Paul Wallbank – Brilliant Communications

Category: economy

  • Reliving the Hong Kong Handover syndrome

    Reliving the Hong Kong Handover syndrome

    After Margaret Thatcher 1984 agreement to hand Hong Kong over the People’s Republic of China, the hoteliers of the British Colony sent out the message “book now, or pay dearly for rooms at the time of the handover.”

    It became perceived wisdom that the territory would be booked out for years in advance and any rooms available would cost a fortune. So people made other plans.

    As a result, Hong Kong’s hotel occupancy rate during the handover was only 45%. The “buy now or you’ll miss out” message backfired as people decided they’d rather miss out.

    In the second week of the London 2012 Olympics the same thing is happening – the regular tourist trade has been scared away and even the locals who haven’t left town are staying home to avoid the transport and other hassles.

    For London, the Olympics have backfired.

    This is what is always missed when cities or governments make bids for big events, they displace existing trade and the benefits, if any, are short lived.

    At least the Olympics do attract millions of visitors and the eyes of the world are on the host city for two weeks.

    Far worst are the pointless heads of government meetings that pop up with monotonous regularity, for a few days of fleeting notoriety a city is locked down and its citizen corralled as Presidents and Prime Ministers meet to discuss something that will be forgotten in weeks.

    The Sydney APEC meeting of 2007 was case in point, nothing was achieved for the weeks of disruption to normal business except for the spectacle of the so called leaders of the Asia Pacific region scuttling between hotels like frightened cockroaches in their armour plated motorcades.

    Governments around the world keep falling for the myth that these major events generate some sort of economic benefits when it’s clear to the population who aren’t invited to the VIP cocktails parties that their money isn’t being well spent.

    For businesses, the lesson is not to make too many “buy now or miss out” claims. If customers take you at your word then you may find your shop is half empty, just as Hong Kong did in 1997.

     

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  • Are IT workers the new loom weavers?

    Are IT workers the new loom weavers?

    “There are IT workers who can’t put food on their table,” complained an industry representative at an outsourcing conference.

    It’s true – there are hundreds of once well paid project managers, technicians and support staff staff who can’t get work in their industry as some tasks go offshore and others are supplanted by new technologies.

    None of this is new, we only have to think back to the heady days of the Dot Com boom when any punk with a basic knowledge of HTML could pull down six figures a year.

    Just like the loom weavers of the 17th Century who became the Luddites, the HTML coders of 1998 and the project managers of 2008 have had a short period of affluence before been overtaken by change.

    It’s something that today’s hot shot coders should keep in mind, bubbles burst and technology changes.

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  • Redefining affluence

    Redefining affluence

    Finance writer Scott Pape always has an interesting perspective in his regular columns.

    This week he talks about Melissa a mother of three who lives in the US state of Georgia who also happens to be Scott’s virtual PA.

    Scott hires Melissa because she’s cheap; far cheaper than her competitors in Australia.

    For the $8 an hour she earns, she gets no sick pay, no health insurance and no retirement benefits. Unless Melissa has a well paid partner and her work for Scott is just a sideline to help pay the bills, she will work until she drops.

    This is the new reality for those in America, Spain, the UK and most of the West. It’s slowly becoming the reality in Australia as well despite the current hubris about the Down Under Economic Miracle.

    Melissa’s job as a secretary or PA was safe and comfortable twenty years ago. Today – just like auto workers, shop assistants, accountants and even lawyers – secretaries are having to trade their secure jobs for precarious, and reduced, incomes in the globalised and casualised marketplace.

    Scott makes perfectly valid points that individual drive and determination will be important in the globalised economy, but nothing changes the fact that Melissa and millions like her – including ourselves – will not have the living standards of her parents.

    While we can talk about billions of Indians and Chinese improving their standard of living the new globalised world, we shouldn’t forget for a moment that living standards are declining for the most of developed world’s middle and working classes.

    This decline isn’t totally due to globalisation and was probably going to happen regardless of the rise of China. The West’s prosperity was built upon the post World War II reconstruction and the credit booms of the 1980s and 2000s. Eventually the money – or the credit – had to run out.

    How we as a society deal with this will define our nations and communities over the next fifty years. Our governments, business leaders and media commentators are ill prepared for the effects even if they recognise the problem.

