Category: government

  • Towards the post car society

    Towards the post car society

    We don’t often think about it, but the design or our cities reflect the technologies of the day. Right now the way we live is built around the motor vehicle, but are we moving into a new era?

    After a visit to Ford Australia’s Centre of Excellence For Design and Engineering, Neerav Bhatt has some thoughts on the role of the motor car in an era where people don’t have to travel to their workplaces.

    One of Neerav’s points is that car use is falling among younger workers, a trend that’s happening across the western world.

    Much of this is put down to the generations of Millennials and Gen-Ys being more interested in technology purchases rather than cars along with changing work patterns.

    A more fundamental reason could be that we’re reaching the end of the motor car era.

    If there is one technology that represents the Twentieth Century it is the motor car; the automobile has shaped our cities, our lifestyles and our culture.

    However we are now in the Twenty-First Century.

    The three eras of motoring

    Roughly speaking, we could break the Twentieth Century’s love affair with the motor car into three phases; development, consolidation and dependency.

    In the first period, the automotive industry was developing with thousands of manufacturers experimenting with the technology and production methods. At the same time governments were beginning to build road networks and communities were demanding improved links.

    By the beginning of World War II, the motor car was an important part of life but ownership was largely restricted to affluent households and business.

    Following World War II governments made huge investments in road networks and automobiles became cheaper to own.

    This gave a generation a new taste of freedom as you could go anywhere with a tank of gas. It also changed the layout of our suburbs as people could now travel further to work, allowing them to move into bigger houses on the fringe of town.

    As government investment was focused on road building, passenger train and tram networks were starved of capital with many cities abandoning their transit systems altogether.

    Suburbs built in the early to mid Twentieth Century had evolved around trams and the legacy of that can still be seen today. However customers no longer wanted to fight for parking spots on crowded streets designed for horse drawn carriages and trams.

    Responding to this developers started building supermarkets and shopping malls which became popular largely because they offered easier parking. Cheaper goods made available by improved logistics systems – another effect of the motor car – was the other main reason.

    The beginning of dependency

    With the advent of the 1970s oil shock, the role of the motor car turned from being a tool of liberation into one of dependency. The suburbs of the 1960s and 70s had been built around the assumption of universal car ownership and cheap fuel. When fuel ceased being cheap, then households budgets were affected.

    Not coincidentally after the oil shock the reversal of ‘white flight’ – the movement of the middle classes to outer suburbs – started with the gentrification of inner suburbs that had been abandoned by the working class.

    Through the 1970s and 80s the cost of owning a motor car became more expensive as governments stopped externalising the costs of maintaining roads and saw car use and petrol taxes as a revenue source.

    At the same time the obvious effects of saturating society motor cars became obvious as roads increasingly became choked and planners began to realise that building more roads only attracted more traffic.

    Times of decline

    By the turn of the Twenty-first Century technology had also started to move away from centralised offices and factories. Today technologies like the internet and increasingly 3D printing mean that workers don’t have to commute vast distances. Automation also means many levels of management are no longer necessary.

    Changing work patterns is also affecting incomes, with car ownership being expensive many employees – particularly young workers – don’t want to buy automobiles.

    This all means that the era of the motor car is coming to an end, it’s not going to vanish quickly but the decline has started.

    For business, this means the post World War II assumptions that saw the rise of the supermarket, shopping mall and big box discount store are no longer valid.

    Some managers, most notably those of doomed department stores, won’t learn these lessons and will pass into history like the stagecoach companies.

    Just as the end of the horse and carriage era saw the demise of buggy whip makers and blacksmiths, the rise of the motor car saw an unprecedented rise in wealth, employment and productivity. Not only were the lost jobs created elsewhere, but many more were created.

    While the motor car isn’t going to disappear overnight, the decline has started and our society is adapting. For business and government leaders, the task is to understand those changes and adapt.

