a park of some sort, there are so many corporate names that have been played out that if another traveler showed up they would be absolutely confused.
No one is destined to know about these changes. Inside the box, several middle-aged men are playing bowling while chatting.
One middle-aged man threw out the ball in his hand and asked with a smile, “Thor, do you really want to go to Bosnia and Herzegovina Province to invest in heavy industry?”
Thor smiled slightly and said, “All in, Wills your skills have improved again.”
Walking forward, he threw the ball in his hand and sighed before adding:
“Yes, I do have plans for that. Most of the industries in the country are saturated at the moment, and the new industries seem to have a lot of money, but we can’t play around with them.
The Austrian New Energy Power Company’s advantage is too great, even if we join in now, we can only follow them to make a living.
It is not reliable to do financial industry all the time, the investment is too concentrated, the anti-risk ability is too low. Although the heavy industry has a large initial investment, but the development potential is also large.
Compared to new industries, these technologies are already mature. As you guys know, I still have a half-dead steel plant in my hands, and entering this industry isn’t completely rootless.”
The several people present were all shareholders of the Austrian Savings Bank, as well as the bosses behind several securities companies, and had even completed the excesses of their identities by obtaining titles of nobility.
However, these bigwigs also had a sense of crisis, and as the financial order became more standardized, the risk of manipulating the stock market became higher and higher.
As a member of the emerging aristocracy, they also cherished their feathers. No one wanted to go through all the trouble of crossing over into high society and immediately end up in disgrace again.
It is important to know that their kind of lifelong aristocrats have another name: quasi-aristocrats, or expeditionary aristocrats.
Usually at this stage, the older nobles would look at them with a magnifying glass. Once they committed a crime, it would be easy for them to be knocked down to the dustbin.
Austrian nobility titles are not cheap, to use money to smash out a noble title, with luck maybe tens of thousands of divine guilders would be enough, with bad luck smashing in millions of divine guilders could be a washout.
The military honors and titles system is full of discrimination against kryptonite players like them. Groups go to the colonies to brush military honors, the following people will also share the profits, but not all of them will fall on the head of the boss behind the scenes.
If one were to brush the noble title in the country, that would be even more difficult. Only those who had made significant contributions to society and had gained Franz’s approval would be able to obtain a knighthood.
Franz had succeeded to the throne for so many years, and only two capitalists had accomplished this feat, instead, there were more than twenty scientists who had gotten the title of nobility because of scientific and technological inventions.
Wells shook his head and said, ”Thor, you are too optimistic. I think that mining salt in Bosnia and Herzegovina Province is more profitable than reindustry, at least the payback is faster.
The dominant player in heavy industry is the Austrian Iron and Steel Group, this state-owned company is too dominant, monopolizing nearly half of the domestic steel production.
Want to knock them down too difficult, but not as good as other industries. Even the newly risen Austrian New Energy Power Company doesn’t have such a big advantage.”
Thor once again threw out the bowling ball in his hand and said, “It seems that we are having a hard time convincing the other side.
The Austrian New Energy Power Company relies on a win-win model of cooperation to conquer the European continent, even in Britain and France they have a large market share.
Although this share is all potential, but they have already established a system, most of the power companies have turned into their strategic partners, as long as there are no accidents it will become a reality.
Once copper production increases and the cost of power equipment decreases, most of Europe’s power supply, will be monopolized by this alliance, and I don’t think the power companies you’re messing with will be able to achieve a breakout.
On the contrary, the Austrian steel group is good to deal with, they are state-owned enterprises, in addition to normal business competition, is not going to kill us.
No one will be in direct conflict until supply and demand changes. Such a long period of time is already enough for us to grow and develop.”
It was true, the monopoly established by the Austrian New Energy Power Company was mainly a system of standards, and incidentally, the marketing of equipment.
In the subsidiaries established around the world, the Austrian New Energy Power Company did not have a dominant share, most of the shares were divided, and in some areas, it was simply a technology stake.
