MARITIME ECONOMICS JARGON

Reviewer for Final Examination

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

Companies with ratios of less than 1 cannot pay their current liabilities and
should be looked at with extreme caution. Furthermore, if the acid-test ratio is
much lower than the working capital ratio, it means current assets are highly
dependent on inventory. Retail stores are examples of this type of business.
The term comes from the way gold miners would test whether their findings were
real gold nuggets. Unlike other metals, gold does not corrode in acid; if the
nugget didn't dissolve when submerged in acid, it was said to have passed the
acid test. If a company's financial statements pass the figurative acid test, this
indicates its financial integrity.
2. Bassel Convention
Chapter V - Basel Convention
The Basel Convention on the Control of Transboundary Movements of
Hazardous Wastes and their Disposal was negotiated under the United Nations
Environment Program (UNEP) beginning in 1988. After the twentieth country
ratified the Basel Convention on February 5, 1992, the Convention became
effective for those twenty countries on May 5, 1992. The Convention's main goal
is to protect human health and the environment from hazards posed by
transboundary movements of hazardous waste. The negotiators of the
Convention wanted to promote environmentally sound management of exported
and imported waste, especially in developing countries.
A. Convention Requirements

In addition to its main objectives, the Basel Convention also seeks a reduction in
waste generation, a reduction in transboundary waste movements, and a
standard set of controls for waste movements that do occur. These controls are
similar to EPA's regulatory controls for imports and exports of hazardous waste.
The Convention requires that the exporting country notify the receiving country
and any transit countries of the proposed shipment. The waste shipment may
occur only after the transit and receiving countries have given consent for the
shipment. The Convention requires that a tracking document, or movement
document, accompany the waste shipment from its point of origin until its ultimate
disposal. In addition, shipments of waste must be packaged, labeled, and
transported in accordance with international rules. In the event that an accident
occurs during the shipment of the waste, Basel requires that the responsible
parties inform the potentially affected countries of the accident. Finally, parties to
the Convention must submit an annual report to the Basel Secretariat
summarizing the amounts and types of hazardous waste exported and the
destination and disposal methods.
Top of Page
B. Basel Restrictions
The Basel Convention contains two major restrictions on waste movements. The
first restriction requires that exports of waste occur only under the following
circumstances:
If the exporting country does not have sufficient disposal capacity
If the exporting country does not have disposal sites that can dispose of the
waste in an environmentally sound manner
If the wastes are required as a raw material for recycling or recovery industries in
the importing country.
Basel also prohibits movement of waste between parties to the convention and
non-parties, except when these movements occur under an equivalent bilateral
or multilateral agreement. The bilateral or multilateral agreements must provide
an equally sound management structure for transboundary movements of waste.
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C. Implications for US Importers & Exporters
To date, the United States has signed the Basel Convention, but has yet to ratify
the Convention. In order for the United States to become a Basel party, it must
ratify the Convention and have sufficient authority to implement Basel's terms.
For this reason, the United States cannot participate in waste transfers with
Basel Parties without a separate and equivalent bilateral or multilateral
agreement.
As discussed earlier in this document, the United States has entered into several
bilateral agreements and one multilateral agreement. The United States currently
maintains a multilateral agreement with the members of the OECD governing

transboundary movements of waste for recovery purposes. In addition, the

United States has established two bilateral agreements, with Canada and
Mexico, for importing and exporting hazardous waste. Finally, Costa Rica,
Malaysia and the Philippines have entered into separate agreements with the
United States. Under these three agreements, the United States may received
waste from Costa Rica, Malaysia, and the Philippines but may not export waste
to these countries.
3. Berth Reliability
Berth schedule where ships are planned to dock immediately after another for
processing. In such a schedule, any delay observed in the voyage of a ship
creates a delay in berthing time of that ship and the following ship schedule on
the berth.
4. Break Bulk Cargo
general cargo is a term that covers a great variety of goods that must be loaded
individually, and not inintermodal containers nor in bulk as with oil or grain. Ships
that carry this sort of cargo are often called general cargo ships. The termbreak
bulk derives from the phrase breaking bulkthe extraction of a portion of
the cargo of a ship or the beginning of the unloading process from the ship's
holds. These goods may not be in shipping containers. Break bulk cargo is
transported in bags, boxes, crates,drums, or barrels. Unit loads of items secured
to a pallet or skid are also use
5. BreakevenBreak-even (or break even) is the point of balance between making either a
profit or a loss. The term originates in finance, but the concept has been applied
widely since
6. Build-Operate-Share-Transfer (BOST)
7. Build-Operate-Transfer (BOT)
s a form of project financing, wherein a private entity receives a concession from the private or public
sector to finance, design, construct, and operate a facility stated in the concession contract. This enables
the project proponent to recover its investment, operating and maintenance expenses in the project.
Due to the long-term nature of the arrangement, the fees are usually raised during the concession period.
The rate of increase is often tied to a combination of internal and external variables, allowing the
proponent to reach a satisfactory internal rate of return for its investment.

8. Cabotage
is the transport of goods or passengers between two points in the same country by a vessel or an aircraft
registered in another country. Originally a shipping term, cabotage now also covers aviation, railways,
and road transport. Cabotage is "trade or navigation in coastal waters, or, the exclusive right of a country
to operate the air traffic within its territory".[1]
Cabotage is used in the context of "cabotage rights", the right of a company from one country to trade in
another country. In aviation terms, it is the right to operate within the domestic borders of another country.
Most countries do not permit aviation cabotage, for reasons of economic protectionism, national
security or public safety. One notable exception is the European Union, whose members all grant
cabotage rights to each other.[2]

9. Baltic Dry Index (BDI)

The Baltic Dry Index (BDI) is a number issued daily by the London-based Baltic
Exchange. Not restricted to Baltic Sea countries, the index provides "an
assessment of the price of moving the major raw materials by sea. Taking in 23
shipping routes measured on a timecharter basis, the index
coversHandysize, Supramax, Panamax, and Capesize dry bulk carriers carrying
a range of commodities including coal, iron ore and grain.
10. Cartel
a formal (explicit) "agreement" among competing firms. It is a formal organization
of producers and manufacturers that agree to fix prices, marketing, and
production.[1] Cartels usually occur in an oligopolistic industry, where the number
of sellers is small (usually because barriers to entry, most notably startup costs,
are high) and the products being traded are usuallyhomogeneous. Cartel
members may agree on such matters as price fixing, total industry output, market
shares, allocation of customers, allocation of territories, bid rigging,
establishment of common sales agencies, and the division of profits or
combination of these. The aim of such collusion (also called the cartel
agreement) is to increase individual members' profits by reducing competition.
11. Cashflow
Cash flow is the movement of money into or out of a business, project, or financial product. It is usually
measured during a specified, limited period of time. Measurement of cash flow can be used for calculating
other parameters that give information on a company's value and situation. Cash flow can be used, for
example, for calculating parameters: it discloses cash movements over the period.

to determine a project's rate of return or value. The time of cash flows into and out of projects are
used as inputs in financial models such as internal rate of return and net present value.

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

as an alternative measure of a business's profits when it is believed that accrual

accounting concepts do not represent economic realities. For instance, a company may be notionally
profitable but generating little operational cash (as may be the case for a company that barters its
products rather than selling for cash). In such a case, the company may be deriving additional
operating cash by issuing shares or raising additional debt finance.

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

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

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

12. Chartering
is an activity within the shipping industry. In some cases a charterer may own cargo and employ
a shipbroker to find a ship to deliver the cargo for a certain price, called freight rate. Freight rates may be
on a per-ton basis over a certain route (e.g. for iron ore between Brazil and China), in Worldscale points
(in case of oil tankers) or alternatively may be expressed in terms of a total sum - normally in U.S. dollars
- per day for the agreed duration of the charter.
A charterer may also be a party without a cargo who takes a vessel on charter for a specified period from
the owner and then trades the ship to carry cargoes at a profit above the hire rate, or even makes a profit
in a rising market by re-letting the ship out to other charterers.
Depending on the type of ship and the type of charter, normally a standard contract form called a charter
party is used to record the exact rate, duration and terms agreed between the shipowner and the
charterer.
Time Charter Equivalent is a standard shipping industry performance measure used primarily to compare
period-to-period changes in a shipping company's performance despite changes in the mix of charter
types.

