Paul Wallbank

Paul Wallbank is a speaker and writer charting how technology is changing society and business. Paul has four regular technology advice radio programs on ABC, a weekly column on the smartcompany.com.au website and has published seven books.

Apr 272017
 
Can overinflated job titles affect a business

“In 30 years, a robot will likely be on the cover of Time Magazine as the best CEO,” Alibaba founder Jack Ma said told a technology conference in Zengzhou, China, last weekend.

One of the things underestimated about this wave of automation is how AI will be applied to management, Knowledge Management expert Euan Semple makes an important point how being supervised by a bot could be a lot fairer and transparent than human managers.

In the normal course of work many people don’t see much of their manager. Too often the experience is frustrating and unhelpful. The predictability and transparency of automated systems could potentially be fairer and more effective than an incompetent, prejudiced, or bullying manager.

The news for those looking at climbing the greasy management pole through getting professional qualifications isn’t good either, reports the BBC.

For the last fifty years, getting an accounting or law degree, often supplemented by an MBA, was the best path for a management position but shifting work patterns and technology is devaluing those qualifications while it’s appearing there will be less management positions anyway.

Tomorrow’s workplace is going to look very different to that of the past half century. Those of us currently in the workforce, as well today’s kids, need to be looking closely at the skills they have for a very different world.

Apr 252017
 
is the ticketing industry being disrupted by new players

 

Sometimes business practices go bad. A good example of this is a survey of restaurant reservation systems by the Marketing4Restaurants website.

A striking allegation in the survey is how some of these services advertise on Google against their own clients, called ‘adwords arbitrage’ by one competitor to the established booking services.

One of the failed promises of the internet was the removal of the middlemen. Many of us thought the web would enable businesses and individuals to communicate directly to the public without the need for intermediaries.

We were wrong, rather than eliminating middleman the internet gave birth to a new breed of bigger global breed with the rise of Google, Facebook and Amazon being the most prominent.

The success of the ticket clipping culture has seen thousands of platform services and online exchanges that do little more than try to lock small businesses and contractors into into their systems for little if any benefit.

However advertising against your own customers as Open Table and Dimmi are alleged to do is another level of bastardry and, at least in Australia, quite possibly illegal.

Even if this behaviour does turn out to be within the letter of the law, a business competing against its own customers is being run by ethically challenged people and is almost certainly doomed in the medium term – what client is going to pay to subsidise its competitors?

As internet startups struggle to justify huge investor valuations we can expect more behaviour like this. Hopefully though most of those businesses, and the investors who fund them, are doomed.

Apr 212017
 

Every tech boom has its excesses and it’s hard to go past the Juicero as the most egregious of today’s mania.

A number of high profile investors, including Google’s venture capital arm, have poured $120 million dollars into the internet connected device that squeezes juice from pre-prepared pouches of pulped fruit and vegetables.

Bloomberg found the devices don’t a great deal as the juice can be squeezed out of the packs by hand, which is just as well given the microchipped pulp containers can be disabled by the manufacturer.

While the Juicero aims to be the juicer equivalent of the Keurig coffee capsule, the device’s expense, built in obsolescence and unnecessary waste is emblematic of everything  that’s wrong with the current Silicon Valley culture.

The fundamental question of any business idea is ‘what problem does this solve?’ It’s hard to think of anything the Juicero fixes.

Apr 202017
 

It’s been another big year for Xero after the company passed its million user milestone, at the recent AWS Summit in Sydney founder Rod Drury to spoke to Decoding the New Economy about what’s next for the company and for small businesses.

For a company founded a decade ago, having a million paying customers is a substantial milestone and one Drury seems quite bemused by.

“It hasn’t really sunk in yet. When we did our IPO our promise was a hundred customers and I can remember when it was our first year our target was twelve hundred customers – I think we got to 1300 – so to pass a million is pretty nuts.

“What we’ve found is the accounting software market is probably one of the key industries where you’ll see the benefits of machine learning and AI. The reason for that is massive amounts of data but a pretty tight and structured taxonomy so we processed 1.2 trillion pieces of data in the last 12 months so the graph of data is huge.”

Far more modest volumes of data threaten to overwhelm smaller businesses and this is where Drury sees Artificial Intelligence and machine learning as essential for simplifying services and driving user adoption.

“One of the challenges is that small businesses might be great landscape gardeners or plumbers but they are terrible at actually coding transactions so we’re now seeing that wisdom of the crowd and all that data that we can code better than most normal people can. So the big epiphany was ‘why don’t we get rid of coding?’

