Jun 242016

A few years ago I interviewed the boss of a US software company. At the end of the discussion he mentioned how his business had moved most of its development operations to London from San Francisco.

I was surprised at this – while San Francisco is one of the most expensive places in the world to do business, London is even pricier again.

“We can get labour in the UK,” explained the CEO. “In the US if I want to bring in some developers I’ll be tied up by immigration for months, if not years. In London, I can get on the phone and have a bunch of coders on the plane from Barcelona tomorrow.”

That ease of access is now threatened by the Brexit vote, should the UK leave the EU and give up on the free movement of workers across the continent then one of Britain’s core advantages is lost.

Brexit is a historic mistake by middle England that now threatens to see the UK disintegrate as Scotland leaves and the Northern Ireland conflict reignite, the tech industry though will probably be one of the first victims.

For the EU, this is a warning that reform of its institutions has to be a priority. One of the ironies of Britain’s vote is the monstering of Greece, Spain and Ireland following the 2008 global crisis that cost the EU much of its popular support was partly to protect London’s banks.

The bigger issue though is the British voters’ distrust of institutions and elites – something that’s driving Donald Trump’s rise in the US.

We live in interesting times.

Jun 222016
the economy of indonesia is growing and evolving

Can Indonesia create a startup tech culture? The 1,000 startups movement aims to try.

The movement looks to encourage tech startups across the island nation with workshops, incubators and hackathons.

Notably, the program isn’t being supported by the Indonesian government with any money, just an expression of support.

That in itself may not be a bad thing, a program run to meet the needs of communities and industry is much more likely to succeed than one being supported by bureaucrats meeting KPIs or political objectives.

A question though is how appropriate Silicon Valley’s ‘unicorn’ model for tech startups is for a developing nation like Indonesia. While the nation has a high level of mobile phone penetration and a young population, it doesn’t have the sophisticated investment community or financial markets that underpin the Bay Area’s or those of other technology hubs.

Indonesia, like most developing nations, needs to find its own model which may turn out to be very different to today’s Silicon Valley when it reaches maturity later this century.

That the 1,000 Startups Movement isn’t part of a government department gives it a chance to develop a unique Indonesian identity rather than trying to recreate an officially mandated copy of Silicon Valley. It will be fascinating to watch.

Jun 162016
how much money can we save on cloud computing

With the global Zero Interest Rate Policy experiment failing, we’re now entering the era of negative interest rates with a quarter of the world’s central banks charging savers.

The world is flooded with money, but we also have surpluses in manufacturing, a surplus in most commodities, of energy and an increasing surplus of labor.

From Shanghai to Barcelona, the surplus of labor is beginning to be felt as industries become increasingly mechanised and the consequences of short sighted economic policies over the last thirty years begins to be felt.

That labor surplus is also driving the political shifts in Europe and North America as workforces are finding their living standards being pressured and their economic prospects dwindling. As a consequence, voters are looking for scapegoats – immigrants in Europe, the EU in Britain and Mexicans in the US.

Regardless of which scapegoat you choose to blame for the global economy’s uncertainty, the fact remains we are in a time where scarcity can’t be assumed.

This means business models that are based upon restricted supply are, in most sectors, under threat. The whole economics of scarcity becomes irrelevant when there are no shortage of suppliers around the globe.

In some fields, such as energy, technological change is seeing the dominant positions of oil companies, electricity generators and distributors being challenged in ways that wouldn’t have been thought possible a few years ago.

Even regulated industries where government licenses artificially controlled supply – like taxis, broadcasting and telecommunications – increasingly new distribution methods are changing the economics of those industries. No longer is buying a government license a sure fire way to big profits.

Right now, the imperative for businesses to find the areas where there is scarcity and supply constraints. For many industries that may be too difficult a transition.

Negative interest rates though take us into uncharted territory. How the global economy responds to virtually free and unlimited money is going to be an interesting experiment.