13. Convergence of Technology

is the tendency for different technological systems to evolve toward performing
similar tasks. Convergence can refer to previously separate technologies such as
voice (and telephony features), data (and productivity applications), and video
that now share resources and interact with each other synergistically

14. Current Ratio

is a financial ratio that measures whether or not a firm has enough resources to pay its debts over the
next 12 months. It compares a firm's current assets to its current liabilities. It is expressed as follows:

The current ratio is an indication of a firm's market liquidity and ability to meet creditor's demands.
Acceptable current ratios vary from industry to industry and are generally between 1.5 and 3 for healthy
businesses. If a company's current ratio is in this range, then it generally indicates good short-term
financial strength. If current liabilities exceed current assets (the current ratio is below 1), then the
company may have problems meeting its short-term obligations. If the current ratio is too high, then the
company may not be efficiently using its current assets or its short-term financing facilities. This may also
indicate problems in working capital management.
Low values for the current or quick ratios (values less than 1) indicate that a firm may have difficulty
meeting current obligations. Low values, however, do not indicate a critical problem. If an organization
has good long-term prospects, it may be able to borrow against those prospects to meet current
obligations. Some types of businesses usually operate with a current ratio less than one. For example, if
inventory turns over much more rapidly than the accounts payable become due, then the current ratio will
be less than one. This can allow a firm to operate with a low current ratio.
If all other things were equal, a creditor, who is expecting to be paid in the next 12 months, would
consider a high current ratio to be better than a low current ratio, because a high current ratio means that
the company is more likely to meet its liabilities which fall due in the next 12 months. You should view the
relation between the operation cycle period and the current ratio

15. Deadwright tons (DWT)

(also known as deadweight abbreviated to DWT, D.W.T., d.w.t., or dwt) is a measure of how
much weight a ship is carrying or can safely carry.[1][2][3] It is the sum of the weights of cargo, fuel, fresh
water, ballast water, provisions, passengers, and crew.[1] The term is often used to specify a ship's
maximum permissible deadweight, the DWT when the ship is fully loaded so that its Plimsoll line is at the
point of submersion, although it may also denote the actual DWT of a ship not loaded to capacity.
Deadweight tonnage was historically expressed in long tons but is now usually given internationally
in tonnes.[4] Deadweight tonnage is not a measure of the ship's displacement and should not be confused
with gross tonnage or net tonnage (or their more archaic forms gross register tonnage or net register
tonnage).

16. Debt-Equity Ratio

The debt-to-equity ratio (D/E) is a financial ratio indicating the relative
proportion of shareholders' equity and debt used to finance a company's assets.
[1]
Closely related to leveraging, the ratio is also known
as Risk, Gearing or Leverage. The two components are often taken from the

firm's balance sheet or statement of financial position (so-called book value), but
the ratio may also be calculated using market values for both, if the company's
debt and equity are publicly traded, or using a combination of book value for debt
and market value for equity financially.
17. Demolition Market
After a ship's lifespan is exceeded it will be demolished. It's steel and
components will be dismantled and sold. Since this work is hard, dangerous and
badly paid it is done in the Far East
18. Depreciation
efers to two aspects of the same concept:
1. the decrease in value of assets (fair value depreciation), and
2. the allocation of the cost of assets to periods in which the assets are used (depreciation with
the matching principle).
The former affects the balance sheet of a business or entity, and the latter affects the net income that they
report. Generally the cost is allocated, as depreciation expense, among the periods in which the asset is
expected to be used. This expense is recognized by businesses for financial reporting and tax purposes.
Methods of computing depreciation, and the periods over which assets are depreciated, may vary
between asset types within the same business and may vary for tax purposes. These may be specified by
law or accounting standards, which may vary by country. There are several standard methods of
computing depreciation expense, including fixed percentage, straight line, and declining balance
methods. Depreciation expense generally begins when the asset is placed in service. For example, a
depreciation expense of 100 per year for 5 years may be recognized for an asset costing 500.

19. Dry Bulk Cargo

A dry bulk cargo barge is a barge designed to carry freight such as coal,
finished steel or its ingredients, grain, sand or gravel, or similar materials. Barges
are usually constructed of steel. They have an outer hull, an internal void that is
fitted with heavy struts and cross braces or scantlings, and an internal cargo box.
The outer hull of a barge can come in one of two configurations. A rake barge
has a curved bow to provide less resistance when being pushed and is usually
placed at the head of the tow. A box barge is usually placed in the center and
rear of the tow and can hold more cargo.
20. Economies of Agglomeration
is used in urban economics to describe the benefits that firms obtain when
locating near each other ('agglomerating'). This concept relates to the idea

ofeconomies of scale and network effects. Simply put, as more firms in

related industries cluster together, costs of production may decline significantly
(firms have competing multiple suppliers, greater specialization and division of
labor result). Even when multiple firms in the same sector (competitors) cluster,
there may be advantages because that cluster attracts more suppliers and
customers than a single firm could alone. Cities form and grow to exploit
economies of agglomeration.
21. Economies of Scale
The cost advantage that arises with increased output of a product. Economies of
scale arise because of the inverse relationship between the quantity produced
and per-unit fixed costs; i.e. the greater the quantity of a good produced, the
lower the per-unit fixed cost because these costs are shared over a larger
number of goods. Economies of scale may also reduce variable costs per unit
because of operational efficiencies and synergies. Economies of scale can be
classified into two main types:Internal arising from within the company;
and External arising from extraneous factors such as industry size.
22. Equilibrium
the condition of a system in which all competing influences are balanced, in a
wide variety of contexts
23. Flag of Convenience
describes the business practice of registering a merchant ship in a sovereign state different from that of
the ship's owners, and flying that state's civil ensign on the ship. Ships are registered under flags of
convenience to reduce operating costs or avoid the regulations of the owner's country. The closely related
term open registry is used to describe an organization that will register ships owned by foreign entities.
The term "flag of convenience" has been in use since the 1950s, and it refers to the civil ensign a ship
flies in order to indicate its country of registration or flag state. A ship operates under the laws of its flag
state, and these laws are used if the ship is involved in an admiralty case.

24. Foreign Exchange

Foreign exchange may refer to:

Finance[edit source | editbeta]
Foreign exchange markets, where money in one currency is exchanged for
another
Exchange rate, the price for which one currency is exchanged for another
Foreign exchange reserves, holdings of other countries' currencies

Foreign exchange controls, controls imposed by a government on the

purchase/sale of foreign currencies
Retail foreign exchange platform, speculative trading of foreign exchange by
individuals using electronic trading platforms
Foreign exchange risk, arises from the change in price of one currency against
another
International trade, the exchange of goods and services across national
boundaries
Foreign exchange company, a broker that offers currency exchange and
international payments
Bureau de change, a business whose customers exchange one currency for
another
Currency pair, the quotation of the relative value of a currency unit against the
unit of another currency in the foreign exchange market
Digital currency exchanger, market makers which exchange fiat currency for
electronic money

25. Freight Derivatives

A financial instrument's value that is derived on the future levels of freight rates,
such as "dry bulk" carrying rates and oil tanker rates. Freight derivatives are used
most often by end users (such as ship owners and grain-houses) and by
suppliers (such as integrated oil companies and international trading
corporations) to mitigate risk and hedge against price spikes in the supply chain.
As with all derivatives, market speculators, like hedge funds and individual
traders, participate in both the buying and selling of these contracts providing for
a new, more liquid, marketplace.
26. Gross Domestic Product
is the market value of all officially recognized final goods and services produced
within a country in a given period of time. GDP per capita is often considered an
indicator of a country'sstandard of living;[2][3]
GDP per capita is not a measure of personal income (See Standard of living and
GDP). Under economic theory, GDP per capita exactly equals the gross domestic
income (GDI) per capita (See Gross domestic income).
GDP is related to national accounts, a subject in macroeconomics. GDP is not to
be confused with gross national product (GNP) which allocates production based
on ownership.
27. Gross National Product

is the market value of all officially recognized final goods and services produced within a country in a
given period of time. GDP per capita is often considered an indicator of a country'sstandard of living;[2][3]
GDP per capita is not a measure of personal income (See Standard of living and GDP). Under economic
theory, GDP per capita exactly equals the gross domestic income (GDI) per capita (See Gross domestic
income).
GDP is related to national accounts, a subject in macroeconomics. GDP is not to be confused with gross
national product (GNP) which allocates production based on ownership.

28. Hedging
is an investment position intended to offset potential losses/gains that may be incurred by a companion
investment. In simple language, a hedge is used to reduce any substantial losses/gains suffered by an
individual or an organization.
A hedge can be constructed from many types of financial instruments, including stocks, exchange-traded
funds, insurance, forward contracts, swaps,options, many types of over-thecounter and derivative products, and futures contracts.
Public futures markets were established in the 19th century[1] to allow transparent, standardized, and
efficient hedging of agricultural commodity prices; they have since expanded to include futures
contracts for hedging the values of energy, precious metals, foreign currency, and interest
rate fluctuations.