“Effectively all a small business has to do make sure things like the data of the invoice is in the system and we can do the accounting for them and the accountants can check and see what’s going on.”

This automation of basic accounting tasks, and how these features are now embedded in cloud computing offerings, is changing how businesses – particularly software companies – are operating.

“You can’t run domestic platforms any more, because every accountant will have customers that are exporting and what we’re seeing now is global platforms connecting together so, for example, HSBC announced its bank feeds and what we’re doing with Stripe and Square.

All of the accountants need to be coaching the small businesses exporting. That’s what creates jobs.”

That global focus of business is now changing companies grow, particularly those from smaller or remote economies like Australia and New Zealand.

“What we’re finding now is the last generation of the late 90s and early 2000s was very much enterprise technology and normally companies would get to a certain point and then a US public company would have to buy them.

“Now we’re seeing truly global businesses that aren’t selling out quickly they’re actually creating businesses from this part of the world. People don’t have to live in Silicon Valley anymore, they can live in Sydney’s Northern Beaches or Auckland or Wellington and do world class work.

That remoteness is something that challenges Xero though as the company tries to get traction in the US market which is dominated by Intuit and fragmented across regional and industry lines.

“As you start off as a company listed in Australia and New Zealand it’s harder as you don’t get the benefit of the density in a smaller market. Now we’ve done enough to get these bank deals, we can now attract executives of the calibre that feels like long term leadership and that’s the benefit of doing the hard yards for a few years.

We’re past the beach head phase now and now we’re building the long term business. We want to be a big fish in a small pond.”

Overall Drury sees the cloud, particularly Amazon Web Services, as being one of the great liberators for business as smaller companies follow Xero’s footsteps.

“This is one of the amazing things AWS have done, they’ve created this flat global playing field.”

Apr 192017
 

This piece originally appeared in The Australian in July 2014. I’m republishing it here given the recent future of work related posts.

For the past four decades it’s been the working class that has suffered the brunt of the effects of globalisation and automation in the workforce. Now machines are taking middle class jobs, with serious implications for societies like Australia that have staked their future on white collar, knowledge-based service industries.

Yesterday, the Associated Press announced it was replacing business journalists with computer programs, following sports reporting where algorithms have delivering match reports for some years.

Some cynical media industry commentators would argue rewriting PR releases or other people’s stories — the model of many new media organisations — is something that should be done by machines. Associated Press’ management has come to the same view with business data feeds.

AP’s managing editor Lou Ferrara explained in a company blog post how the service will pull information out of company announcements and format them into standard news reports.

Ferrara wrote of the efficiencies this brings for AP: “Instead of providing 300 stories manually, we can provide up to 4,400 automatically for companies throughout the United States each quarter.”

The benefit for readers is that AP can cover more companies with fewer journalists, the question is how many people can afford to read financial journals if they no longer have jobs?

Making middle managers redundant

Many of those fields that cheered the loss of manufacturing are themselves affected by the same computer programs taking the jobs of journalists; any job, trade or profession that is based on regurgitating information already stored on a database can be processed the same way.

For lawyers, accountants, and armies of form processing public servants, computers are already threatening jobs — as with journalism, things are about to get much worse in those fields, as mining workers are finding with automated mine trucks taking high-paid jobs.

Most vulnerable of all could well be managers; when computers can automate financial reports, monitor the workplace and make many day-to-day decisions then there’s little reason for many middle management positions.

Removing information gatekeepers

To make matters worse for white collar middle managers, many of their positions are only needed in organisations built around paper based communication flows; in an age of collaborative tools there’s no need to gatekeepers to control the movement of information to the executive suite.

Irish economist David McWilliams — his television series on the rise of the Celtic Tiger, The Pope’s Children, and the causes of the Global Financial Crisis, Follow The Money, are highly recommended viewing – last week suggested that the forces that disrupted the working classes in the 1970s and 80s are now coming for middle classes.

“The industrial class was undermined by both technological change and globalisation, but rather than lament this, many people who were unaffected by this social catastrophe labelled what happened from 1980 to 2010 as the “inevitable consequences” of global competition.” Mc Williams writes.

Those ‘inevitable consequences’ are now coming for the middle classes, asserts McWilliams.

On the right side of progress

While this is sounds frightening it may not be bad for society as whole; the Twentieth Century saw two massive shifts in employment — the shift from manufacturing to services in the later years, and the shift from agriculture to city-based occupations earlier in the century.

A hundred years ago nearly a third of Australians worked in the agriculture sector; today it’s three per cent. Despite the cost to regional communities, the overall economy prospered from this shift.

