Separating the Truth from the Facts

There was almost a look of horror on Rudy Giuliani‘s face when he realised what he had done in saying “Truth isn’t truth”. His reputation as New York Mayor at its most challenging time, not to say his career as a lawyer, may have been completely undone by this latest pronouncement on behalf of an administration that has increasing difficulty in separating facts from fiction (or “real fakes” from mere “fabrication”?).

“Doh!” Photo Credit: AFP/Getty Images/Saul Loeb

In our post-truth age, one where we have had to accommodate “alternative facts” and “fake news”, language, if not the truth, is usually the first casualty in this war of, and on words themselves.

If one was being charitable, it could be argued that the struggle between “facts” and “truth” is like the difference between structuralism and post-structuralism: so, in the former, words have a finite meaning when used in a particular way or structure; whereas in the latter, the same words can have different meanings depending on the context of the audience.

But rather than critical theory, I think we are actually dealing with a phenomenon I first encountered about 20 years ago, while working in China. A report in the China Daily regarding a constitutional matter that was before the courts said that in order to fully understand the issue, it was “important to separate the truth from the facts…”.

Next week: The party’s over

 

Is this The Conversation we should be having?

Here’s a barbecue topic for Australia Day: What is happening to the quality of public discourse? Over the holidays, I read The Conversation’s 2015 yearbook, “Politics, policy & the chance of change”. It’s a collection of individual articles from the past 12 months, grouped into broad themes, covering key issues of the day, at least among the academic and chattering classes. As a summary of the year in Australian political, economic, cultural and social reportage, it’s not a bad effort. With “news” increasingly bifurcated between a dominant commercial duopoly and a disintermediated social media maelstrom, The Conversation can offer a calm rational voice and an objective alternative.

Screen Shot 2016-01-24 at 6.43.50 PMThe title promises a new direction in political debate, and I went to the book’s Melbourne launch at the start of the summer, where Michelle Grattan, The Conversation’s Chief Political Correspondent held court in an audience Q&A. I was looking forward to the event, because part of The Conversation’s remit is to foster informed debate that is more than tabloid headlines, news soundbites and party room gossip. It has also positioned itself as a non-partisan, independent and authoritative source of news analysis.

I was hoping the Q&A would provide a considered discussion on some of the key policy issues facing the country – long-term tax reform, addressing climate change, updating Federation, dealing with the post-mining boom economy, improving the quality and efficiency of our education, health and infrastructure systems, etc.

Instead, the first three questions from the audience concerned Mal Brough, Ian Macfarlane and Tony Abbot. How demoralising. Haven’t we moved on from this cult of personality? Haven’t we learnt anything from the past 10 years or so? If the same event had been held during Julia Gillard’s term as PM, the names would have been different (Craig Thomson, Peter Slipper, Kevin Rudd?) – and for quite separate reasons, I hasten to add – but the context and implication would have been very similar: “Never mind policies, what’s the chance of (another) leadership spill? How are the numbers stacking up in Parliament? When’s the court case?”

Although I admire the aims of The Conversation, and I understand why it exists, I have some concerns about the type of discourse that The Conversation is actually fostering among its audience. As with many public institutions, I appreciate that it’s there (even though I am not a frequent reader), but like other news media, it risks confirming the bias and prejudices of its audience. It can also feel as if it is serving only the vested interests of its contributors, partners and sponsors.

So much of Australia’s recent political history has been dominated by self-delusional egos, nefarious party factions, insidious vested interests and character assassination (which I blame for giving us five prime ministers in as many years).

When it was my turn to ask a question, it concerned the recent bipartisan compromise between the Coalition and The Greens to publish the tax records of companies generating more than $200m in revenue (as a step towards tackling corporate tax avoidance). I asked, “Should we expect to see more of this seemingly new approach to politics?” Although Ms Grattan gave a detailed (and somewhat technical) explanation for this particular Parliamentary outcome and its likely implications, I felt that most of the audience were not interested. They would probably have preferred to be talking about the ins and outs of the party rooms. For me, this does not bode well for the level and quality of public debate we are having on (non-party) political issues that really matter.