29. Hong Kong Convention

The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of
Ships, 2009 (the Hong Kong Convention), was adopted at a diplomatic conference held in Hong
Kong, China, from 11 to 15 May 2009, which was attended by delegates from 63 countries.
The Convention is aimed at ensuring that ships, when being recycled after reaching the end of their
operational lives, do not pose any unnecessary risks to human health, safety and to the
environment.

30. Inflation
inflation is a rise in the general level of prices of goods and services in
an economy over a period of time.[1] When the general price level rises, each unit
of currency buys fewer goods and services. Consequently, inflation reflects a
reduction in the purchasing power per unit of money a loss of real value in the
medium of exchange and unit of account within the economy.[2][3] A chief measure
of price inflation is the inflation rate, the annualized percentage change in a
general price index (normally the consumer price index) over time.[4]
31. Initial Public Offering (IPO)

initial public offering (IPO) or stock market launch is a type of public

offering where shares of stock in a company are sold to the general public, on
a securities exchange, for the first time. Through this process, a private
company transforms into a public company. Initial public offerings are used by
companies to raise expansion capital, to possibly monetize the investments of
early private investors, and to become publicly traded enterprises. A company
selling shares is never required to repay the capital to its public investors. After
the IPO, when shares trade freely in the open market, money passes between
public investors. Although an IPO offers many advantages, there are also
significant disadvantages. Chief among these are the costs associated with the
process, and the requirement to disclose certain information that could prove
helpful to competitors, or create difficulties with vendors. Details of the proposed
offering are disclosed to potential purchasers in the form of a lengthy document
known as a prospectus. Most companies undertaking an IPO do so with the
assistance of an investment banking firm acting in the capacity of anunderwriter.
Underwriters provide a valuable service, which includes help with correctly
assessing the value of shares (share price), and establishing a public market for
shares (initial sale). Alternative methods such as the dutch auction have also
been explored. In terms of size and public participation, the most notable
example of this method is the Google IPO.[1] China has recently emerged as a
major IPO market, with several of the largest IPOs taking place in that country.
32. Internal Rate of Return (IRR)
- The internal rate of return on an investment or project is the "annualized effective
compounded return rate" or "rate of return" that makes the net present value (NPV as
NET*1/(1+IRR)^year) of all cash flows (both positive and negative) from a particular
investment equal to zero. It can also be defined as the discount rate at which the present
value of all future cash flow is equal to the initial investment or in other words the rate at
which an investment breaks even.

In more specific terms, the IRR of an investment is the discount rate at which
the net present value of costs (negative cash flows) of the investment equals
the net present value of the benefits (positive cash flows) of the investment.
IRR calculations are commonly used to evaluate the desirability of investments or
projects. The higher a project's IRR, the more desirable it is to undertake the
project. Assuming all projects require the same amount of up-front investment,
the project with the highest IRR would be considered the best and undertaken
first.
A firm (or individual) should, in theory, undertake all projects or investments
available with IRRs that exceed the cost of capital. Investment may be limited by
availability of funds to the firm and/or by the firm's capacity or ability to manage
numerous projects.
33. Intra-Port Competition

- widely regarded as beneficial, for the competitiveness of ports, for local and
national economies and for consumers and exporting industries. The aim of the
paper is to analyse the benefits resulting from the presence of intra-port
competition. Even though this issue has been addressed before, a thorough and
complete overview of the effects of intra-port competition, enabling conditions for
intra-port competition and policies in case of lacking intra-port competition are
absent. The paper presents first a short overview of previous studies dealing with
intra-port competition. Second, it discusses the two main arguments underlying
the benefits of intra-port competition. In this context, attention is given to the
relation between intra-port and inter-port competition. Third, the paper examines
the conditions under which these arguments are valid and intra-port competition
can be introduced. Possible policy responses to limited or absent intra-port
competition are discussed in this section as well. Fourth, the need to introduce
effects of intra-port competition in port modelling is briefly. Finally, the paper
presents empirical evidence of the effects of intra-port competition.
34. Inventory Certificate
- A document of verification provided by management to an auditor of
the status of
the company's inventory including quantity, classification, condition, valuation an
d the methods for determining each. The auditor will use the certificate as the
basis of its own investigation into its accuracy.
Read more: http://www.businessdictionary.com/definition/inventorycertificate.html#ixzz2clBKHhJq
35. Landlord Port
- At a landlord port, the port authority builds the wharves, which it then rents or
leases to a terminal operator (usually a stevedoring company). The operator
invests in cargo-handling equipment (forklifts, cranes, etc), hires longshore
laborers to operate such lift machinery and negotiates contracts with ocean
carriers (steamship services) to handle the unloading and loading of ship
cargoes.
36. Liquidity
- . The degree to which an asset or security can be bought or sold in the market
without affecting the asset's price. Liquidity is characterized by a high level of
trading activity. Assets that can be easily bought or sold are known as liquid
assets.
2. The ability to convert an asset to cash quickly. Also known as "marketability."

There is no specific liquidity formula; however, liquidity is often calculated by

using liquidity ratios.
37. LNG vessel
38. MARINA
39. Market Based Measure (MBM)
Market-based measures include: emissions trading, emission related levies charges and taxes, and emissions offsetting; all of which aim to contribute to the
achievement of specific environmental goals, at a lower cost, and in a more
flexible manner, than traditional command and control regulatory measures.
Market-based measures are among the elements of a comprehensive mitigation
strategy to address greenhouse gas (GHG) emissions from international aviation
that are being considered by ICAO.
40. Monopoly
exists when a specific person or enterprise is the only supplier of a particular commodity (this
contrasts with a monopsony which relates to a single entity's control of a market to purchase a
good or service, and witholigopoly which consists of a few entities dominating an industry).
[2]
Monopolies are thus characterized by a lack of economic competition to produce
the good or service and a lack of viable substitute goods.[3] The verb "monopolize" refers to
the process by which a company gains the ability to raise prices or exclude competitors. In
economics, a monopoly is a single seller. In law, a monopoly is a business entity that has
significant market power, that is, the power to charge high prices. [4] Although monopolies may be
big businesses, size is not a characteristic of a monopoly. A small business may still have the
power to raise prices in a small industry (or market).[5]

41. Monopsony
s a market form in which only one buyer faces many sellers.
In the microeconomic theory of imperfect competition, the monopsonist is
assumed to be able to dictate terms to its suppliers, as the only purchaser of a
good or service, much in the same manner that a monopolist is said to control
the market for its buyers in a monopoly, in which only one seller faces many
buyers.
In addition to its use in microeconomic theory, monopsony and monopsonist are
descriptive terms often used to describe a market where a single buyer
substantially controls the market as the major purchaser of goods and services.
Examples include the military industry[1] and the space industry.[2] The Railways is
the only industry that can be characterized as both a Monopoly and a
Monopsony.
42. New Arctic Shipping Routes

a shortcut between Asia and Europe along Russia's Arctic Ocean coast. This
marks the first time oil-derived products have been moved in such large volume
through what maritime explorers of centuries past dubbed the Northeast
Passage.
43. Newbuilding
44. Oligopoly
Oligopoly is a common market form where a small number of firms are in competition. As a quantitative
description of oligopoly, the four-firm concentration ratio is often utilized. This measure expresses the
market share of the four largest firms in an industry as a percentage. For example, as of fourth quarter
2008, Verizon, AT&T, Sprint, and T-Mobile together control 89% of the US cellular phone market.
Oligopolistic competition can give rise to a wide range of different outcomes. In some situations, the firms
may employ restrictive trade practices (collusion, market sharing etc.) to raise prices and restrict
production in much the same way as a monopoly. Where there is a formal agreement for such collusion,
this is known as a cartel. A primary example of such a cartel is OPEC which has a profound influence on
the international price of oil.

