Paul Wallbank – Brilliant Communications

Author: Paul Wallbank

  • Gen X and the big economic shift

    Gen X and the big economic shift

    The single economic event that defines Generation X was the 1973 Oil Shock, the OPEC embargo on the west bought the post World War II era of economic growth to an end.

    With stagflation gripping the western world, new solutions were sought and by the end of the decade governments touting ‘business friendly’ economic policies – more accurately ‘corporation friendly’ – were seen as the solution.

    As Robert Reich described in the New York Times, these policies were not only a disaster for workers but also for the middle classes and business productivity.

    US-economy-employment-wages

    A notable aspect missing in the above graph is US productivity growth has since stalled as corporations have focused on stock buy backs rather than investment. The problem has been compounded by the use of tax shelters that have resulted in huge amounts of American corporate profits being locked away in offshore bank accounts.

    While those stock buy backs and arbitraging tax regimes have benefitted executives and a small cabal of fund managers, the diversion of capital from productive investment has weakened the US and global economy.

    For the baby boomers, even those of the Lucky Generation who preceded GenX, that lack of investment now threatens their retirement lifestyles as incomes and government spending stagnates.

    The ‘big business friendly’ ideologies of Thatcher and Reagan defined the late Twentieth Century and continue to dominate government thinking in much of the western world, it may be though that we a reaching the end of that era as the costs to the broader economy are beginning to be recognised.

    For GenX and their kids, the costs are being borne now but their parents may be about to feel the costs too.

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  • Cutting through Australia’s innovation rhetoric

    Cutting through Australia’s innovation rhetoric

    Four months ago, the Australian government launched its innovation agenda with the noble ambition to put the nation “on the right track to becoming a leading innovator.”

    The keenly awaited innovation statement was seen as a defining the new Prime Minister’s agenda after two decades of complacent political leadership. At the launch of the paper Malcolm Turnbull said “our vision is for Australians to be confident, embrace risk, pursue ideas and learn from mistakes, and for investors to back these ideas at an early-stage.”

    One of the early stage investors currently investing in Australia’s startup sector is Brisbane based entrepreneur, and Australian Shark Tank judge, Steve Baxter who spoke to Decoding the New Economy last week about where he sees the strengths and weaknesses in the proposals.

    Beating the rhetoric

    “Competitive threats are far more effective than rhetoric from a Prime Minister,” says Baxter in observing what really drives adoption and change while emphasizing that the announcement is a welcome shift,  “the change in messaging from the government has been very important. It’s having an impact and a future looking message has been fantastic.”

    While Baxter is positive about much of the incentives on offer and the importance of changes to regulations around bankruptcy and treatment of business losses, he flags the the delay in implementing the tax incentives as being a problem.

    Too focused on commercialisation

    Baxter though has been a long standing critic of Australia’s research sector and the emphasis on commercialisation of academic work is in his view one of the Innovation Statement’s major weaknesses, “commercialisation is a concept that we’ve failed at. It’s dead. We’ve put so much money into it, it’s actually embarrassing. We need a new mindset towards it.”

    “there are seven hundred million dollars of a billion going to the research sector. That’s not entrepreneurship. In fact universities and research institutes are the least entrepreneurial organisations you’ll ever come across.”

    “We need more business model innovation, we’re seeing too many people in lab coats with synchrotrons, square kilometre arrays which we have to do,” Baxter states. “What we’re not seeing the Dropboxes and the Instagrams and the Facebooks and the Wayze’s, the cool stuff that doesn’t need a two hundred million dollar building.”

    Thin pipelines

    As an early stage invest Baxter sees the real challenge for Australia lies in encouraging individuals to launch their own ventures, “I don’t think we’ve done enough yet to prove we have an investment problem when it comes to early stage companies,” he says. “I don’t believe we have a lack of capital”.

    For those starting their own ventures, Baxter sees the word ‘innovation’ as being a barrier in itself.
    “The entrepreneurs I back aren’t those who say ‘I’m going to innovate’ but those who say ‘I can see a problem’.”

    While Baxter doesn’t say this, the real challenge lies weaning Australians off property speculation and encouraging investment and risk taking, something that requires major tax and social security reform.

    Sadly, the Turnbull government has abandoned the prospect of any immediate taxation reform and even the Innovation Statement’s more modest agenda is now in doubt as the nation’s febrile Parliament prepares itself for an early election.

    Baxter’s views, and his optimistic but guarded outlook towards the Innovation Statement reflect the opinion of many of those in the Australian investment community, it would be a shame for the country if the current opportunities are lost for short term political maneuvering.

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  • The limits of corporate journalism

    The limits of corporate journalism

    One of the new models for journalism is being sponsored by corporate interests.

    This works well until the news turns against the corporate sponsor, as Australia’s ANZ now discovers.

    For companies there are many good reasons for to have their own media centres, but to pretend they are twentieth century style Washington Post, Watergate journalism is probably hoping for too much.

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  • How the old advertising models fail on new media

    How the old advertising models fail on new media

    Understanding how a new technology will change industries is a challenge that has faced every generation in modern times.

    Two of the industries most challenged by the rise of the internet have been the publishing and advertising sectors which have seen their established and wildly profitable ways of doing business demolished.

    One of the mistakes almost every industry and business facing technological disruption makes is trying to apply their old models to the new methods which almost always produces poor results, the transition from live theatre to movies and then to television through is a good example of this.

    So it’s not surprising that the advertising industry is now admitting that display ads on web pages have never worked and from that follows the maxim that print dollars equate to digital dimes.

    For the online publishing industry, we’re still waiting for our modern day David Sarnoff to figure out how to make money online.

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  • Twitter’s inconceivable losses

    Twitter’s inconceivable losses

    Last year Twitter managed to lose five hundred million dollars in losses.

    It’s possible to see how a car manufacturer, steel maker or airline runs up a half billion dollars loss. But a social media company?

    Twitter has lost its way and a complete change in management is needed. Maybe it’s time to time to turn the company into a user co-operative, at least the subscribers have an idea of how the products works.

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