Answers in the makers movement

The question today though is what jobs are going to replace those white collar jobs that did so well from the 1980s? The Maker Movement may have answers for governments and businesses wondering how to adapt to a new economy.

Two weeks ago President Barack Obama welcomed several dozen leaders of America’s new manufacturing movement to a Maker Faire at the White House, where he proclaimed “Today’s DIY Is Tomorrow’s ‘Made in America'”.

In Singapore, the government is putting its hopes on these new technologies boosting the country’s manufacturing industry in one of the world’s highest-cost centres.

“The future of manufacturing for us is about disruptive technologies, areas like 3D printing, automation and robotics,” Singapore’s Economic Development Board Managing Director Yeoh Keat Chuan told Reuters earlier this year.

Britain too is experimenting with modern technologies, as the BBC’s World of Business reports about how the country is reinventing its manufacturing industry.

Tim Chapman of the University of Sheffield’s Advanced Manufacturing Research Centre describes how the economics of manufacturing changes in a high-cost economy with a simple advance in machining rotor disks for Rolls-Royce Trent jet engines.

“These quite complex shaped grooves were taking 54 minutes of machining to make each of these slots. Rolls-Royce came to us and said can ‘can you improve the efficiency of this? Can you cut these slots faster?'”

“We reduced the cutting time from 54 minutes to 90 seconds.”

“That’s the kind of process improvement that companies need to achieve to manufacture in the UK.”

While leaders in the US, UK and Singapore ponder the future of manufacturing, Australian governments continue to have faith in their 1980s models of white collar employment — little illustrates how far out of touch the nation’s political classes are with reality when they proclaim Sydney’s future as an Asian banking centre or Renminbi trading hub.

Old business ideas

In the apparatchiks’ fevered imaginations this involves rooms full of sweaty white men in red braces yelling ‘buy’ into telephones as shown in 1980s Wall Street movies. In truth, the computers took most of those jobs two decades ago.

As McWilliams points out, the dislocations to the manufacturing industries of the 1970s and 80s were welcomed by those in the professions as the inevitable cost of ‘progress’.

Now progress might be coming for them. Our challenge is to make sure we’re on the right side of that progress.

Apr 182017
 

While politicians clamour to ‘bring jobs home’, automation is increasingly taking those jobs away with the mining industry being the best example.

In 2015, McKinsey looked at the effects of automation in various US industries and found the production component of mining could lose over 80% of its jobs in coming years.

In a piece for Diginomica this week, I looked at a case study featuring Western Australia’s Fortescue Metal Group (FMG) from the recent AWS Summit in Sydney.

Slashing costs

When Fortescue planned their Solomon groups of iron ore mines in the Pilbara region of North-Western Australia in 2010, they estimated 75 manned trucks would be needed. As it turned out they only needed 49 robotic vehicles.

The savings, both in capital expenditure and operational costs was substantial and the entire operation saw its costs nearly halved.

It’s not just trucks becoming autonomous, functions like drilling and explosives laying are also being automated reducing costs and risks even further.

Dashed hopes

So mining communities like those in the United States hoping Donald Trump will bring back prosperity or Australians who believe a billion dollar subsidy to an Indian coal mining company will guarantee jobs are doomed to disappointment.

A modern mine is likely to employ more workers in an office thousands of miles away than on the site itself. Where once the surrounding region would get hundreds of jobs from a large mine, today it’s only going to be a handful.

It isn’t just the mine workers themselves though, McKinsey’s study also forecast the mining industry’s administrative workforce could see 90% of jobs going while senior management had the potential of being 99% automated.

Beyond blue collar roles

That this wave of automation will affect ‘white collar’ jobs as much as trades or unskilled workers isn’t new – this piece in 2015 for The Australian described how many of the ‘knowledge economy’ jobs will soon be done by robots or artificial intelligence.

Mining is a good indicator of where technology and employment is heading. We, and our political leaders, are going to have to think carefully where the future jobs are coming from as they aren’t going to be found in resurrecting old industries.

Apr 132017
 
Graphs are often used to mislead

One thing the iPhone era has taught us is the importance of good design.

In a piece for Fairfax Small Business this week, I had a look at some small businesses that had used compelling design to launch their products.

As part of the research for this I interviewed Murray Hunter, founder of Sydney’s Design + Industry, about what businesses should be looking for when taking a product to market.

One of the interesting points about the story was the two businesses featured, Elanation and Pod Tracker, didn’t use professional designers as the founders of both had expertise in that field themselves.

But it is clear, good design matters to users and it will avoid problems down the track with manufacturers shippers and possibly regulators so for most small businesses and founders hiring a professional could be a very good investment indeed.