Fear of the Robot Economy….

A couple of articles I came across recently made for quite depressing reading about the future of the economy. The first was an opinion piece by Greg Jericho for The Guardian on an IMF Report about the economic impact of robots. The second was the AFR’s annual Rich List. Read together, they don’t inspire me with confidence that we are really embracing the economic opportunity that innovation brings.

In the first article, the conclusion seemed to be predicated on the idea that robots will destroy more “jobs” (that archaic unit of economic output/activity against which we continue to measure all human, social and political achievement) than they will enable us to create in terms of our advancement. Ergo robots bad, jobs good.

While the second report painted a depressing picture of where most economic wealth continues to be created. Of the 200 Wealthiest People in Australia, around 25% made/make their money in property, with another 10% coming from retail. Add in resources and “investment” (a somewhat opaque category), and these sectors probably account for about two-thirds of the total. Agriculture, manufacturing, entertainment and financial services also feature. However, only the founders of Atlassian, and a few other entrepreneurs come from the technology sector. Which should make us wonder where the innovation is coming from that will propel our economy post-mining boom.

As I have commented before, the public debate on innovation (let alone public engagement) is not happening in any meaningful way. As one senior executive at a large financial services company told a while back, “any internal discussion around technology, automation and digital solutions gets shut down for fear of provoking the spectre of job losses”. All the while, large organisations like banks are hiring hundreds of consultants and change managers to help them innovate and restructure (i.e., de-layer their staff), rather than trying to innovate from within.

With my home State of Victoria heading for the polls later this year, and the growing sense that we are already in Federal election campaign mode for 2019 (or earlier…), we will see an even greater emphasis on public funding for traditional infrastructure rather than investing in new technologies or innovation.

Finally, at the risk of stirring up the ongoing corporate tax debate even further, I took part in a discussion last week with various members of the FinTech and Venture Capital community, to discuss Treasury policy on Blockchain, cryptocurrency and ICOs. There was an acknowledgement that while Australia could be a leader in this new technology sector, a lack of regulatory certainty and non-conducive tax treatment towards this new funding model means that there will be a brain drain as talent relocates overseas to more amenable jurisdictions.

Next week: The new productivity tools

Corporate purpose, disruption and empathy

There’s been a renewed debate recently, about corporate purpose: why do companies and organisations exist?

Partly this existential angst comes from a sense of feeling redundant – sunset industries, declining and non-existent markets, outmoded technology, irrelevant products and services. The whole evolutionary model, survival of the fittest, etc.

Partly it comes from a shift in the balance of power – from access to resources, markets and technology, to the future of work offering people more choices in the ways they can generate their living.

Whether companies face disruption or decay, their purpose has to change and adapt accordingly – look at how Kodak is backing a project to issue cryptographic tokens to help professional photographers track the use of their IP.

Equally, employees are more invested in working on interesting ideas, and more interested in working for businesses that align with their values, rather than buying into a corporate purpose. So it’s as much about the “how” of an organisation as much as the “what” and the “why”.

I sometimes find it hard to feel much empathy for companies or industries that become outmoded – although I can feel some empathy for the people who lose their jobs as a result. However, if the political and economic response to declining industries is to focus on job losses (or job subsidies), it tends to overlook where the new opportunities are actually coming from – even though this growth does not always offer traditional jobs or work/career options. Equally, individuals need to adapt to the changing work environment – no-one can be sure of a “job for life” anymore, no matter how much some of our political leaders would like to think otherwise.

If we look at the traditional function (not the same as purpose) of many companies, it was to harness certain resources in the pursuit of creating assets or wealth. So, companies were once really good at sourcing and managing financial capital, human capital, and intellectual capital. They were even “better” at this if they had monopolistic access to, or operated within, highly controlled and tightly regulated markets.

Now, of course, thanks to disruption and other forces, companies no longer have a monopoly on these resources, as many markets have become outsourced, open source, disintermediated or decentralised. Rather than being formed by shareholders and other stakeholders for long-term ventures, “companies” can just as easily be a collective of self-forming, self-governing and self-aware resources that combine for a specific objective, for as long or short a time as the objective or enterprise requires. And technologies like Blockchain, digital assets and smart contracts will determine how, and for what reason, and for how long such entities will exist, and the resources they will require.

Next week: More musings on ICOs and cryptocurrencies  

 

 

 

 

 

 

 

The arts for art’s sake…

Last week I wrote about the importance of learning coding skills. This prompted a response from one reader, advocating the teaching of STEM (science, technology, engineering and maths) in schools: “Coding and the STEM subjects are our gateway into the future.” I would agree. But, as other commentators have noted elsewhere, we also need to put the A (for art) into STEM to get STEAM to propel us forward….

Equivalent VIII (1966) Carl Andre (b.1935) Purchased 1972 http://www.tate.org.uk/art/work/T01534

Equivalent VIII (1966) Carl Andre (b.1935) Purchased by Tate Gallery in 1972 http://www.tate.org.uk/art/work/T01534

I recently attended a talk by renowned arts administrator Michael Lynch, as part of the FLAIR art event, where he expressed frustration at the state of the arts in Australia, the lack of a public arts policy, and the associated cuts to government funding. It can’t help that from John Howard onward, we have had a sequence of Prime Ministers who, while not total Philistines, have shown little enthusiasm, appetite or appreciation for the arts. And during Q&A, Mr Lynch referenced the conservative and “safe” nature of so much arts programming as evidenced by the lack of risk-taking and the stale and over-familiar choice of repertoire, although he did acknowledge some arts organisations were doing exciting work.

The debate then shifted to whether we need a new method to evaluate the benefits of a strong arts sector that is not purely dependent on economic terms or financial performance. It was not possible in the time available to come up with a suitable indicator, but I suggest we can derive a range of benefits from putting more emphasis on teaching, supporting and sponsoring the arts. This RoI might be measured in such terms as the following:

  • Enhancing creativity among students will benefit individual problem-solving skills and collective innovation;
  • A healthy arts scene is indicative of a balanced, self-assured and progressive society;
  • Participating in the arts can give people a sense of confidence and well-being;
  • Through art we can learn about culture, philosophy and history – especially of other societies;
  • Giving people the means to express themselves through art is an important outlet for their skills, talent and interests.

We agonize about the amount of investment in our Olympic athletes in pursuit of gold medals, and whether the money can be justified (goodness – Australia only just made the top 10!)  But no-one (yet) has suggested it’s not worth doing, even if we don’t win as many medals as is often predicted. And of course, together with the wider popular entertainment industry, professional sports attract more dollars, airtime and support through sponsorship, advertising, broadcasting rights, gambling revenue, club memberships and merchandise than the arts could ever hope to.

Part of the challenge lies in the popular notion that arts are either elitist, worthy, self-important, or simply frivolous – which makes it harder to build an economic case for the arts, but which can also lead to the worst kind of cultural cringe. Also, if the arts are really doing their job, they hold up a mirror to our society, and we may not like what we see. Populist politicians can’t afford to be associated or identified with such critiques – either as the targets or as de facto protagonists – so would they rather be seen shaking hands with gold medalists (or attending a Bruce Springsteen concert…) than maybe attending a cutting-edge performance by The Necks?

Next week: The latest installment of Startup Victoria pitch night