45. Panamax
Panamax and New Panamax are terms for the size limits for ships traveling
through the Panama Canal. Formally, these limits and requirements are
published by the Panama Canal Authority (ACP), titled "Vessel Requirements".
[1]
These requirements also describe topics like exceptional dry seasonal limits,
propulsion, communications, and detailed ship design.
The allowable size is limited by the width and length of the
available lock chambers, by the depth of water in the canal, and by the height of
the Bridge of the Americas since that bridge's construction. These dimensions
give clear parameters for ships destined to traverse the Panama Canal and have
influenced the design of cargo ships, naval vessels, and passenger ships.
Panamax specifications have been in effect since the opening of the canal in
1914. Ships that do not fall within the Panamax-sizes are called post-Panamax.
In 2009 the ACP published the "New Panamax" [2] that will be in effect when the
canal's third set of locks, larger than the current two, becomes operational in
2015.
46. Payback
Payback period in capital budgeting refers to the period of time required for the return on an investment
to "repay" the sum of the original investment. For example, a $1000 investment which returned $500 per
year would have a two year payback period. The time value of money is not taken into account. Payback
period intuitively measures how long something takes to "pay for itself." All else being equal, shorter
payback periods are preferable to longer payback periods. Payback period is widely used because of its
ease of use despite the recognized limitations described below.

The term is also widely used in other types of investment areas, often with respect to energy
efficiency technologies, maintenance, upgrades, or other changes. For example, a compact
fluorescent light bulb may be described as having a payback period of a certain number of years or
operating hours, assuming certain costs. Here, the return to the investment consists of reduced operating
costs. Although primarily a financial term, the concept of a payback period is occasionally extended to
other uses, such as energy payback period (the period of time over which the energy savings of a project
equal the amount of energy expended since project inception); these other terms may not be
standardized or widely used.
Payback period as a tool of analysis is often used because it is easy to apply and easy to understand for
most individuals, regardless of academic training or field of endeavour. When used carefully or to
compare similar investments, it can be quite useful. As a stand-alone tool to compare an investment to
"doing nothing," payback period has no explicit criteria for decision-making (except, perhaps, that the
payback period should be less than infinity).
The payback period is considered a method of analysis with serious limitations and qualifications for its
use, because it does not account for the time value of money, risk, financing or other important
considerations, such as the opportunity cost. Whilst the time value of money can be rectified by applying
a weighted average cost of capital discount, it is generally agreed that this tool for investment decisions
should not be used in isolation. Alternative measures of "return" preferred by economists are net present
value and internal rate of return. An implicit assumption in the use of payback period is that returns to the
investment continue after the payback period. Payback period does not specify any required comparison
to other investments or even to not making an investment.

47. Philippine Ports Authority

48. Philippine Stock Exchange
The Philippine Stock Exchange (Filipino: Pamilihang Sapi ng Pilipinas)
(PSE: PSE) is the national stock exchange of the Philippines, one of the oldest
stock exchanges in Southeast Asia, having been in continuous operation since its
inception in 1927. It currently maintains two trading floors, one at its
headquarters at the PSE Plaza Ayala Triangle, Ayala Tower One in Makati City's
Central Business District, and one at the Philippine Stock Exchange Centre
(Tektite Towers), Ortigas Center in Pasig City. The PSE is composed of a 15-man
Board of Directors, chaired by Jos T. Pardo.
The main index for PSE is the PSE Composite Index or PSEi, which is composed
of thirty (30) listed companies. The selection of companies in the PSEi is based
on a specific set of criteria. There are also six additional sector-based indices.
Trading on the PSE trading starts at 9:30 am PHT and ends at 12:00 pm, pauses
for a 1 hour 30 minute break, and resumes trading from 1:30 pm to a 3:30 pm
session closure.
49. Private Placement

(or non-public offering) is a funding round of securities which are sold not through a public offering, but
rather through a private offering, mostly to a small number of choseninvestors.[1] "Private placement"
usually refers to non-public offering of shares in a public company (since, of course, any offering of
shares in a private company is and can only be a private offering).
PIPE (private investment in public equity) deals are one type of private placement. SEDA (standby equity
distribution agreement) is also a form of private placement.

50. Recession
a recession is a business cycle contraction, a general slowdown in economic activity.[1]
[2]
Macroeconomic indicators such as GDP(Gross Domestic Product), employment, investment
spending, capacity utilization, household income, business profits, and inflation fall, while bankruptcies
and the unemployment rate rise.
Recessions generally occur when there is a widespread drop in spending (an adverse demand shock).
This may be triggered by various events, such as a financial crisis, an external trade shock, an
adverse supply shock or the bursting of an economic bubble. Governments usually respond to recessions
by adopting expansionary macroeconomic policies, such as increasing money supply, increasing
government spending and decreasing taxation.

51. Return on Investment (ROI)

is the concept of an investment of some resource yielding a benefit to the
investor. A high ROI means the investment gains compare favorably to
investment cost. As a performance measure, ROI is used to evaluate the
efficiency of an investment or to compare the efficiency of a number of different
investments.[1] In purely economic terms, it is one way of considering profits in
relation to capital invested.
52. Risk Management
is the identification, assessment, and prioritization of risks (defined in ISO 31000 as the effect of
uncertainty on objectives, whether positive or negative) followed by coordinated and economical
application of resources to minimize, monitor, and control the probability and/or impact of unfortunate
events[1] or to maximize the realization of opportunities. Risks can come from uncertainty in financial
markets, threats from project failures (at any phase in design, development, production, or sustainment
life-cycles), legal liabilities, credit risk, accidents, natural causes and disasters as well as deliberate attack
from an adversary, or events of uncertain or unpredictable root-cause. Several risk
management standards have been developed including the Project Management Institute, the National
Institute of Standards and Technology, actuarial societies, and ISO standards.[2][3] Methods, definitions and
goals vary widely according to whether the risk management method is in the context of project
management, security, engineering, industrial processes, financial portfolios, actuarial assessments, or
public health and safety.
The strategies to manage threats (uncertainties with negative consequences) typically include transferring
the threat to another party, avoiding the threat, reducing the negative effect or probability of the threat, or

even accepting some or all of the potential or actual consequences of a particular threat, and the
opposites for opportunities (uncertain future states with benefits).
Certain aspects of many of the risk management standards have come under criticism for having no
measurable improvement on risk, whether the confidence in estimates and decisions seem to increase. [1]

53. Salvage Value

Salvage value is the estimated resale value of an asset at the end of its useful life. You subtract salvage
value from the cost of a fixed asset to determine the amount of the asset cost that will be depreciated.
Thus, salvage value is used as a component of the depreciation calculation.

For example, ABC Company buys an asset for $100,000, and estimates that its
salvage value will be $10,000 in five years, when it plans to dispose of the asset.
This means that ABC will depreciate $90,000 of the asset cost over five years,
leaving $10,000 of the cost remaining at the end of that time. ABC expects to
then sell the asset for $10,000, which will eliminate the asset from ABC's
accounting records.
If it is too difficult to determine a salvage value, or if the salvage value is
expected to be minimal, then you do not have to include a salvage value in your
depreciation calculations. Instead, simply depreciate the entire cost of the fixed
asset over its useful life. You would then recognize any proceeds from the
eventual disposition of the asset as a gain.
The salvage value concept can be used in a fraudulent manner to estimate a
high salvage value for certain assets, which results in the under-reporting of
depreciation and therefore of higher profits than would normally be the case.
Salvage value is not discounted to its present value.
54. Shipbrokers
Shipbroking is a financial service, which forms part of the global shipping industry. Shipbrokers are
specialist intermediaries/negotiators (i.e. brokers) betweenshipowners and charterers who use ships to
transport cargo, or between buyers and sellers of ships.
Some brokerage firms have developed into large companies, incorporating departments specialising in
various sectors, e.g. Dry Cargo Chartering, Tanker Chartering, Container Chartering, Sale & Purchase,
Demolition and Research. Other "boutique" companies concentrate on specific sectors of the shipping
market.
The principal shipping and shipbroking centres are London, New York and Singapore. Tokyo has a
longstanding tradition in shipping/shipbroking, which is now more focussed on Japanese domestic trade.
Other places continue to develop in international shipping services, such as: Hong
Kong, Shanghai, Delhi andMumbai; Copenhagen, Geneva, Genoa, Hamburg, Oslo, Paris and Piraeus in
Europe; and in North America, Connecticut, Houston and Montreal are important shipbroking centres.

