On 18 June 2015 I spoke at the Adelaide launch of CEDA’s major new report : Australia’s Future Workforce.
You can see the local media coverage here.
The CEDA report can be downloaded here .
Here’s the full text of my speech.
I’m a Business Architect, I help organisations to reimagine their future.
In practice that means that I’m a strategy & business models guy.
My clients might be startups or early stage technology companies getting ready to raise venture capital or established businesses looking to reinvent themselves.
A common tool that I use is the Business Model Canvas.
It’s a simple page of paper that forces you to define various elements of your Business Model.
We define the customer.
Then we define our value proposition.
How do we best serve the customer ? How do we best reach the customer – what is our distribution methodology ?
What is our price ? What are our growth ambitions ?
Then we need to figure out how we organise ourselves to serve the customer.
This is where it gets relevant to today.
Let’s see how many people we can employ – said no one ever. What we want to do is to get the necessary activities performed. We want to get the required quality, in the right spot, at the right time, at the right price.
We also want the ability to be able to scale up rapidly anywhere in the world or wind it back, depending upon demand.
We want to pay for outputs not inputs. Paying for an employee’s time is paying for an input – we don’t want to do that.
We want to pay for outputs, for outcomes.
We’ll outsource or use software robots or hard robots.
Only if we can’t meet our needs in these ways will we look to “employ” people and even then we prefer that they be on a contract, at least initially and maybe even offshore.
There are some exceptions of course – we want to employ the Senior Managers, the Project Managers – we want to embrace the designers and maintainers of the core knowledge, the core value of the enterprise – we want to hold them close, as we do our customers.
Everyone else we want to Uberfy – we want them on demand – and we only want to pay for a defined output or outcome.
That observation I just made needs an asterisk – because just this morning our time – a Californian court ruled that an Uber driver was an employee not an independent contractor – watch this space – it will be very interesting to see how this plays out
The CEDA report press release headline reads – five million Aussie jobs gone in 10 to 15 years.
Five Million jobs.
That’s 50 full MCG’s . 100 chocka block Adelaide Ovals of jobs gone.
It’s hard to get your head around the scale of that.
Of course we will create some new jobs in that timeframe – but can we create 5 Million ?
When you leave here today – look around yourself at all of the buildings in the Adelaide CBD – and ask yourself what type of work are the people in these buildings doing ?
I’d suggest to you that many of these people are doing what I call advanced clerical work, the bulk getting paid $70,000 to $90,000.
All of these jobs are likely to go.
That’s a hollowing out of the middle class.
In January last year at the World Economic Forum in Davos, Eric Schmidt the Chairman of Google was talking about this very issue.
He noted – “wages as a percentage of economies are likely to continue decreasing, which will ultimately mean demand in the economy will remain low.”
We cannot have a prosperous economy if the income of the middle class is hollowed out.
Tyler Cowen in his 2013 book – Average is over – says we are heading for a global, mobile elite at one end, who will earn increasingly more and at the other end the unemployed, the underemployed and the working poor. The middle class will be thinned out.
Men, in particular, of all ages, who do not have global level skills will face huge difficulties.
To be frank I am very, very concerned.
I’ve been banging on about this for years.
I can see it, I can feel it, I can smell it.
Rome is already on fire and I fear the flames flicker even higher than normal in South Australia. As this CEDA report notes – Australia has always been a great adopter of technology. That’s OK but the winners will be the developers, the owners of the innovation.
I’m very happy to use Uber – it’s great.
Uber’s share of the fare is 20% .
After some local costs – I’m guessing that maybe 17% of my taxi fare ends up in San Francisco – or if I was to be mischievous maybe Ireland via Singapore .
Anyway good luck to them – I’m an Uber fan but never before has a foreign corporation been able to skim 17% off the top of my local taxi fare.
With the recent changes to the GST – Australia’s Federal Government gets 10%, Uber gets 17%.
So – which Australian is going to develop our Uber ?
How do we create the entrepreneurial ecosystem most likely to nurture Ubers ?