I also have a few other niggles about The Conversation and the 2015 Yearbook:

  1. By only sourcing content from “recognised” academic experts and policy wonks, I think this overlooks contributions from commercial and industry experts which are just as valid. As long as such authors also declare any interests, it should ensure balanced commentary – but to exclude them from the debate just because they don’t have academic, public or research tenure is self-limiting.
  2. The site as a whole (and the book in particular) is rather thin on actual data references, and when research data is included in articles, there are rarely any charts, tables or infographics. I think this is a shame and a missed opportunity.
  3. The book hardly mentions the critical issue of tax reform (which barely merits half a dozen pages). Whereas, reform of the education system (including academic research funding) gets around 40 pages – which rather smacks of self-interest (and bias?) on the part of the academic authors

Finally, The Conversation provides a valuable (and from what I have seen, an impartial) service via its factcheck section, which in tandem with the ABC’s Fact Check is doing a sterling job of trying to keep our pollies honest (at least in Parliament…). More power to it.

Next week: David Bowie Was – “It’s a god-awful small affair”

 

How to spend $60m on #Innovation and #Entrepreneurship for #Startups

In the recent Victorian State Budget, the government allocated $60m over 4 years to supporting startups, via innovation and entrepreneurship. While not an insignificant sum, it’s still not a huge amount in the overall scheme of things. Having made the announcement, the government hurriedly undertook some rapid community and stakeholder consultation, to figure out how to spend the money. I was fortunate enough to be invited to one of the consultation exercises, a half-day lightning conference organised by Dandalo Partners, facilitated by Collabforge, and hosted by Teamsquare co-working space.

LightningConference

The theme of the Lightning Conference was #StartUpFuture

At the outset, there was an assumption that whatever recommendations came out of the consultation process, a new quango would be formed to oversee the implementation of the program and distribution of the funding. I don’t think I was alone when I expressed my concern that this was rather like putting the cart before the horse – the implication being, “Why seek our opinion, views and recommendations if you’ve already decided the solution?”

To their credit, the organisers took this on board – for example, rather than creating yet another entity, maybe the funding could be facilitated by an existing body such as Startup Victoria – but it felt that the consultation exercise was at risk of “going through the motions”.

Across the various topics that were discussed in the self-forming and self-directed breakout sessions, there were probably 5 key themes:

  1. Community
  2. Infrastructure
  3. Funding
  4. Sustainability and 
  5. “Picking Winners”. 

Here are the main points from each of those themes:

1. Community

There was general agreement that the local startup and entrepreneurial community is well-established, reasonably well-connected (I myself knew about 10% of the participants from various networks) and growing fast.

However, there was also a common view that more could be done to bring entrepreneurs and like-minded people together. For example, how do people know what ideas or projects everyone is working on, how can people find help or make offers of help in terms of matching skills, experience, knowledge, resources? How do we connect suppliers and investors to startups?

Sure, there are numerous meetups and regular startup events, but is there a better way to leverage this potential?  And there are various matching services linking entrepreneurs to mentors, but they are rather ad hoc, and in the case of connecting startups and investors, there are probably more challenges than there are opportunities (see Funding, below).

In short, how can the community come together in a more collaborative way?

2. Infrastructure

It’s quite easy to see that Victoria (mainly Melbourne) has a vibrant startup ecosystem, simply based on the number and frequency of meetup events, founder workshops and hackathons. But there still appear to be numerous obstacles to getting started – from establishment costs and bureaucratic red tape, to tax impediments and access to funding.

Some of these challenges are being addressed at Federal level (e.g., streamlining the company registration process, tax cuts for SMEs, and changes to both equity crowdfunding and employee share schemes). But that’s part of the challenge in itself – at the individual State level, there is relatively little that can be done on fiscal policy (apart from payroll tax and land tax), and all reforms relating to securities financing need Federal legislation and the involvement of market regulators.