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

55. Stagflation
Stagflation, a portmanteau of stagnation and inflation, is a term used
in economics to describe a situation where an inflation rate is high, the economic
growth rate slows down, and unemployment remains steadily high. It raises a
dilemma for economic policy since actions designed to lower inflation may
exacerbate unemployment, and vice versa.
The term is generally attributed to a British politician who became chancellor of
the exchequer in 1970, Iain Macleod, who coined the phrase in his speech
to Parliament in 1965.[1][2][3][4] [notes 1]
In the version of Keynesian macroeconomic theory which was dominant between
the end of WWII and the late-1970s, inflation and recession were regarded as
mutually exclusive, the relationship between the two being described by
the Phillips curve. Stagflation is very costly and difficult to eradicate once it starts,
in human terms as well as in budget deficits.
In the political arena, one measure of stagflation, termed the Misery
Index (derived by the simple addition of the inflation rate to the unemployment
rate), was used to swing presidential elections in the United States in 1976 and
1980.
56. Supply and Demand
In microeconomics, supply and demand is an economic model of price determination in a market. It
concludes that in a competitive market, the unit pricefor a particular good will vary until it settles at a point
where the quantity demanded by consumers (at current price) will equal the quantity supplied by
producers (at current price), resulting in an economic equilibrium for price and quantity.
The four basic laws of supply and demand are:[1]
1. If demand increases and supply remains unchanged, a shortage occurs, leading to a higher
equilibrium price.
2. If demand decreases and supply remains unchanged, a surplus occurs, leading to a lower
equilibrium price.
3. If demand remains unchanged and supply increases, a surplus occurs, leading to a lower
equilibrium price.
4. If demand remains unchanged and supply decreases, a shortage occurs, leading to a higher
equilibrium price.

57. Tariff Policy

A tariff policy is a strategy of taxing imported or exported goods and services from one country to
another. These taxes often seek to protect domestic industries or punish countries for policies
related or unrelated to the economy. Considered by friendlier countries to be a barrier to production
and positive interaction, some countries have created exceptions to their tariff policies known as free
trade agreements or free trade zones.
The primary focus of a tariff policy is to protect a domestic industry from a comparable foreign import
that would otherwise be available at a much cheaper price. For example, if a country is trying to
increase its automobile production, allowing in less expensive vehicles of similar quality in would
stunt that industrial development. Therefore, a tariff policy may be enacted as a way to give the
fledgling domestic industry a chance.
Suggest Edits
A tariff policy may be directed at a certain product or, to a lesser extent, at certain countries. A
country may seek to impose economic sanctions on another country as a punitive measure, for
example. The goal is to use economic pressures to encourage reform and change. In some cases, a
tariff may be retaliatory to counter a tariff the other country has imposed.

58. Time Charter Average (TCA)

Time charter equivalent revenues, or TCE revenues, is a standard shipping
industry measure of revenue after deducting out direct expenses of operating a
ship. Voyage expenses usually consist primarily of port, canal and fuel costs that
are unique to a particular voyage, which would otherwise be paid by the charterer
under a time charter contract, as well as commissions. TCE is also net of
any forward freight agreements (FFAs) the company may have entered into as
hedges against spot market rates.
59. Tool Port.
60. Throughput
Throughput is the movement of inputs and outputs through a production process. Without access to and
assurance of a supply of inputs, a successful business enterprise would not be possible. [1]
In the business management Theory of Constraints, throughput is the rate at which a system achieves
its goal. Often this is monetary revenue and is in contrast to output, which is inventory that may be sold
or stored in a warehouse. In this case throughput is measured by revenue received (or not) at the point
of saleexactly the right time. Output that becomes part of the inventoryin a warehouse may mislead
investors or others about the organizations condition by inflating the apparent value of its assets.
The Theory of Constraints and throughput accounting explicitly avoid that trap.

Throughput can be best described as the rate at which a system generates its products / services per unit
of time. Businesses often measure their throughput using a mathematical equation known as Little's Law,
which is related to inventories and process time: time to fully process a single product.
Using Little's Law, one can calculate throughput with the equation:
,
where I is the number of units contained within the system, Inventory; T is the time it takes for all the
inventory to go through the process, Flow Time; and R is the rate at which the process is delivering
throughput, Flow Rate or Throughput. If you solve for R, you will get:

ESSAY TOPICS
1. On Political-Legal issues Bassel Convention and Hong Kong Convention
The development of the Hong Kong Convention
The Hong Kong International Convention for the Safe and Environmentally
Sound Recycling of Ships, 2009 (the Hong Kong Convention), was adopted at a
diplomatic conference held in Hong Kong, China, from 11 to 15 May 2009, which
was attended by delegates from 63 countries.
The Convention is aimed at ensuring that ships, when being recycled after
reaching the end of their operational lives, do not pose any unnecessary risks to
human health, safety and to the environment.

The Hong Kong Convention intends to address all the issues around ship
recycling, including the fact that ships sold for scrapping may contain
environmentally hazardous substances such as asbestos, heavy metals,
hydrocarbons, ozone-depleting substances and others. It also addresses
concerns raised about the working and environmental conditions at many of the
world's ship recycling locations.
The text of the Hong Kong Convention was developed over three and a half
years, with input from IMO Member States and relevant non-governmental
organizations, and in co-operation with the International Labour Organization and
the Parties to the Basel Convention.

Regulations in the new Convention cover: the design, construction, operation and
preparation of ships so as to facilitate safe and environmentally sound recycling
without compromising the safety and operational efficiency of ships; the
operation of ship recycling facilities in a safe and environmentally sound manner;
and the establishment of an appropriate enforcement mechanism for ship
recycling, incorporating certification and reporting requirements.
Upon entry into force of the Hong Kong Convention, ships to be sent for recycling
will be required to carry an inventory of hazardous materials, which will be
specific to each ship. An appendix to the Convention provides a list of hazardous
materials the installation or use of which is prohibited or restricted in shipyards,
ship repair yards, and ships of Parties to the Convention. Ships will be required
to have an initial survey to verify the inventory of hazardous materials, additional
surveys during the life of the ship, and a final survey prior to recycling.
Ship recycling yards will be required to provide a "Ship Recycling Plan",
specifying the manner in which each ship will be recycled, depending on its
particulars and its inventory. Parties will be required to take effective measures to
ensure that ship recycling facilities under their jurisdiction comply with the
Convention.
The following guidelines have been developed and adopted to assist States in
the early implementation of the Conventions technical standards:
2011 Guidelines for the Development of the
Inventory of Hazardous Materials, adopted by
resolution MEPC.197(62);
-

2011 Guidelines for the Development of the

Ship Recycling Plan, adopted by
resolution MEPC.196(62);

2012 Guidelines for Safe and Environmentally

Sound Ship Recycling, adopted by
resolution MEPC.210(63); and

2012 Guidelines for the Authorization of Ship

Recycling Facilities, adopted by
resolution MEPC.211(63).
Also two further guidelines have been developed and adopted to assist States in
the implementation of the Convention after it enters into force:
2012 Guidelines for the survey and certification of ships under the
Hong Kong Convention, adopted by resolution MEPC.222(64); and
-

2012 Guidelines for the inspection of ships under the Hong Kong

Convention, adopted by resolution MEPC.223(64).

Entry into force criteria
The Convention is open for accession by any State. It will enter into force
24 months after the date on which 15 States, representing 40 per cent of world
merchant shipping by gross tonnage, have either signed it without reservation as
to ratification, acceptance or approval or have deposited instruments of
ratification, acceptance, approval or accession with the Secretary-General.
Furthermore, the combined maximum annual ship recycling volume of those
States must, during the preceding 10 years, constitute not less than 3 per cent of
their combined merchant shipping tonnage. For more detailed information
please refer to resolution MEPC.178(59) on the calculation of the recycling
capacity for meeting the entry-into-force conditions of the Hong Kong Convention
and document MEPC 64/INF.2 on the same topic.
Historic background
IMOs role in the recycling of ships, the terminology used to refer to ship
scrapping, was first raised at the 44th MEPC session in March 2000 following
which a correspondence group was established to research this issue and
provide information about current ship recycling practices and suggestions on the
role of IMO.
Guidelines were developed by the Marine Environment Protection Committee
(MEPC) and finalized at the MEPC 49th session in July 2003. These guidelines
were adopted as the: Guidelines on Ship Recycling by the 23rd Assembly in
November-December 2003 by resolution A.962(23) and were subsequently
amended by resolution A.980(24).
Resolution A.962(23) IMO Guidelines on Ship Recycling give advice to all
stakeholders in the recycling process, including administrations of ship building
and maritime equipment supplying countries, flag, port and recycling States, as
well as intergovernmental organizations and commercial bodies such as
shipowners, ship builders, repairers and recycling yards.
The guidelines noted that, in the process of recycling ships, virtually nothing goes
to waste. The materials and equipment are almost entirely reused. Steel is
reprocessed to become, for instance, reinforcing rods for use in the construction
industry or as corner castings and hinges for containers. Ships' generators are
reused ashore. Batteries find their way into the local economy. Hydrocarbons on
board become reclaimed oil products to be used as fuel in rolling mills or brick
kilns. Light fittings find further use on land. Furthermore, new steel production

