Category: Australia

  • Living in an age of grey boxes

    Living in an age of grey boxes

    If an era’s architecture tells us about the times, what do today’s houses tell us about modern society and values?

    On Sydney’s North Shore lies a collection of old army bases, from the 1980s onwards the military started moving out and some of the land was handed over as national parks, other parts were converted into office parks or cafes while the disused married quarters were sold off to private home builders.

    The old stores and administrative buildings have been adapted into artists’ studios and elegant, if expensive, offices. Overall, that’s been a success which has created quite a thriving businesses and creative community.

    old army store converted into an art gallery
    old army store converted into an art gallery

    Many of the colonial officers’ and NCO’s quarters, impressive sandstone and wood structures, have become offices, restaurants or function centres. Although some are still looking for a purpose.

    Old Colonial Military residence
    Old Colonial Military residence

    What happened to the functional three bedroom 1960s and 70s brick veneer homes that housed a generation of army brats is less encouraging and tells us much about the times in which we live.

    A few of the old post World War II homes remain for Navy families in the still operating, and expanding, HMAS Penguin and these show us the houses that once lined Middle Head Road in Mosman.

    old-mosman-military-family-home
    1960s Mosman military home
    old-mosman-militrary-family-home-2
    Another old Mosman military family home

    These are perfect examples of the functional family homes that covered Australian suburbia during the 1960s and 70s. While nothing exciting or particularly pretty, they were adequate for their task as baby boomers built their families in the post war prosperity.

    When they were sold by the Federal government most those modest family homes on Middle Head were bulldozed to make way for the grey behemoths of the 21st Century.

    new-grey-mosman-mansion
    New grey mosman mansion

    Like the Mc Mansions that crowd today’s suburbia, these feature four, five or even six bedrooms with on-suites, multicar garages and games rooms. Just as every child today has to win a prize, every room has to have a plasma TV.

    These monuments to the modern consumerist economy triumphantly march along a road that once featured modest homes with gardens, trees and lawns.

    Line of grey mosman mansions
    Line of grey mosman mansions

    In many ways these modern buildings represent the ethos of our time – grey, non-descript, poorly built, overcapitalised and dependent on cheap, never ending debt.

    A striking aspect about them is their hostility to the pleasant surroundings and the 1930s mansions that make up most of the street. With their battleship grey, security features and blocky air raid shelter lines they look much more like some sinister military installations than the red brick army homes they replaced.

    What’s also notable about these new buildings is many are empty. Some of them are being refurbished, only a few years after being built, and many are undergoing substantial repairs – a testament to  how Australian building standards have declined in the past two decades.

    Strolling along Mosman’s Middle Head Road its hard not to imagine that if Dorothea Mackellar were writing her iconic My Country poem today, she would have included the lines;

    I love a sunburnt country
    a land of capital gains

    The tragedy for Australia is those old three bedroom houses could have been used by a visionary government to help low income families in Sydney’s increasingly unaffordable suburbs.

    However we don’t live in visionary times and government assets today exist to be sold off as quickly as possible to Australia’s rapidly growing rentier classes.

    There was little chance those modest housing blocks would become anything more than expensive, over capitalised gin palaces for bankers and the city’s well connected business elite who are never slow to see a coal mine or old military property going cheap.

    Architecture tells us a lot about our times and the abandoned Middle Harbour army base is a good commentary on the phases of Australian development through the twentieth Century and the beginning of this century.

    The houses also tell how Australians see speculating on overcapitalised property as a safer investment than building the technologies and businesses necessary to prosper in this century. How that will turn out remains to be seen.

    What will be interesting is how our great-grandchildren see us and our legacy when they look upon the grey, hostile buildings we built to celebrate our good fortune in the early 21st Century.

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  • Never going to let you go – the failing businesses clinging desperately to baby boomers

    Never going to let you go – the failing businesses clinging desperately to baby boomers

    Probably the driving factor of the consumerist society’s development was the baby boomers’ growing up.

    Through the last fifty years everything from Coca-Cola to baby products and hair loss treatments has been aimed at the cohort born between 1945 and 65.

    For many businesses and marketers this group has been so profitable it’s been hard to let them go.

    The US motor industry is a good example of this with Bloomberg reporting the over 55 age groups are dominating domestic car sales as younger folk turn away from car ownership.

    A similar thing is happening in Australia as TV executives decide that competing with the internet for millennials is too difficult so sticking with the over 50s market is safer.

    “We’d go out of business if we stayed with our traditional demographic of 16-39.” Channel Ten CEO Hamish McLennan told the Mumbrella360 conference in Sydney earlier this year.

    The problem for both the US motor manufacturers and Australian TV stations is the trends are against them.

    For TV stations trying to compete against the internet, the older age groups are following their kids across to the web at the same time that they are beginning to save for retirement.