    Those most deeply affected are the businesses based on the twentieth century model of ever increasing prosperity. As our retailers are finding, this model is running out of steam.

    While some expect the newly affluent Chinese and Indians to save their well padded hides, most will find Asian consumption patterns in the 21st Century will be different to US auto workers of the 1950s or English real estate agents of the 1980s.

    Even financial planners like Scott are going to find things different – many financial planners thought they could get rich just skimming commissions off their clients’ portfolios which grew with the ever climbing stock and property markets. That model dropped dead in September 2008.

    For those of us born and raised during the Western world’s era of great prosperity, we’re going to find we have to work a lot harder and not take affluence for granted.

    Melissa and her eight dollar an hour secretarial service is the future and it’s probably Scott’s, yours and mine as well.

    Some may say that’s a pessimistic view of the world, but a leaner, harder economy may be the best thing could happen for us as individuals and a society.

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  • Eating the Old Man’s lunch

    Eating the Old Man’s lunch

    Optus today announced the purchase of restaurant review site Eatability for $6 million.

    Eatability is one of the services that’s destroyed the business models of both the phone directory business and that of newspapers.

    Thirty years ago the Sydney Morning Herald launched its Good Living section and it became the way people went found where the good places were to eat.

    Diners wanting to make a reservation at the hip eating places being reviewed in Good Living picked up the phone book.

    Now they do neither, they go to web sites like Eatabilty or Yelp where they get reviews, contact details and everything else they need about the venue.

    Which killed the advertising revenues that newspapers and phone directories depended upon.

    The sad thing is both the newspapers and Yellow Pages could have owned this space. Citysearch was setup by Fairfax to address the online market and it was sold to Telstra when the newspaper chain struggled to make it work.

    Citysearch today languishes neglected and nearly forgotten under the Sensis umbrella. Optus now owning Citysearch’s biggest local competitor which must bring a hollow laugh to those involved in the early days of Fairfax’s digital experiment.

    Whether Eatability thrives under Optus remains to be seen, but it illustrates just how incumbent strengths like telephone directories are being eroded in the online world.

    Old men have to start moving quickly if they don’t want upstarts eating their lunch.

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  • Outsourcing’s changing face

    Outsourcing’s changing face

    Outsourcing company freelancer.com regularly releases the fifty fastest moving job descriptions requested by their customers.

    This year’s list shows how the online industry is changing – content creation, social media and SEO job requests are all down substantially as users and gatekeepers like Google adapt to the information flood we all have to deal with.

    Keeping in mind the market that Freelancer.com caters to small businesses and many of the jobs posted are for fairly small – some would say laughingly tiny and insulting – amounts, it’s probably safe to say we’re looking at the low value end of the market.

    Article writing (down 15%), proofreading (5%), blogging (13%) and submission (4%) jobs are probably the cheap and nasty “Demand Media” style of low quality content designed for SEO purposes.

    SEO itself is in trouble with jobs in that sector down 7% indicating Google’s Panda and Penguin search engine changes have achieved their objectives of improving search results and knocking out those gaming the system with low quality content.

    A similar thing has happened with social media. Facebook is too hard for many businesses and they’re not seeing a return on their substantial time investment.

    “Companies in industries from consumer electronics to financial services tell us they’re no longer sure Facebook is the best place to dedicate their social marketing budget—a shocking fact given the site’s dominance among users,” Freelancer quotes Nate Elliott, an analyst at market research firm Forrester.

    A bright part in Freelancer’s list is the rise is in open standards as HTML5 starts moving up the list with 20% growth.

    “The Internet is becoming more interactive, and the technologies that are winning and will continue to win are open standards like HTML5 and jQuery- to the detriment of the incumbents proprietary technology providers like Adobe and Microsoft,” says Freelancer’s CEO Matt Barrie.

    Open standards aren’t winning everywhere though as Apple’s iOS is clearly winning the developer war as iPhone grows by 30% and iPad by 26% compared to Android’s 20%.

    Freelancer’s list is an interesting snapshot at where industry demand is right now, what’s we’re starting to see are some of the transition effects working their way through the system. The rise and fall of the social media and SEO specialists being one of those.

    The full Freelancer list is below;

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