Jan 182017
 
social media is about connecting with friends

As the UK government ties itself in knots over what Brexit means, the French administration has announced a new set of skilled and tech visas, reports Tech Crunch.

While the French tech sector is nowhere near the size or diversity of the British ecosystem, it has been growing rapidly and various European centres are jostling to take London’s position as the continent’s leading IT city as Britain seems determined to squander its position.

Like many of these national initiatives the question will the French government have a long term commitment to this program? There is a strong possibility that the next administration in Paris may be as hostile as the British towards foreigners or, once the elections are out of the way, the momentum is lost.

It would be a shame if the French commitment turns out to be fleeting. With France’s economy stagnant, like most of the EU, new industries and talent are essential to triggering growth.

Over the next few years the forces of protectionism and xenophobia are going to cripple many of the world’s economies and societies. Where these visas are in a year’s time will tell us whether France will be one of those nations that’s turned its back on the 21st Century.

Nov 172016
 

Then the robots came for the wealth managers…

While much of the focus on the effects of automation in the workforce falls upon manual, skilled and lower level clerical jobs, much of the impact of the next wave of automation will fall on higher level roles.

The rise of the robot financial advisor is a good example of this, as Finextra reports, Well Fargo bank has teamed up with fintech startup SigFig to automate wealth management.

Wealth management has been a lucrative field for banks in recent years however it has come with a reputational risk as poorly trained, incompetent or unethical advisors have pushed customers into investments more aligned with the staffs’ commission structures than the clients’ interests.

Given the costs and risks of employing well paid financial advisors, it’s understandable banks would be attracted to automating the function.

The problem for the banks is automated tools will commoditise the marketplace and almost certainly drive down margins.

So, along with the well paid jobs, the river of gold that was wealth management dries up for the banking sector.

Sep 182016
 

What would happen if the world’s richest people invested in startup businesses? Bloomberg Business ran an interesting, if flawed, thought experiment looking at how many nascent companies each country’s richest individuals could invest in.

It’s surprising how low those numbers are and, if anything, the result underscore how the 1980s and 90s banking sector ‘reforms’ caused the world’s financial system to pivot from its historical purpose of funding commercial enterprises into speculation, rent seeking and manipulating markets.

Apart from a smattering of venture capital not much has replaced the banks in funding the SME and entrepreneurial sectors, if anything it has been those ultra high net wealth individuals who have been financing the investment funds providing capital to entrepreneurs.

How the finance industry evolves in the face of the fintech boom and a world that’s slowly becoming less indulgent of the industry’s greed will be one of the defining things of next decade’s business environment. For the small business and startup sectors getting the funding right will also be a key factor.

The biggest question though is job creation, being able to fund new and innovative investments will be one a critical concern for societies dealing with the effects of an increasingly automated economy.

Sep 022016
 

US retail giant is to slash 7,000 back office jobs reports The Wall Street Journal as the company looks to focus on customer service. The process that’s seeing those jobs lost are part of a bigger shift in management.

The automation of office jobs isn’t new – functions like accounts payable have been steadily computerised since the early days of computers – but now we’re seeing an acceleration of white collar and middle management roles.

As increasingly sophisticated automation and artificial intelligence increasingly affects middle management roles, we can expect further changes to organisations’ management structures.

The opportunity to streamline and flatten management will be something company boards will have to focus on if they want to keep their enterprises competitive and responsive in rapidly changes markets.

For managers, there’s a lot more disruption to come for their roles. Those stuck in 1980s or 90s ways of doing things are very much at risk.

Aug 222016
 
building sydney as a smart city

There’s a mayoral election pending in Sydney and the talk of the city becoming a startup hub is becoming one of the issues.

Over the next few days I’m hoping to interview each of the four major candidates on their policies regarding how they see Sydney competing against the likes of Singapore and Shanghai, let alone San Francisco or London.

In 2009, I was working with the New South Wales state government on their Digital Sydney project which looked at how the state capital could become a global centre, one of the things we found was that the city had many of the attributes successful creative centres had – diversity, tolerance and access to talent.