    That need to save is also working against the car dealers, while many boomers fawn over new cars a large number simply aren’t going to be able to afford these indulgences. It’s not a good prospect for the motor industry.

    In the meantime, younger people are turning away from the motor car, Bloomberg quotes University of Michigan Transportation Research Institute s researcher Michael Sivak who penned a report on generational shifts in the US motor industry.

    “I have a son who lives in San Francisco; when I get a new car and I tell him what I got, he couldn’t care less,” Sivak said. “To him, it’s a means of getting from A to B. He goes into great lengths about taking a BART or bus, even though it takes him an hour longer. He does have a car, but uses it very rarely.”

    The movement away from the motor car indicates something much more profound about western society — if the baby boomer represented the age of consumerism, the entire Twentieth Century was defined by the automobile.

    For politicians and town planners wedded to a 1950s view of economic development, it may be they are making terrible and expensive mistakes in pushing freeway and other road projects.

    While aging baby boomers purr over their expensive cars, the forces of history may be passing them by. Those businesses pandering to those older groups might just want to consider whether they want to be left behind as the economy, and the kids, move on.

    It’s comfortable to cling onto what has worked for the last fifty years, but sometimes the lowest risk lies in letting go.

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  • Is Australia falling behind on the internet of everything?

    Is Australia falling behind on the internet of everything?

    Last Friday Cisco Systems presented their Internet of Everything index in Sydney looking at how connected machines are changing business and society.

    Cisco Australia CEO Ken Boal gave the company’s vision of how a connected society might work in the near future with alarm clocks synchronising with calendars, traffic lights adapting to weather and road conditions while the local coffee shop has your favourite brew waiting for as the barista knows exactly when you will arrive.

    While that vision is somewhat spooky, Boal had some important points for business, primarily that in Cisco’s view there is $14 trillion dollars in value to be realised from utilising the internet of machines.

    Much of that value is “being left on the table” in Boal’s words with nearly 50% of businesses not taking advantage of the new technologies.

    Boal was particularly worried about Australian businesses with Cisco lumping the country into ‘beginner’ status in adopting internet of everything technologies along with Mexico and Russia, with all three lagging far behind Germany, Japan and France.

    cisco-country-capabilities-internet-of-everything

    In Boal’s view, Australian management’s failure is due to “the focus on streamlining costs has come at the cost of innovation.”

    This something worth thinking about; in a business environment where most industries only have two dominant players and the corporate mindset is focused on maximising profits and staying a percentage point or two ahead of the other incumbent, being an innovator itsn’t a priority – it might even be a disadvantage.

    For Australian business, and society, that complacency is a threat which leaves the nation exposed to the massive changes our world is undergoing.

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  • Dealing with the digital investor

    Dealing with the digital investor

    Telstra’s Digital Investor report released earlier this week looked at the generational changes for the financial planning industry and the effects of technology on delivering advice and services.

    At the core of the report is the projection that by 2030, 70 per cent of Australia’s financial assets will be held by the digitally savvy Generations X and Y and the advice industry is doing little to cater for this group”s media and reading habits.

    This is barely surprising, financial planners are one of these fields subject to arcane rules and regulations which make practitioners extremely conservative about innovation or changing work habits, even when the new tools don’t breach any laws.

    One of the nagging questions though with the report is the underlying assumptions on wealth generation over the next twenty years. Will it really follow the same pattern as we’ve seen for the last few decades?

    As the Stanford Graduate School of Management notes in its dissection of the Forbes richest 400 Americans, the path to wealth is changing.

    “Three of the 10 wealthiest people in the United States – Bill Gates, Larry Ellison, and Michael Bloomberg – built their fortunes on information technology that barely existed in the 1980s,” says the author Joshua Rauth.

    It may well be that the financial planning industry’s core assumptions, of a large, stable middle class workforce steadily squirreling away a nest egg is going to be challenged in an economy undergoing massive change.

    Another generational aspect in the Digital Investor report is the handing down of family owned enterprises. The paper quotes social analyst Mark McCrindle saying “Succession planning is already a key issue (for SMEs) – yet by 2020 40% (145, 786) of today’s managers in family and small businesses will have reached retirement age. We are heading towards the biggest leadership succession ever.”

    As this blog has described before, many of the current generation of small business owners will never pass their operation on. Their barber shops, car dealerships and factories will retire or die with the proprietor as Gen X and Y entrepreneurs can’t afford to buy the business and the owner can’t afford to retire.

    The investment climate of the next quarter century will be very different from the last fifty years as will the business models and the paths to wealth. It’s something that shouldn’t be understated when considering how Generation X and Y will manage their finances.

    Despite the weaknesses, the Telstra Digital Investor report is an interesting insight into how one industry is failing to identify and act upon the fundamental changes that are happening in its marketplace.

