Tag Archives: innovation

The Jobs and Skills Summit

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Last week’s Jobs and Skills Summit hosted by the Federal Government in Canberra was clearly designed to be a statement of intent by Prime Minister Anthony Albanese and his Labor administration. Part policy endorsement, part policy road map, the Summit was hailed (by the Prime Minister at least) for reaching agreement on “36 immediate initiatives”. By all accounts, it was a jolly affair and everyone in the Government sounded very pleased with themselves. The reality is that despite some significant pronouncements, most of them lack detail, many of them relate to existing initiatives, a number of the “36 agreements” were largely concluded and/or telegraphed ahead of the Summit – and of course, the one item that got most attention was the most divisive: the renewed prospect of multi-employer collective bargaining.

Number of Australian companies by employment size, 2018-2022 (Source: ABS)

There were some contentious views about the small business association’s pre-Summit MoU with the ACTU. Some peak industry bodies and other commentators felt that COSBOA had “sold out” in apparently agreeing to sector-wide negotiations on pay and conditions. However, this does not appear to be the case – COSBOA is merely seeking better co-operation and consultation on areas of mutual interest, and is not endorsing any form of enforced unionisation or compulsory sector bargaining. There have been suggestions that sector-wide collective bargaining will result in higher wages, but without more detail, and pending greater clarity on the “Better Off Overall Test”, this will simply add friction to the current debate about wage and employment growth.

If we do return to a previous form of Industrial Relations policy, it’s interesting to look at the latest ABS data on Australian businesses by employment size (table above). I think it’s worth noting the number of working people in Australia who are employed by SMEs. Large employers are actually small in number, so if multi-employer collective bargaining does come into effect, it could mean tens of thousands of businesses will be involved, and many probably for the first time. On the other hand, in an industry like construction, which is both highly unionised and covered by significant industry awards, many workers are either self-employed or they are employed by independent sub-contractors.

Representation at the summit was reasonably well-balanced, between Unions (including Industry Superfunds), Business (individual companies and industry associations), the NFP and Community sectors, Academia, Think Tanks, and of course Politics. The absence of the Leader of the Federal Opposition meant that his voter base was effectively disenfranchised, although his Deputy (and Leader of the National Party) did attend. Go figure.

Much was said about “streamlining” and “updating” parts of the Industrial Relations regime. Like Australia’s tax laws, the system of Modern Awards as overseen by the Fair Work Commission feels unwieldy, unnecessarily complex, over-bureaucratic, at times vague, and often archaic bordering on arcane. There are currently over 140 different awards in place – some of them relate to an individual company, some to a particular trade or profession, and some cover a whole industry. Interpretation is often in the eye of the beholder as to whether or not it applies to a particular employer and/or employee – here is an extract from one award:

“NOTE: Where there is no classification for a particular employee in this award it is possible that the employer and that employee are covered by an industry modern award or a modern award with occupational coverage.” (Emphasis added.)

I should add that one reason given by the Labor Government for removing the prohibition on sector-wide collective bargaining is because the process for employers to request an exemption from the relevant Minister is “too cumbersome”. I don’t see how this is so given that much of the IR system is overly bureaucratic. Surely the reason for this administrative process is to avoid collusion and other cartel-like activities that would otherwise fall foul of competition law and anti-trust provisions.

The Summit had some notable things to say about gender equality and pay parity, (“Legislate same job, same pay”), training, immigration and child care; but some proposals sound vague without defined objectives (“Boost quantum technology research and education”); draconian if they inhibit workplace flexibility, especially in seasonal industries (“Limit the use of fixed-term contracts”); or too aspirational without more detail such as specific goals and measurable targets (“Leverage greater private capital into national priority areas, including housing and clean energy”). We know that Labor ministers have been vocal in their dislike of the so-called “gig economy” (a “cancer” on the economy, and “I’d like to regulate the sh*t out of it”), but perhaps they need to do more to understand why some workers actually prefer it, and what benefits it brings in terms of workplace flexibility, especially in start-ups and emerging sectors, many of which are SMEs from where much of our longer-term innovation and employment opportunities actually come.