That project died in the face of bureaucratic ineptitude but the idea still kicks around with last week’s launch of the NSW Government’s Jobs For The Future report which, despite its opening thirty pages of buzzwords and waffle, contains some serious analysis of the state’s reliance on inward facing service industry jobs.

Refreshingly, the NSW Government strategy looks beyond the current mania around tech startups based on the Silicon Valley venture capital model – something the Federal government’s Innovation Statement failed to do – and discusses how to encourage growth and investment in other emergent sectors both inside and outside the inner city startup communities.

While Sydney can be an attractive place to live for the digital elite, it falls down in a number of areas with property being among the most expensive in the world, telecommunications being costly and unreliable coupled with a complacent corporate sector and a stingy investment community.

Making the city more attractive is going to take a number of initiatives that including easing the cost of doing business, improving links between academia and industry along with tapping into Sydney’s diverse immigrant populations.

Some of these factors are within the City of Sydney’s purview but most of them are state or Federal matters. By definition this limits what local politicians can do.

Which doesn’t mean they shouldn’t try to do them and it’s good to see these topics have become issues in the local elections. For Sydney though, one suspects it’s going to business as usual until The Lucky Country’s luck runs out.

Aug 202016
 

As Japan’s society ages and urbanises, the effects are being seen in buildings and communities being abandoned.

The Japan Times reports on how the nation is now becoming a magnet for urban explorers discovering what lies insides abandoned homes, hospitals, hotels and theme parks.

Many of the abandoned tourist attractions are legacies of the 1980s economic boom that saw a massive over-investment in property plays. With a shrinking population, those facilities were always doomed but in a growing society, there would have been economic reasons for redeveloping them.

In Japan though, those economic drivers don’t exist in much of the country as the Japan Times explains.

“Japan is in some sense uniquely blessed as a land of ruins. Its rapidly aging population, low birth rate, urbanization and lack of immigration have left a legacy of ghost towns and more than 8 million abandoned homes, or akiya. That tally could hit 21.5 million, one-third of all residences nationwide, by 2033, according to the Nomura Research Institute.”

Japan is the first of many nations that will face the consequences of an aging population, what they do will be a lesson to all of those who follow. Of those, China will probably the biggest experiment.

One big lesson is property demand changes and once valuable assets don’t necessarily hold their value in the face of a societal shift.

Aug 182016
 

A common factor when talking to tech companies is their talk of disrupting industries, they themselves are not immune from change though.

This week networking giant Cisco announced they would cut seven percent of their workforce, nearly 5,500 employees, as the company deals with the shift to software defined networking equipment continues.

Industry commentators are warning Cisco are not alone as software and cloud based services change the tech industry with Global Equities Research’s Trip Chowdhry estimating the sector may shed up to 370,000 positions this year.

Today I had the opportunity to ask Autodesk’s Pat Williams, the company’s Senior Vice President for Asia Pacific, about the challenges facing companies transitioning to the cloud. At the beginning of the year Autodesk announced they would be cutting ten percent, over 900 jobs, as part of a structuring plan.

“I think there was a model that we had that as we moved to a subscription business that said we would see a bit of a drop in revenue and we realised our gross margins would be pressed,” he said.

“What we were trying to do was right-size the business,” Williams continued. “Sometimes you need to do that. It was a very intentional forward looking move we made.”

Autodesk and Cisco are far from the first tech companies to suffer from the software industry’s shift to the cloud. Microsoft have been probably been the business most affected by the change.

Cisco themselves have been dealing with this shift for a decade as well, with a major restructure in 2011 that saw 6,500 jobs cut.

What is clear in a transitioning industry is that Microsoft, Cisco and Autodesk are far from alone in making cuts. As Autodesk’s Williams points out, it’s probably best for managements to be doing this proactively rather than waiting for the changes to force their hands.

The stories of Cisco, Autodesk and Microsoft show all industries are facing changes. Assuming you’re safe in any sector is brave thinking.