from recycled steel requires only one third of the energy used for steel production
from raw materials. Recycling thus makes a positive contribution to the global
conservation of energy and resources and, in the process, employs a large, if
predominantly unskilled, workforce. Properly handled, ship recycling is, without
question, a "green" industry. However, the guidelines also recognized that,
although the principle of ship recycling may be sound, the working practices and
environmental standards in the yards often leave much to be desired. While
ultimate responsibility for conditions in the yards has to lie with the countries in
which they are situated, other stakeholders must be encouraged to contribute
towards minimising potential problems in the yards.
The Guidelines on Ship Recycling also introduced the concept of a "Green
Passport" for ships. It was envisaged that this document, containing an inventory
of all materials used in the construction of a ship that are potentially hazardous to
human health or the environment, would accompany the ship throughout its
working life. Produced by the shipyard at the construction stage and passed to
the purchaser of the vessel, the document would be in a format that would
enable any subsequent changes in materials or equipment to be recorded.
Successive owners of the ship would maintain the accuracy of the Green
Passport and incorporate into it all relevant design and equipment changes, with
the final owner delivering it, with the vessel, to the recycling yard.
Subsequently, at its 53rd session in July 2005, the Marine Environment
Protection Committee (MEPC) agreed that the IMO should develop, as a high
priority, a new instrument on recycling of ships with a view to providing legally
binding and globally applicable ship recycling regulations for international
shipping and for recycling facilities. MEPC 53 also agreed that the new IMO
instrument on ship recycling should include regulations for the design,
construction, operation and preparation of ships so as to facilitate safe and
environmentally sound recycling, without compromising the safety and
operational efficiency of ships; the operation of ship recycling facilities in a safe
and environmentally sound manner; and the establishment of an appropriate
enforcement mechanism for ship recycling (certification/reporting requirements).
MEPC 53 further agreed that the above-mentioned instrument should be
completed in time for its consideration and adoption in the biennium 2008-2009.
The IMO Assembly in November-December 2005 subsequently agreed that IMO
should develop a new legally-binding instrument on ship recycling. Assembly
resolution A.981(24) New legally-binding instrument on Ship Recycling requested
the Marine Environment Protection Committee to develop a new instrument that
would provide regulations for:

the design, construction, operation and preparation of ships so as

to facilitate safe and environmentally sound recycling, without
compromising the safety and operational efficiency of ships;

the operation of ship recycling facilities in a safe and

environmentally sound manner; and

the establishment of an appropriate enforcement mechanism for

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

2. On Operational issues, Port Operations

3. On Financial issues, Financial Ratios of a Shipping Company
4. On Labor issues, future Demand and Supply
Forecast of Future Labor Supply and Demand
Over the next several years, the Federal Government will experience the largest
unplanned exodus of middle and senior management talent in the history of our nation
as significant numbers of older workers currently in federal service become retirementeligible. It is not known whether these departures will be as cataclysmic as a tsunami, or
will instead ebb and flow over a greater number of years as the Baby Boomer
generation times their retirements to meet individual life choices. Nor is it fully
understood yet how the recent economic turmoil will impact federal retirements. No
matter what the scenario, eventually the need to replace outgoing expertise, and also to
fill newly created jobs, will result in a significant demand for talent within the labor
market. This chapter provides a discussion of several labor force trends and their
potential impact on IT workforce management.
MAKING SENSE OF FEDERAL RETIREMENT PROJECTIONS
Federal workforce retirement behavior is influenced by a variety of individual and
environmental factors. The first is individual retirement eligibility, which is based on the
type of retirement system, age of the employee, length of service and minimum

retirement age. Retirement decisions are further dependent on how individuals prioritize
work, based on several factors that could include hours spent at work, desire for variety,
financial needs, willingness to learn, and level of acceptable responsibility. 1 Additionally,
advancements in technology significantly influence individual career decisions of
personnel in IT-related career fields who may be either positively or negatively impacted
by changing technology.
External environment influencers include the state of the economy and labor market
demands, neither of which can be controlled by the employee. Finally, the traditional
retirement model of employees ending their career after reaching their peak status is
gradually shifting to new models of retirement. The interplay of all of these changeable
conditions creates challenges in modeling predictive retirement behavior. The following
retirement statistics (calculated prior to the recent economic recession) are provided as
points of reference:
From FY2006FY2016, there will be 956,613 retirement-eligible employees
throughout the Federal Government, but only 586,339 are predicted to retire
during that period.2
The average (or mean) continued federal employment after reaching retirement
eligibility is 3.1 years, which can be further refined to 3.3 years for males and 2.7
years for females.3
Fifty-one percent of employees remain in the Federal Government 4 years after
first becoming eligible for retirement, with approximately half of this group
continuing to work for 9 more years.4
Nation-wide and global financial reversals have contributed to significant drops in home
equity and retirement fund valuations. The recession, as well as the Boomers longer life
expectancy, are causing many individuals to delay retirement, or to consider never
retiring, as indicated in several surveys sponsored by the American Association of
Retired People (AARP). This increasingly apparent trend has led BusinessWeek
magazine to label the Boomers as Gen U, or Generation Unretired. 5
U.S. LABOR MARKET FORECAST: DEMAND UP AND SUPPLY DOWN
The U.S. labor force annual growth rate peaked in the 1970s at 2.6% and has been
decreasing with each subsequent decade, largely due to declining birth rates and the
stabilization of the number of women entering the labor market. 6,7 From 1996 to 2006,
the growth rate declined to 1.2% and it is expected to further decrease to 0.8% between
20062016.8 As the Nations need to recruit replacement workers increases, efforts will
be challenged by this further slowdown in the growth of the U.S. labor force.
Over the next decade, the projected labor force participation rate by age shows
significant variation. The number of workers in the age range of 55 and older
participating in the labor force is projected to be the fastest growing age group, from
38% in 2006 to 42.8% in 2016.9 Meanwhile, the amount of new entrants coming fresh
from campuses is growing at a lower rate than workers who have been in the labor

force for some time. In addition to targeting the Net Generation for recruitment, agency
strategic workforce planning efforts will also need to factor in ways to retain and recruit
older workers.10 The challenge will be balancing workforce experience sustainability and
re-growth. More information about workforce planning can be found in Chapter 4.
IT OCCUPATIONAL TRENDS
The Department of Labor has analyzed IT occupations across industry, developing
detailed statistics on the 2008 U.S. labor force and projecting IT occupational trends
through 2018.11 A descriptive summary of the IT occupations included in these
projections is listed in Figure 3.1; more detailed information is listed in Appendix D.
New IT jobs creation is being driven by changing technologies and the increasing
demand for secure, trusted data and systems. Network Systems/Data Communications
Analysts and Computer Applications Software Engineers will experience the greatest
percentage of change within their occupations as shown in Figure 3.1. The forecasted
impact on the number of jobs created, by IT occupation is shown in Table 3.1. Rankings
within the two data sets may differ, depending on the size of the occupation (e.g.,
Computer Scientists rank fourth in the percentage of growth, but tenth in the number of
new jobs created). Based on this forecast, from 20082018, Computer Applications
Software Engineers will gain 175,100 new jobs within their occupation, while Computer
Operators will lose 19%, or 20,500 jobs, within their job field. Recruitment for many of
the new jobs created will focus on Net-Gen college graduates who possess the latest
knowledge and skills.

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

2008

2018

Change by
2018

Computer Applications Software Engineers

Network Systems/Data Communications Analysts
Computer Systems Software Engineers
Computer Systems Analysts
Network/Computer System Admins (includes Security
Specialists)
Computer Support Specialists: Tech
Support/Helpdesk Techs
Computer/Information Systems Managers
Computer Specialists, all other
Database Administrators
Computer/Information Scientists, Research
Computer Programmers
Computer Operators

514,800
292,000
394,800
532,200

689,900
447,800
515,000
640,300

175,100
155,800
120,200
108,100

NET INCREASE IN IT JOBS

3,827,3004,618,900791,700

339,500 418,400 78,900

565,700 643,700 78,000
293,000
209,300
120,400
28,900
426,700
110,000

342,500
236,800
144,700
35,900
414,400
89,500

49,500
27,500
24,400
7,000
-12,300
-20,500

Table 3.1 Where the IT Jobs Are

(Source: U.S. Department of Labor, Bureau of Labor Statistics)
EDUCATION
The majority of new IT jobs will require at a minimum a bachelors degree. Technical
degree requirements predominantly will include the Computer Science, Computer
Engineering, Computer Information Systems, and Information Science areas of study.
For more senior level IT jobs, increasingly there is a desire for education that includes
both technology and business skills while some research positions require a PhD.
Two exceptions to the degree requirement are Computer Operators and Computers
Support Specialists/System Administrators. In the case of Computer Operators, on-thejob training may continue to be the norm. As for Computers Support Specialists/System
Administrators, recruitment selection will be driven by strong technical skills and
certifications will be essential.
In the dozen years between 19912003, annual bachelors degrees conferred in
Computer and Information Sciences almost doubled, growing from 25,159 to 57,433,
and then peaked in 2004, with 59,488 degrees conferred; by 2007, graduation rates had
dropped by 30%.12 This trend is troubling, given the expected job growth within this field
and the need for new talent to replace retiring Baby Boomers. Additionally, this field
includes many disciplines that are a source for critical cybersecurity jobs (e.g.,
Computer Networking, Systems Administration, and Information Systems Security).