If we don’t develop our own Ubers that can efficiently generate revenue from overseas customers – we are global roadkill. Our smart kids – will just disappear overseas to wherever the action is. My favourite futurist – the frenchman Jacques Attali in his great book “ A brief history of the Future” says “By 2020 many businesses will begin to do without sedentary bases. They will be either temporary groupings of individuals or else permanent gatherings of tribes.”
They will operate like Circus Troupes.
This is already happening – I’m seeing it in Adelaide.
Businesses started in Adelaide – heading interstate or usually overseas – everything lost to Adelaide, everything lost to Australia.
No jobs here, no rent being paid, no fees to lawyers and accountants, no local taxes being generated.
A few months ago I was complaining on my LinkedIn page that Australia was moving too slowly on fixing our crowdfunding rules to enable startups to raise equity.
I observed that New Zealand fixed this last year – why was it taking Australia so long?
I can bet the house at the casino or racetrack but I’m prevented from making a rational decision on funding Australia’s potential Uber.
I got a few comments – including one from a former student of an Adelaide University.
I had previously mentored this fellow as part of a University Business Incubator Program.
He was in New Zealand and had moved there because of the potential to raise equity by crowdfunding. Go figure.
It seems we are a Nanny State, regulation getting in the way, reducing the ability of entrepreneurs to be agile. On balance – doing more harm than good.
Time is of the essence. Australia (and indeed South Australia) has a massive pool of superannuation monies.
Let’s put it to work..
Let’s make it mandatory for South Australians to be offered a box that they tick for say 1% of their Super to be invested in local high potential businesses. Or if we were really bold make that the default and make them “opt out” of the 1% investment.
I’ve heard people say that making Adelaide a vibrant city is great but it won’t create any jobs.
I strongly disagree – it is of extreme importance and not just because I enjoy having more options on a Friday night.
The new global elite, the drivers of future job creation can live anywhere.
Adelaide is within striking distance of being the world’s most liveable city of up to 1.5 Million.
Let’s go harder. Let’s have the best public transport system on the planet. Let’s have the best public schools on the planet.
Alvin Toffler wrote Future Shock in 1970.
“The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn, and relearn. ” Our kids will not be climbing the corporate ladder, they will be traversing a lattice. We need to stop teaching in subject silos – and tell stories that put the subjects into context.
The greatest innovations will most likely come when people can look across existing silos.
Innovation will come from pattern recognition. Recognising a pattern in one situation and applying it elsewhere.
Copying the elements of a Business Model from industry and pasting it into another industry.
An understanding of history is useful in this regard.
As Mark Twain said :
“History doesn’t repeat itself , but it does rhyme”
There’s constant talk of how we need to do better in STEM subjects.
Science, Technology, Engineering & Mathematics.
But – we’re missing something.
Creativity – the arts.
Steve Jobs famously credited his focus on design and the elegance of the user interface on his informal attendance at calligraphy classes. We need to bring the A of arts into our thinking. Add it to the mix. We need to stop talking about STEM and start talking about STEAM.
Why couldn’t South Australia have the best public school system on the planet ?
The only reason we can’t is because we don’t want it badly enough.
Our State Plan – has as the Primary Education Objective –
“we are the best educated in the nation”.
Hello – that’s not bold, that’s not good enough.
In any event – based on the public indicators – tragically, we’re actually going backwards even on that lame target.
One of my favourite sayings is –
“If you aim for the stars you might not get there, but you are less likely to come up clutching fistfuls of mud”. We are not going to get close to the stars if we aim no higher than the roof of the shed.
We need to be much more ambitious, much bolder. Aiming to be the best in Australia is just not good enough any more.
I implore you to be concerned.
Be concerned enough to download this CEDA report.
Read it, highlight it. Put sticky note things on the interesting pages.
Share it and discuss it with your kids, your parents, your boss, your employees, teachers at your kids school.
The report outlines various policy options.
If recent history is any guide – our political leaders are going to need help to understand this and importantly they are going to need voters to urge them to act.
Time is of the essence.
Please help fight the good fight.
Please start a conversation about this with anyone who will listen.
Australia needs your help.
And to quote Toffler again
“If you don’t have a strategy, you’re part of someone else’s strategy. ”
So that’s just my view. What’s your view ?
Please add to the conversation about this important topic by commenting below !