The State government has more autonomy around local industry policy settings and planning, as well as making funding available via grants. This means, though, that government is forced to prioritize one sector over another (see “Picking Winners”, below), and a system of grants often results in a mini-industry that is created around grant applications, awards and distribution.

At a practical level, some participants took the view that more could be done to facilitate early stage startups and product prototyping – such as a continuous education and open-enrollment program for entrepreneurs, and co-working spaces for small-scale manufacturing, materials-testing, and engineering. (I am aware of at least a couple of local projects in this space – a biotech co-working lab and an “Internet of Things” open access workshop).

If the State government is looking to plug a gap, investing in R&D facilities might be one option.

3. Funding

This remains the biggie – and a topic previously covered both in this blog, and via numerous commentators and advisers. Even though there are many local pitch competitions, incubators and accelerator programs (plus Shark Tank and That Startup Show make for interesting/amusing viewing…) the elephant in the room is that there are too many startups chasing too few investors.

Competition for resources is positive, as long as it’s an efficient, transparent and accessible market, where the laws of supply and demand are equitable and the rules of engagement are clearly understood.

One industry veteran noted that the local investor community can normally provide small-scale startup funding up to $5m (via “family, friends and fools” and angel backers), and even larger, early-stage equity funding over $50m (via Venture Capital, Private Equity and Family Offices). But in the $5m-$50m range there are far fewer options.

Leaving aside the pros and cons of traditional secured and unsecured bank lending and emerging P2P lending platforms, there is a funding gap that could be filled via Australia’s superannuation scheme:

  • First, we need to find ways to get large retail and industry super funds along with other institutional investors to invest directly in local startups. At present, thanks to the Silicon Valley effect, these instos are more comfortable handing their money to US-based fund managers who then charge a premium to invest the assets in local startups. (I call this a very expensive boomerang….)
  • Second, in the absence of suitable investments for retail investors who may want to allocate part of their portfolio to startup opportunities, part of their superannuation assets could be used to invest in early-stage startups via a form of savings products or fixed income bonds. The retail bond market (such as it is) is heavily skewed towards sovereign debt (treasury bonds) and bonds issued by financial institutions (often in the form of hybrid securities, which are essentially a form of deferred equity). There have been attempts (and even regulatory reforms) to encourage the development of a deeper retail bond market in Australia, but these efforts appear to have stalled.

An enlightened approach to asset allocation could direct even a very small part of the $1.8tn superannation savings into startups that could have significant outcomes. If SMEs are seen as the backbone of future economic activity and jobs (as well as innovation and entrepreneurship), helping to accelerate startup growth will deliver multiple long-term dividends.

4. Sustainability

This wasn’t a huge topic of discussion, but it deserves an honourable mention because it surfaced in several ways:

  • Economic (e.g., making better use of available resources, not funding startups that go nowhere etc.)
  • Social impact (e.g., the growth of social enterprises)
  • Environmental (e.g., the conscious capitalism movement and the importance of “for purpose” enterprises such as B-Corps that want to minimize their environmental footprint)
  • Government (e.g., how to foster startups that want to help deliver better public services, and how to change public sector procurement policies that give startups more of a look-in)

There is also a need to reflect the changing demographics of the workplace, so that sustainable employment opportunities (in whatever form they exist) are made available to both mature-age workers and new school leavers.

So perhaps part of the $60m could be put towards (re)training initiatives.

5. “Picking Winners”

First up, let me say I always get nervous when we put our elected representatives in charge of deciding the fate of specific industries, especially when it’s taxpayers’ money at risk. Call me a cynic, but I’m not sure that picking winners is the government’s forte. I understand the need to support certain sectors that contribute to GDP growth, create employment opportunities, generate taxable revenue, instil industry innovation and develop cutting-edge technology – but the example of the domestic automotive industry is one where political ideology probably got the better of sound economics, as public subsidies eventually came to look like throwing good money after bad.