    The financial planning industry isn’t the only sector challenged though and that makes the report good reading for any business trying to understand how marketplaces are changing.

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  • Why Australia is losing the digital race

    Why Australia is losing the digital race

    This story originally appeared in Business Spectator on 17 June 2013
    At the beginning of this century, Melbourne hosted a meeting of the World Economic Forum. Among the visiting luminaries was Microsoft founder Bill Gates who laid out his vision for governments in the digital economy.

    “The Government itself needs to become a model user of information technology,” Gates said at the time.

    “Literally seeing government work with its citizens, with its businesses will change how we do our taxes, licences, registrations, all these things, on a basis where you don’t have to know the organisation of government and its various departments, you don’t have to stand in line, you don’t have to work with paperwork.”

    Last month in Brisbane, the Federal government re-released their Digital Economy Strategy with the ambitious goal to make Australia a “leading digital economy by 2020”. A key part of the strategy is for the government to allow citizens to “fully complete priority services online”.

    Thirteen years after Bill Gates articulated the need for governments to move services online – and he was by no means the first person to do so – the Federal government has posted a target to partly achieve this by the end of the decade.

    It’s hard to see how achieving such a belated objective will put Australia in a position of leadership in a rapidly changing world, although this is a direct consequence of deliberate decisions made by the nation’s leaders, and society, over the last thirty years.

    Thirty years ago the debate on Australia’s position in the global economy resulted in the Hawke government’s Clever Country policies. In many ways, today’s Digital Economy Strategy is an echo of the Labor’s halcyon days under Paul Keating.

    Keeping things in perspective

    In Sydney on the day before re-releasing the strategy, Minister Conroy channelled Paul Keating in talking about the J-Curve of technology adoption at a lunchtime panel with the Australia Israeli Chamber of Commerce.

    Preceding Senator Conroy’s panel was Anna-Maria Arabia, general manager of the Questacon National Science and Technology Centre in Canberra, who described her trip to Israel to look at how the nation that derives 40 per cent of its export incomes from high tech industries is nurturing its technology sector.

    Arabia was accompanying Federal minister Bill Shorten and she described a meeting with the chief scientist of the Israeli Ministry of the Economy, Avi Hasson, where Shorten asked him about the success rate of Israeli government research and development projects.

    Hasson’s reply was very different to the risk averse response often heard from Australian bureaucrats, ministers and business leaders.

    “Had I been told that we enjoyed an 80 per cent success rate I would have concluded the government was investing in the wrong projects,” Hasson is quoted as saying. “Such a success rate would have meant we were investing in low risk projects and, quite frankly, the private sector could have taken care of that.”

    The risk-reward equation

    In Australia, there is no such vision or appetite for risk. At best the Federal government has announced another review of tax rules and industry support programs while the opposition is vague on its plans to support innovation and R&D should it occupy the Treasury benches later in the year.

    While it’s easy – and fair – to criticise both sides of politics, the business sector is equally negligent with its reluctance to invest in research and development while claiming R&D tax credits for projects that are closer to capital improvements rather than real innovation.

    Two weeks ago the ABC Business Insiders program had featured an interview between Business Spectator’s Alan Kohler, Dow Chemical CEO Andrew Liveris and Australian Business Council chief Tony Shepherd where they discussed Australia’s role in the modern global economy.

    Australian born Liveris, who is also chairman of the US Business Council and sits on the Obama’s board of innovation, said Australia needs a vision building on the country’s strengths.

    At present he warns the country is in a state of rigor mortis having “lost the will to innovate.”

    Thinking beyond mining

    When Gates visited Australia in 2000, he warned that the nation needed to think beyond mining and agriculture and secure a place in the high tech economy.

    That warning was disregarded and Australia as a nation made the decision to focus on domestic consumption driven by rising property prices and mining exports.

    Reserve Bank of Australia governor Glenn Stevens summed up that national decision in a speech made to the Australian Industry Group in 2010 where he dismissed Bill Gates’ warning about ignoring high tech industries at the beginning at the decade.

    “Ten years on, though, it does not seem to have been to Australia’s disadvantage not to have built a massive IT production sector,” Stevens sneered. “On the contrary, the terms of trade are at a 60-year high, the currency just about equals its American counterpart in value and we face an investment build-up in the resources sector that is already larger than that seen in the late 1960s and that will very likely get larger yet.”

    Stevens’ speech illustrates the Australia we have today – high-tech industries along with the research, development and innovation are something other countries do.

    The vision for Australia being a global leader in the digital economy by 2020 is a laudable and equal to any of the noble objectives proposed in the Gonski education review or the Asian Century report.

    Unfortunately to achieve those aims, and to overcome the deliberate national decisions we’ve made over the last thirty years, it’s going to take more than the modest and belated objectives of last week’s re-released Digital Economy Strategy.

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