Jun 092016

This is the prepared version of my speech at the Cloud Crowd “Can Innovation Save Australia” debate. I was on the affirmative team, even though in truth I’m probably close to the negative side.

Australia truly is the lucky country. We entered the Twentieth Century as one of the richest countries on earth and at the turn of millennium we remained so.

The first fifteen years of this century have been equally kind, however that prosperity has been built on a mining boom and an ever growing property bubble.

Now those foundations are slipping – the mining boom is over and Australians have became the most indebted people on the planet as housing loans put an increasing burden on Australian families, a situation that is not sustainable.

The three Bs of Australian Business

Making matters worse, the good years of the last three decades have seen Australia’s business community become inward looking and complacent, as one of my colleagues recently wrote Australian managers are obsessed with their “Three Bs” – Bonuses, BMWs and their Balmoral Beach Club memberships.

Australia though has a fine history of invention and innovation, we’ve seen ideas ranging from the stump jump plough and Hills hoist through to the flight data recorder and Cochlear ear implants change the world.

Cochlear itself forms the centre of an Australian hearing technology hub at Macquarie University which brings together university researchers, private sector R&D and some of the world’s best medical specialists to form a globally competitive centre of excellence. We can do great things.

Starting from behind

However we are starting a long way behind the rest of the world. Not only is Silicon Valley speeding ahead but so too are countries as diverse as the UK, Israel and Singapore. One of the understated stories in Australian media is just how heavily China is investing in its pivot into a knowledge and innovation based economy. Others in our region like Japan, South Korea, Taiwan and Malaysia are already well down the path of moving to economies based on 21st Century technologies.

All of these countries – their governments, their business leaders and the communities – have recognised success in the Twenty-First Century will depend upon investment in education, research, development and businesses that harness the great powers being unleashed by today’s technologies.

This is where Australia’s opportunity also lies. In the 19th and 20th Centuries the country was the beneficiary of technologies like the steam ship, the telegraph, refrigeration, electrification and, at the end of the Twentieth century, the great global financial deregulations. We truly were the lucky country.

Staying lucky

Remaining lucky in the 21st Century is going to take more than riding on the back of sheep, the end of coal train or surfing the wave of easy credit that crashed over our economy in the 25 years after 1990. We are going to have to be smart, canny and adventurous.

Australians though have shown they can grasp opportunities and with government policies that favour innovation over speculation, investment over ticket clipping, a business community that pulls its weight in research and a community that values education at all levels we can do it.

So yes, Innovation can save Australia but we as a nation have to be prepared to work at it and change many of our current ways of thinking.

May 292016

Staid, conservative Switzerland is one of the first developed countries to seriously discuss a universal guaranteed income.

While it appears the proposition will fail, the fact it is being debated indicates an acknowledgement of changing attitudes towards income and social security.

In many respects governments – particularly in the English speaking world – have ignored the personal social consequences of their economic policies over the last thirty years that have seen working people’s and increasingly the middle classes’ incomes fall and become more precarious.

Now those costs are being acknowledged in the face of increasing concentration of wealth with politicians and business leaders being forced to confront far less stable and cohesive societies.

It may be that the discussion of a universal guaranteed income forms the foundations of a new social compact that defined the mid Twentieth Century, increasingly it looks like something is needed in increasingly divided economies.

While a unified guaranteed income may not be the solution to addressing the economic and social needs of a substantial proportion of a workforce that is under employed and poorly paid, a discussion on what we can do needs to be had. At least the Swiss have started this.

May 262016
cheap robots cleaning computers

Taiwan’s Foxcomm, the world’s biggest electronics manufacturer, has announced it will replace 60,000 Chinese workers with robots.

As the cost of robotics falls and the price of Chinese labour increases, the economics of automating low skilled work increasingly looks attractive.

While automating manual work is process that’s been familiar for three centuries, this automation is now heading into the management suite as artificial intelligence increasingly becomes a viable alternative for lower level supervisory roles.

The workplace of the future is going to look very different to today’s, all of us need to be asking if we have the skills that will be needed by it.