If nothing else, picking or backing winners is fraught with problems of favouritism, lobbying, murky back room deals and “jobs for the boys”. Better to create the foundations upon which broader innovation and entrepreneurship can thrive, and let the market decide. That way, the government can still claim the credit, and frame the conversation around its role as an enabler.

On the day, the discussion was more about the long lead time before anyone would know whether the program had been successful (assuming we can agree on what success should look like). In reality, re-tooling innovation and entrepreneurship is a 10-year initiative (which is difficult to manage in the face of short-term policy settings linked to 3 and 4-year election cycles).

  • Should we teach entrepreneurship and innovation in schools (alongside coding and STEM subjects)?
  • Should government use local plebiscites to determine where/when/how the funding should be allocated?
  • Should we use the money to directly fund startup founders (rather like the UK’s enterprise allowance scheme in the 1980s)?

There was also a suggestion that the money could be used to promote local startup success stories, in order to foster an understanding of truly viable startups, to identify and fast-track high-potential entrepreneurs, as well as define what is takes (time, money, resources, networking and connections) to build scalable and sustainable startup businesses (i.e., companies generating $250m+ in revenue, not lifestyle ventures or small family owned concerns).

If we do need to pick winners, perhaps we can easily agree which ones they are based on current trends, future needs and demographic demands:

  • Health, biotech and medtech
  • Fintech and big data analytics
  • Education and lifelong learning
  • Renewables and green technologies
  • High-tech engineering and manufacturing

In which case, we should simply help the State government prepare an investor profile, set an optimum portfolio performance target (based on financial returns, innovation scores and a mix of social and environmental outcomes) and give the $60m to a skilled fund manager.

FOOTNOTE:

For further ideas, please see 10 Random Ideas…

POSTSCRIPT:

A couple of further contributions to the innovation debate from AVCAL around tax reform, and from OneVentures around superannuation allocation.

 

Next week: Medtech’s Got Talent

Radio comes of age in the social media era

About a year ago, I posted a blog on “Steam Internet” which included some ideas about the importance of radio as a communications platform – even in the age of social media.

Among the individual responses I received, a former colleague recalled how he grew up with radio, and how it was a significant presence in his life as a source of news and entertainment – it kept him company while revising for exams, and allowed him to “share” songs with this friends (via personalised mixtapes). He commented that a pharmaceutical company in Indonesia uses radio as a mainstream outreach channel – because it is relatively cheap, it offers targeted demographics, and it provides access to a large-scale, mass market.

He went on: “Radio is probably still the most effective medium to reach out to large audiences – it is targeted, it is always ON, it is always entertaining, it has loyal followers, and it does not require the listener to have an expensive receiver. More importantly, radio traditionally reached a far larger percentage of the population than what the Internet does today, especially in large developing markets.”

Consumer interest in and demand for audio content is recognised by today’s media industry – hence the growth of podcasting, audio platforms like SoundCloud, streaming services such as Spotify and Pandora, and radio apps like TuneIn – not to mention the growth in Internet radio, digital stations and web-streaming broadcasts.

I tend to agree that radio, after more than 100 years, still offers “new” opportunities for reaching an audience, even Gen Y – but as with any content strategy, it pays to get the model right by:

1. Having great content (plus engaging presenters and skilled producers)
2. Enabling access (broadcasting via any platform, anywhere, any time)
3. Cultivating a strong programming culture (i.e., scheduling and curating a logical flow of information, and across multiple platforms)
4. Encouraging audience participation – radio thrives on giving people a voice, either through phone-in sections, community-made programming, or connecting via “traditional” media such as SMS and Twitter

Radio is also very local (despite global access/reach via apps like SoundCloud Radio) and is usually subject to broadcast regulation. I’ve been involved with a community radio station over the past 3 years, and it has made me aware that audience diversity can be a challenge for broadcasters (how to cater for smaller, minority audiences?), but at the same time many people feel unconnected to mainstream media, such that radio is actually their preferred platform to engage with the world.

Acknowledgment My thanks to Rudy J. Rahardjo for his input to this article.