This is the benefit of mastering the core technology, even if it is not the majority shareholder, the right to speak in the company is not low, there is no need to worry about being sidelined out.
As a latecomer, it is very difficult to break this monopoly. The biggest problem is that they don’t have the core technology and can’t break through the patent barrier.
Who knows when they will be able to come up with another system. The market waits for no one, once the standard is popularized, it will be difficult to intervene again.
Can’t just tear down the already installed power supply network and replace it with their new technology standard, right? It’s not a question of whether it’s feasible or not, it’s a question of why people want to switch.
Without enough benefit, who would abandon already mature equipment for new power equipment that hasn’t passed the test.
Unless they can come up with a new technology system and apply it in practice with success before the technology becomes widespread, they will not be able to compete.
Wells waved his hand, showing an innocent expression, and said, “Well, I give up trying to convince you. However, my friend. Who told you that I’m going to compete with them?
It’s true that I’m investing in a power company, but the difference in strength between the two sides is too great, so if I’m going to jump the sinkhole that is the power supply system, then I can only become cannon fodder.
According to the engineers, not to mention bypassing the patent barriers, even if there are no patent restrictions, if you want to copy their technology, it is impossible to do so without three to five years.
This is a complete set of technical system, can not just a technology, missing any one part is not. Otherwise, the British and the French would not have purchased the patent license, but to start another stove.
The electric power company I invested in, the research and development is the use of electricity in industry, the use of electric machinery and equipment to replace the steam engine now on the market, the two sides are not competitors at all.”
Theoretically, these technologies had unlimited potential, however the capital that needed to be invested was not a small number. Wells wanted to convince Thor that it was actually a matter of money.
It wasn’t that he didn’t have the money, the main reason was that the development of new technologies was full of uncertainty, and he needed to find someone to share the risk.
Judging from the current market situation, the lifespan of this kind of new technology enterprise was the shortest, and it was the main force that lowered the average lifespan of Austrian enterprises.
In contrast, the traditional enterprise vitality is much stronger, survival of twenty or thirty years is normal, a hundred years old enterprise are not a few.
After all, traditional industries are assets that can be sold. Many companies have changed ownership many times and still survived.
In contrast, high-tech innovation industry is not the same. Luck developed a new technology, then the enterprise is still valuable; bad luck did not do anything out, so the enterprise is completely worthless.
No results of the enterprise can not live long, investors have limited patience, no one waiting for them to sharpen a sword for ten years.
The shortest-lived technology companies are those that last only a few months. The shortest technology companies have a lifespan of only a few months, and when they develop a technology because a competitor has done it first, they are discarded by investors as having no potential.
The capital market is so cruel, the survival of the fittest.
It is not surprising that capitalists are not happy to invest in new high tech companies. Not only is it risky, but even the results are not necessarily commercially viable.
As a result, most of the technological inventions and innovations of the 19th century were driven by individuals. It was only when there were results that capital swarmed in to drive the technological revolution.
If the Austrian New Energy Power Company had not risen to prominence and created the city of night in Vienna, so that everyone could see the importance of electricity, the power industry would not have been hotly pursued by capital.
Even so, capitalists are likewise trying to find ways to reduce risks. This is also the reason why the strategic expansion of the Austrian New Energy Power Company can be so smooth.
The two men this is a battle of investment philosophy, there is no right or wrong, only suitable or not.
Did not enter the light industry wrestling, it is enough to prove the vision of the two. Of course, the economic crisis that just ended, should also be an important influence.
Capital does not avoid risk, but capitalists have the instinct to avoid risk. The industry where overcapacity has occurred, everyone knows that it is a sunset industry.
It is not easy for a sunset industry to survive, and it is obviously impossible to make huge profits.
Seeing the scene is a bit awkward, fellow traveler Lawrence Lovsky changed the topic and said: “It’s almost 12 o’clock, we should have lunch. I think the beef in that restaurant next door is good, why don’t we go and try it?”
Thor laughed, “I prefer their roast goose, don’t you guys?”
……
(End of chapter)