Table 3.2 highlights the overall projected demand for new IT jobs. Some mitigation may
be possible from redistributing individuals from anticipated Computer Programming and
Computer Operator job decreases, but this action might require additional formal
education for those individuals. Additionally, while general college enrollment rates are
high, the graduation rates are not. In the United States, although 70% of the Net
Generation will start a degree program, only 30% are expected to have a college
degree by age 30.13
The shortfalls described assume all new IT jobs require a four-year degree; in
occupations such as Computer Support Specialist and Database Administrator, twoyear degrees or commercial certifications may be sufficient for some lower skilled jobs.
IT Job Outlook Through 2018

Number of New IT
Jobs

Total Demand (includes total IT job growth)

824,400

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

Table 3.2 Potential IT Growth Requiring A College Education
(Source: U.S. Department of Labor, Bureau of Labor Statistics, Occupational
Outlook Handbook, 2010-11 Edition)
DIVERSITY
The primary dimensions of diversity most typically measured and analyzed in the
federal workforce are age, gender, race, and ethnicity. Since it has been established
previously that a college degree has become a requirement for many federal IT jobs,
this section will focus primarily on the role that college education trends and workplace
attitudes play in achieving gender and racial/ethnic diversity in the labor force.
Workplace impacts from a multi-generational workforce are discussed in Chapter 6.
The Gender Gap - More women have earned degrees than men since the 1980s and,
over the long term, the number of women awarded degrees will continue to outpace
men for associate, bachelors, and masters degrees. 14 From 20072019, the total
number of degrees at all levels is projected to increase for women by 28% as opposed
to 17% for men.15 While women are earning more degrees in general, significant gender
differences exist in the number of women obtaining bachelors degrees in Computer and
Information Sciences and Computer Engineering. Over the long term, the number of
women completing degrees in Computer and Information Sciences has been declining,
while there has been only a marginal increase in the number of women receiving
Computer Engineering degrees as demonstrated by data from the National Center for
Education Statistics:
Computer and Information Sciences and Support Services Degrees Earned by
Women: 29.4% in 1990-91, 27.5% in 1995-96, and 20.6% in 2005-06. 16

Engineering and Engineering Technologies Degrees Earned by Women: 14.1%

in 1990-91, 16.2% in 1995-96, and 17.9% in 2005-06. 17
As a result of these trends, women earn less than a quarter of the degrees conferred for
Computer and Information Sciences and Engineering. Figure 3.2 highlights the
significant gender gaps for degrees compared to the average for all degrees and across
the four major IT fields of study.
While industry can often hire scientists, engineers, and technologists from other
countries to fill talent gaps, the tightening U.S. labor market will be further constrained
for federal agencies by the gender gap in IT education. Also exacerbating the situation,
female scientists, engineers, and technologists who are already in these occupations,
are leaving them due to career shifts. Based on data provided in the the Harvard
Business Review article, Stopping the Exodus of Women in Science, the following
reasons are cited:18
Hostility in the workplace/machismo atmosphere
Sense of isolation
Disconnect with womens preferred work style
Long hours and excessive travel
Lack of sponsors to clarify career advancement
Organizations should examine female attrition in IT technical occupations to determine if
problems exist. At the same time, agencies should encourage female students at the
high school level to pursue IT degrees through such outreach events as the Federal IT
Shadow Day or other high school education initiatives.
In 2008, college enrollment in Computer Science programs saw an upswing for the first
time in six years, increasing 6.2% over 2007. 19 While this is good news, the number of
women graduates remains steady, and diversity within this occupation is still an issue.
Research shows that female and ethnic/racial minority interest in science and math skill
areas may wane as early as sixth grade, presenting a challenge to those federal
organizations and academic institutions actively seeking to improve gender and minority
representation.20

Bachelor Average for All

s Males Degrees
Computer Engineer
Electrical/Electronics
Engineer
Computer/Informatio
n Science
IT Management

42.
5
89.2

Bachelor Average for All

s Females Degrees

57.5

86.4
79.4
71.5

Computer Engineer
Electrical/Electronics
Engineer
Computer/Informatio
n Science
IT Management
Masters Average for All
Males
Degrees
Computer Engineer
Electrical/Electronics
Engineer
Computer/Informatio
n Science
IT Management

10.8
13.6
20.6
28.5
40
74.3
80.1
73.1
68.5

Masters Average for All

60
Females Degrees
Computer Engineer 25.7
Electrical/Electronics
19.9
Engineer
Computer/Informatio
26.9
n Science
IT Management
31.5
Figure 3.2 Percentage of IT Degrees Conferred by Gender for 2005-2006*
(Source: Digest of Education Statistics 2007)
* Computer Engineering also includes Computer Engineering, General, and Computer
Software Engineering. IT Management includes Management Information Systems,
General; Information Resources Management/CIO Training; Knowledge Management;
and other Management Information Systems and Services.
Race/Ethnicity Trends - In 2003, the Hispanic/Latino community became the largest
minority group within the United States. Their growth in population, due to higher birth
rates and increasing immigration rates, will heavily influence the diversity of future
college enrollments. Projected campus diversity between 20062017 includes a 39%
increase in Hispanic enrollment, a 26% increase in both African-American and Asian
enrollments, a 30% increase in American Indian/Alaska Native enrollments and a 5%
increase in White enrollments.21 Currently, African-Americans and Hispanics are
underrepresented on college campuses in general, and Hispanics are also
underrepresented in Computer and Information Sciences and Support Services
majors. Table 3.3 provides a comparison of the largest IT field of study with the general
labor force by race/ethnicity.

2006 IT Bachelors Degrees

Percent Conferred
(excludes non-resident)

Race/Ethnicity

2006 Civilian Labor Force

Percent Distribution

White
67.3
68.2
Black/African-American 13.2
11.4
Hispanic/Latino
7.1
13.7
Asian and All Other
12.4
6.7
Groups
Table 3.3 Diversity Perspective of U.S. Computer/information Science Graduates
Compared to the U.S. Labor Force*
* Race/Ethnicity groupings were aggregated to enable comparison between Department
of Labor data and data contained in Table 275 of the Digest of Education Statistics
2007. Additionally, non-resident data was not included, which increased the percentage
of IT degrees conferred by race/ethnicity. The field of study for Computer and
Information Sciences and Support Services includes: General and Other Computer and
Information Sciences; Artificial Intelligence and Robotics; IT; General, Specific
Applications and Other Computer Programming/Programmer; Data Processing;
Information Science/Studies; Computer Systems Analysis/Analyst; Web Page,
Digital/Multimedia and Information Resources Design; Data Modeling/Warehousing and
Database Administration; Computer Graphics; Computer Software and Media
Applications, Other; Computer Systems Networking and Telecommunications; Systems
Administration/Administrator; System, Networking, and LAN/WAN
Management/Manager; Computer and Information Systems Security; Web/Multimedia
Management and Webmaster; Computer/IT Services Administration and Management;
and Other Computer and Information Sciences and Support Services.
In Figure 3.3, the Computer and Information Sciences and Support Services field of
study is compared to the average for all degrees conferred. This figure illustrates similar
differences as Table 3.3, while also highlighting the higher than average rate of these IT
degrees conferred to non-resident students. International students comprise half of the
total enrollment in graduate-level science and engineering fields, with China and India at
the forefront. In 2004, China made up 14% of the total worldwide international student
population. During this same period, 25.3% of all international students in the United
States were from India and China.22

