Increasing Investment in eNorway - A Proposal
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by Major Lee Hung
Comrades,
I recently published an article looking at our economic situation and ideas on how we might improve it. Continuing with this I want to start the debate on why investing in eNorway is important. My main idea is that we achieve this through the creation & working of companies through our individual citizens, with state involvement to help with the startup costs.
1.) Profitability
In points 1 to 4, we investigate a scenario where a citizen wants to create a new operation to make some extra money. The first thing that needs looking at is just how profitable it is to create companies in eNorway to begin with.
Note: This assumes we're looking at Svalbard & Jan Mayen.
Fishery (Q3 FRM production)
Initial cost: $5,440
Work as Manager cost: $2.04 per day
Produce Value: $13.28 per day
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Net profit per Fishery: $11.24 per day
At these rates, it would take 1 year and 4 months to see a return. Overall not bad, but to most prospective citizens the return simply takes too long if they don't have much currency to begin with.
2.) Expansion
Assuming our new entrepreneur has run their fishery for a short while and they want to expand. They now create a Q1 food company in the same region...
Q1 Food Factory
Factory cost: $5,440
Work as Manager cost: $4.08 per day (includes Fishery)
Produce value: $33.25 per day
Surplus FRM from the Fishery: $2.64 per day
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Net profit: $31.81 per day
Following this new chained set up, it takes our new entrepreneur just under a year to make their 20 gold total investment back. This is fairly healthy, when you consider a lot of our citizens are several years old.
3.) Further Expansion
But nobody is happy with making a measly $31.81 each day! Let's say our entrepreneur instead goes for 5 fisheries and 5 Q1 food factories at a cost of 100 gold.
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Their investment: $54,400
Their weekly income: $1,113.35 (2 gold p/w equivalent)
Norway's weekly income: $142.80 (through work taxes)
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So as you can see, despite the initial investment the returns can be significant. Our new entrepreneur either has plenty of food to fight with, plenty of money to buy weapons with or maybe even enough money to really start to expand their operation.
So what's the point of this article you ask?
Nobody will disagree that an extra $1.1k of income each week is great. However, our new entrepreneur doesn't actually have $54,400 just sitting around to invest in their new holding.
The benefits to our citizen ('the entrepreneur') are great. The benefits to our economy are great. Importantly, the benefits to our treasury aren't that bad. It just isn't possible without help.
Proposal
Essentially, I propose that we in some way subsidise people who want to create and operate their own "business empire" but don't have the money to do it. As a small country our finances only stretch so far and we need some way of recuperating at least some (if not all) of what's paid - over time. I have three ways we could do this.
1 - Limited Subsidies
We can potentially limit the total subsidies paid to a small percentage of what our citizen wants to invest. For example, contribute only $1k - $2k towards the creation of their fisheries and food factories. We then on the other hand expect nothing back. The state bears some of the weight but most of the burden lies with the citizen.
2 - Tax Policy Change
One radical and likely unpopular method of recuperating the cost is to increase work tax. For example, we could put it to 10%. The treasury would recuperate the money spent on subsidies a lot quicker with no other input required, but all of our citizens would then feel the burden and the profitability would weaken somewhat.
3 - Voluntary Repayments
In this scenario, the citizen repays a certain amount to the state each week. For example, they could repay $20 per week for every fishery and food factory the state helped them to open. This comes at a huge risk to the state - the main one being that our citizen leaves eNorway and/or simply stops paying, leaving the outstanding payments to be written off.
Thanks!
I know this was a long article, but I'd love to hear people's views. Is this sustainable? Can it work? My hope is that I sold the benefits of investing enough for a debate to be started on the need to invest in eNorway.
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Comments
I disagree on the whole investment in eNorway thing, You might as well build it where you get extra bonuses and donate some money to eNorway (like You do 😛 ) and you probably still make more.