One item that didn’t receive as much attention was the “Digital Apprenticeships Scheme”, which (subject to details…) would likely have the combined support of the Tech Council of Australia and the ACTU. Certainly, despite a vibrant and innovative IT sector, and some notable high-tech and high-end manufacturing businesses in Australia, we lag behind in STEM education, and lack basic digital literacy skills in the wider population. (Hence the need for adjustments to the skilled migration scheme?) A friend of mine who runs a small manufacturing business in Melbourne recently hired an Office Assistant. The successful candidate claimed to be proficient in standard productivity tools such as Word and Excel. In fact, they didn’t know how to COPY-PASTE, nor how to use the SUM-ALL function, which are both very basic routines. They thought they could “wing it” by watching a YouTube video…

Finally, if there is one note of caution or concern about the Summit, it is the niggling thought that this was more of a talk-fest, and that any new ideas to have emerged were either covered by existing programmes and “policy settings”, or were already in train. Going through the list of Outcomes, I counted at least three dozen separate initiatives (Plans, Schemes, Agreements, Reports, Statements, Codes, Programs, Compacts, Task Forces, Working Groups or Funds) many of which already exist, or were part of Labor’s election promises, or have been proposed prior to the Summit. (And that list excludes Federal Ministries and Government Departments.) Sounds a lot like “Talks about Talks”, with “new” money already allocated and spoken for (hence Labor’s push back on some of the implied costs of the Summit proposals). At worst, this “wish list” represents a huge amount of expensive and bureaucratic overlay, whereas we need agile and flexible economic, education and employment measures.

Next week: Finding a Voice

Startup Victoria: supporting successful founders

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I’ve been attending Startup Victoria’s meetups for more than 5 years, and have been a paid-up member for most of that time. The event formats and the key personalities have changed over the years, but the mission has always been to help create more founders and better founders, and to support the broader startup ecosystem. At last month’s AGM and panel discussion, the Board announced that the focus has now shifted to “helping founders to succeed”. A subtle change, but an indication that the local startup scene is finally maturing.

As part of this renewed focus, Startup Vic wants more corporates to engage with local startups – as suppliers, strategic partners and potential target acquisitions. Given the challenges startups face in meeting enterprise procurement processes (especially in the public sector…), this will not be easy. The path to engagement with startups has to be considerably de-risked before purchasing managers will get the sign-off to onboard new vendors.

That challenge aside, another observation from the panel discussion of founders and advisors was that Startup Vic needs to connect newer founders with more experienced founders, those who have already taken a startup to scale up to exit. Plus, as a leadership organisation, Startup Vic recognises that more needs to be done to highlight local success stories. That doesn’t just mean the startup community celebrating itself – it means spreading the word publicly and getting more media airtime for businesses that are building sustainable growth in the new economy.

One of the panelists asserted that “some of our politicians would rather have their photo taken with the winner of the Melbourne Cup, than be seen with the founders of Atlassian”. A bit harsh, perhaps – but I know that they mean. Aligning themselves with sporting heroes probably does more for their public profile, compared to hanging out with our key tech entrepreneurs in order to learn what government could do to foster more startup success.

To be fair to the Victorian Government, it has been trying to implement an innovation strategy that brings participants together – founders, investors, incubators, accelerators, etc. This has resulted in: the Victorian Innovation Hub (plus a number of sector-specific tech centres); LaunchVic (to provide grants to projects designed to foster the startup community); and engagement with overseas VC funds and offshore tech companies (to position Victoria as an investment destination, and as a national, regional or even global HQ).

Meanwhile, the panel also debated whether too many local founders are more interested in building a “lifestyle business” for themselves, rather than creating say, a $250m company. This apparent lack of ambition was seen as something of a local phenomena, partly linked to Melbourne’s status as one of the world’s most livable cities, partly linked to a generally benign Australian economy (but with a growing number of stress points), and the usual cultural factors such as the tall poppy syndrome. There are also some structural challenges in the economy (restrictive trade practices, a lack of competition in highly concentrated markets, continued economic uncertainty post-mining boom, delays in rolling out the NBN, a potential credit squeeze…), plus a growing distrust of public institutions and major corporations. This disenchantment and disengagement is not helped by a lack of strong leadership in government and in business – so why would anyone with any sense want to get involved, and hence the desire to take care of one’s own needs first.

Finally, emphasizing the need to re-think the founder mindset and to provide a better foundation for building the businesses of the future, Startup Vic is also committed to both the professional and personal development of founders.

Next week: Blipverts vs the Attention Economy

 

 

Fear of the Robot Economy….

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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

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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