White

72.4
%
62.9

%
Black/
9.6%
African12.4
American
%
Hispanic/
7.2%
Latino
6.7%
Asian/
6.9%
10.9
Pacific Islander
%
American
.7%
Indian/
Native
.6%
American
Non-Resident 3.1%
6.5%
Figure 3.3 Diversity Perspective of Bachelor's Degrees in Computer/Information
Sciences Compared to All Degrees Conferred in 2005-2006*
(Source: Digest of Education Statistics 2007)
* Computer/Information Science degrees comprise 61.1% of all IT-related degrees. Data
for other IT fields of study was not available by race/ethnicity.
CHALLENGES TO IT SKILLS MANAGEMENT
As organizations try to sustain their IT bench strength, they will face several workforce
management challenges. Labor supply issues previously discussed will create recruiting
and retention issues. At the same time, changing job roles, resulting from the continual
introduction of new technology and evolving work practices, have created a community
that lacks the maturity in skill development processes and defined career paths. 23 IT
leaders engaged in workforce planning and development need to factor in these
variables as they plan for the rising Net-Gen workforce of the future:
Tacit Knowledge Loss - The massive Baby Boomer generation is starting to retire but
little has been done to develop a means to capture tacit knowledge. As this highly
experienced cadre prepares to leave, the demand for replacement skills will be further
exacerbated.
Legacy Applications and Technology Support - The upcoming wave of retirements
will impede the ability of many organizations to maintain skilled workers to support
legacy systems. Some agencies like the Social Security Administration have taken
action to transition to newer programming languages and platforms. 24 Others still view a
technology shift as a long term solution, but the planning for the shift or continued
support will need to occur soon.25 As commercial training or education is no longer
available, new entrants into the labor market typically will not have skills in areas like

mainframes or COBOL programming language to hire as replacements for the retiring

Baby Boomers.26
Technology Rate of Change - The introduction of new technology will continue to
increase, creating a constant need to hire or develop employees with the necessary
skills to meet the demand. Retraining the current workforce and creating a culture of
continuous learning will be fundamental principles for organizations.
IT Hiring Increase - Two thirds of federal agencies listed IT as a mission critical
occupation in 2007 and, near term, Partnership for Public Service estimates rank IT
occupations as one of the top five federal hiring requirements. 27 The U.S. Department of
Labor is projecting 791,700 new IT hires across all sectors, including the Federal
Government, through 2018; Table 3.1 has a breakout of hiring needs by IT occupation. 28
Citizenship Requirement - The growth of the available U.S. labor pool is shrinking and
approximately 25% of the largest growing ethnic group, the Hispanic/Latino population,
are not U.S. citizens. While private industry can leverage immigrants and global talent to
fill crucial talent gaps, the Governments requirement for United States citizenship
restricts the available labor pool. This requirement is not expected to change as the
Federal Government increases its focus on cybersecurity and critical information
infrastructure protection.
Intense Competition for Veterans - As the future labor market continues to constrict
and the demand for talent increases, veterans will become an increasingly sought after
talent pool to fill vacancy needs across government as well as the private sector.
Organizations that have relied on this pipeline of talent will face increased competition.
IT Degree Shortfalls - As previously discussed, the level of students graduating with IT
degrees is less than required to meet future demand and is also being negatively
impacted by the gender imbalance in IT degrees conferred. 29 For 20052006, males
outpaced females in IT Computer Management, Information Sciences, and Support
Services bachelors degrees by over 3 to 1. For Computer Engineering degrees, the
male to female ratio was over 8 to 1.30 This further reduces the supply of available talent
in the labor market. To close the gender gap in IT-related fields of study, significant
intervention would be required at the high school level or earlier.
Less Educated IT Workforce - Currently, Federal Government employees are
significantly better educated than the private sector. As both sectors face greater
turnover, the demand for available IT college graduates will increase, creating the
potential for steep competition. Agencies not able to provide attractive and competitive
job offers may need to re-evaluate degree requirements and offer internal degree
completion incentives.
Changes in Work Environment - The greater use of alternative work plans and
workforce flexibilities, and the expansion of new work models, whether a redefinition of
part-time employees or the implementation of 20-hour work week positions, will create
personnel management challenges as IT leaders adjust to managing employees
working on different schedules.31

Greater Need for Supervisory Expertise - In October 2009, the U.S. Merit Systems
Protection Board (MSPB) provided a report to the President and Congress, focused on
the challenges and opportunities associated with the pending loss of significant
numbers of supervisory personnel in the federal workplace. The MSPB is anticipating
extensive losses as current data indicates that supervisory personnel tend to be older
and have more years of federal experience, thus making them highly likely to retire
during the coming wave of Baby Boomer retirements. 32In addition to noting the loss of
supervisory expertise, the MSPB also described the greater burdens being placed upon
supervisors due to several factors, including changing work structure models which
require more networking and communication; new personnel performance plans
requiring more frequent and detailed observation of individuals performance; and the
increased need to manage continuous learning and competency development in a
knowledge-based workforce.33
Business Value Skill Set - As the focus has shifted to align IT priorities to mission
capabilities, so has the thinking of the right skill mix for IT professionals. The need to
integrate technology into business processes has created a greater desire for business
acumen and interpersonal skills combined with expected technical skills. This will
require a refinement of IT workforce skills and updating of professional development
plans.
Specific IT Skills Gaps - The Federal Chief Information Officers (CIOs) Council, in
partnership with the Office of Personnel Managements Human Capital Leadership and
Merit Systems Accountability Division, has completed three periodic IT workforce
capability assessments focused on the IT workforce. Based on the IT Workforce
Capability Assessment (ITWCA) survey of 2006, four specialized job activities,
enterprise architecture (EA), IT project management, IT security/information assurance,
and solutions architecture, were identified as the highest importance. (The executive
summary can be found at www.cio.gov).
The Association for Federal Information Resources Managements (AFFIRM) Top Ten
Challenges Survey, administered annually to Federal CIOs, identified the ability to hire
and retain skilled IT professionals as their top challenge in both 2007 and 2008, while
also producing similar skill gap results to the ITWCA surveys of individual federal IT
employees.34,35 The five top-ranked skill gaps identified by CIOs in the AFFIRMsponsored survey in 2008 were program management, security, collaborating across
organizational boundaries, EA and strategic planning. Program management, security
and EA also ranked in the top five in 2007 (collaboration and strategic planning were not
including in the skills survey in 2007).
The Computing Technology Industry Association identified the following global skills
priorities in its Summary of Skills Gaps in the Worlds IT Workforce: A CompTIA
International Research Study (www.comptia.org):36

Three most important IT skills gaps: security, general networking, and operating
systems
Widest skill gap proficiency: security, firewalls, and data privacy
Area for most skill growth: radio frequency (RF) mobile and wireless technology.
Other skill growth areas of importance included web-based technologies (Web
2.0, Service-Oriented Architecture (SOA), Software-as-a-Service (SaaS), Rich
Internet Applications (RIAs), Asynchronous JavaScript and XML (Ajax)
techniques, and specific programming languages
THE COMING NET GENERATION EDGE
During the last 50 years, most productivity gains were realized through automation and
technology integration. While software and hardware enhancements will continue to
reduce IT personnel resources required for routine network administration and
maintenance functions, in the future, greater productivity will require a more agile IT
organization. Increasing agility requires improving the ability of people to effectively
respond to the unknown or unexpected; innovating or creating new methods,
processes, or products; simplifying communications and information sharing;
collaborating with others to execute missions and responsibilities; and most crucial, a
supporting culture that inspires imagination and innovation. The agile worker is a good
fit to describe Net-Geners; their energy and perspective will bring a needed dynamic to
IT organizations.
ASSESSING THE IT TALENT WAR
It would be natural to think that with unemployment figures in double digits, job
vacancies would have qualified candidates lining up to fill them and that the time-to-fill
jobs would be greatly reduced; however, neither of these assumptions is proving true.
According to a September 2009 report by Robert Half International and CareerBuilder,
managers continue to face difficulties in finding qualified applicants and the average
time-to-fill job vacancies remains unchanged.37 As Liz Ryan, a columnist for
BusinessWeek, puts it, Now more than ever, employers need the sort of employees
who can wade confidently into a messy business situation (a bollixed up database
integration, a disintegrating tech-support function, or a six-months-delayed product
launch) and clean it up.38 And, Todd Thibodeaux, president and Chief Executive Officer
of the Computing Technology Industry Association, agrees that while there are a
tremendous number of IT individuals looking for work, finding those with the right
qualifications remains challenging.39
As the economy begins to improve, jumpstarting technology projects will be a top
priority of many employers, and CIOs may be looking to improve their current
understaffing.40,41 The problem many managers will face is that even while they look to
expand staff, current employees may see an economic upswing as an opportunity to
jump ship to a new employer, especially if the economy quickly improves. This may be

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