I am thinking of writing my own article with my views, might get it out soon. 😛
If you're serious about growing to hundreds of companies then investing in eNorway would certainly harm your profits; but for somebody who mostly just logs in and fights (i.e the average player) and wants a dozen or so small companies to supplement their income, eNorway is the perfect place to do it. Why not help them out if they don't have the money?
If my maths are correct, the equivalent of $4k is flowing out of eNorway every day - meaning to plug that deficit, our citizens are having to sell gold etc.
Would it not be a lot better if we instead had $4k flowing in to eNorway's citizens each day, from the rest of the eWorld? Naturally, my inclination is that we should be aiming to create wealth for our citizens, not lose it.
I appreciate your comment and would love to see the counter-argument as I may be a tad biased... 😉
I like some of the ideas in your previous article, and the idea of investing some of our funds generally, but I also agree somewhat with hans erik. I suggest a slight tweak: rather than investing in eNorway, I suggest investing in eNorwegians. We receive work tax from any eNorwegian wherever they work, so let's let them build where they'll get the best return.
For now, I'd have to oppose raising the work tax. Our current policy is one of the few things that makes being an eNorwegian and doing business here attractive from a practical perspective.
Some combination of 1 & 3 may work, as could some of the ideas in the last article. I'd love to see a deeper dive on your food purchase idea.
The tax rise should definitely be the last resort. It's the "safe" option for ensuring the recovery of state investment but also by far the most harmful. Investing in citizens, to invest in to other countries, could be beneficial but I feel it would be a hard sell to essentially say "we're spending your tax money on foreign companies". If there's enough appetite though it should be considered.
The food purchasing idea I'll get to soon I hope - my main problem with it right now is that it's so open to abuse and I'm hesitant when it comes to red tape by implementing safe guards against said abuse.
This may sound strange, but what about a random number generator? All spreadsheet applications have the function. Basically, we could set it up where we buy a randomized amount of a randomized quality on a randomized day. We can put upper and lower limits on each of these things. This way, producers will still be incentivized to compete on price and have greater incentive to list on the eNorwegian market because in any time interval, the eNorwegian government might decide to buy 13,000 Q4 foods on the 12th day of the month, or 6500 Q2 foods on the 29th day of the month.
I'm willing to trial this with my own money and we can see what effect it has on the economy. The only problem: What do we do with all that food? 😛
Given how thing our markets are, it may take time to show any effects. It would also, imho, be best to pair this with some sort of company building subsidy. Otherwise, you'll basically just be incentivizing our already established players who offer their food all the time now regardless 🙂
Meant to post this here: "I'd suggest we just sell it and keep the profit or loss for the Treasury."
Definitely worth a try! 😉
I really like this idea integer! We could of course sell it on other markets by using trusted citizens who have foreign market licences. We could ask around and see where everyone holds and choose the best markets to sell the food on.
I guess all three of us are making a good team here.
We could open this up to other markets, too, outside of food. We have some really dry ones, such as aircraft and houses. If we passed it as a program, it would be easier to promote, and could encourage players in other countries to offer in eNorway.
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First I want to say how great it is to have more economic discussion here.
I like your idea of limited subsidies I think it could work well actually. Even your 3rd proposal of weekly payments could work well to if we keep them small enough. Sort of an honour system, which guarantees more activity from players who would take advantage of such a program. Of course we couldn't stop someone from leaving and not paying back but thats why scrutinized screening would be put in place if that were to ever come about.
I think part of the problem to is education. When people begin I think a lot of the economic module is rather unclear to people. We've done a good job about educating on houses, perhaps now we should focus on other areas such as areas that can be profitable for people just starting out, or even older players who never got into the economic module before.
The economy module overwhelmed even me when it changed. Suddenly the regional bonuses have changed, there's 'holdings', weird factors like pollution... I'm not even sure if a good guide exists yet to explain all of this in simple terms to somebody just looking to get started up.
Exactly, the more need for a good one.
I support every economical and political debates in a game where it would seem there is no room for different thoughts.