    Image courtesy of a Norwegian motorway by Ayla87 through SXC

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  • How Australia’s nanny state hurts business and society

    How Australia’s nanny state hurts business and society

    It’s becoming popular to describe Australia as a ‘Nanny State’ as governments respond to moral panics and the need to do something about anything from bicycle helmets to unpasteurized cheese.

    Unquestionably Australia has changed in the last quarter century as governments of all persuasions have found it easier to legislate rather than lead. This has had effects on business and society in general.

    A good example of how the regulations have built up over the last twenty years in Australia is a sign at my local beach.

    the Australian nanny state is shown in signs at balmoral beachThat’s a fine welcome and it compliments the $7 an hour parking fees the local council levies. In itself, those parking fees are a good example of the price pressures driving Australia’s high cost quandary.

    Drinking on Sydney ferries is banned in Australia's nanny state

    Possibly the saddest regulation is the alcohol ban on ferries. Twenty years ago it was normal to see a group of friends unwinding on the way home from work with a cold beer or wine. Today you can’t do that because some bureaucrat decided drunks were a problem and rather than enforce existing laws it was easier to ban drinking entirely.

    The press and moral panic

    Much of this nannyism is being driven by the media who drum up hysterical reports demanding ministers do something. In turn the government’s panicky PR obsessed apparatchiks respond with pointless and unnecessary laws and rules. Often duplicating those that already exist.

    A good example of cynical media hysteria was the story of Malea, a Sydney mum minding her own business while legally cycling with her child in a trailer.

    While out riding a discredited journalist filmed Malea and passed the footage onto a current affairs TV show which portrayed her as a reckless mum and demanded such behaviour be banned.

    Fortunately in that case the politicians ignored the confected outrage, but that’s the exception rather than the rule.

    Doing something

    The media though doesn’t have to force Australian politicians into adopting the nanny reflex. Often governments will create their own outrage in order for attention deprived politicians to get press coverage.

    A good example of this was the incompetent Carr government which decided its contribution to the War On Terror after the 9/11 attacks would be to turn the Sydney Harbour Bridge into something similar to what welcomes Guantanamo Bay detainees.

    The Australian nanny state is shown by the Sydney Harbour BridgeIt’s worthwhile comparing the same view on San Francisco’s Golden Gate Bridge and ask which is the greater terrorist target?

    San Francisco's Golden Gate BridgeWhen Sydney genuinely was a larrikin city, climbing the Harbour Bridge in the dead of night was a rite of passage. Today, if you can get around the security guards, barbed wire, CCTV and motion detectors you risk a $3,300 fine and being branded a terrorist.

    If you try to climb the bridge and get caught, the fine is only half that of stepping on the hallowed turf of the Sydney Cricket Ground.

    At the cricket, if you’re foolish enough to bounce a beach ball, start a Mexican Wave or sing out of tune and you’ll be out before you can say “Shane Warne is a safe driving ambassador.”

    The Age newspaper gave a good example of Australian sports administrators’ Stalinist mindset in this fawning article which gloats over the efforts MCG staff go to in harassing their customers.

    On level three of the Members’ wing is a secure room with the best seats in the house, although the occupants only manage an occasional glance at the game on hand. It is the MCG command post, where ground security, police and Securecorp officers constantly watch a bank of computer monitors and camera screens.

    Dohnt says the camera operators will check the froth on a punter’s cup of Coke to see if it has been topped up with smuggled grog.

    Forcing cricket fans to buy overpriced drinks or visitors to spend over $200 to climb the Harbour Bridge brings us to the core motivation behind many of Australia’s nanny state regulations – protectionism.

    Hidden protectionism

    Many Australian Nanny state rules are to protect businessThis sign, which is attached to the back of the one at the beginning of this story, bans vendors who sell from boats. It’s questionable whether the council actually has the power or resources to enforce this ban but if it helps the local shopkeepers then so be it.

    One of the hubristic traits of Australian exceptionalism is that the nation is a ‘free trade’ economy hard put upon by sneaky Japanese, American and European protectionism. The reality is Australia is just as good as Japan or the EU in introducing sneaky regulations to protect the well-connected locals.

    A very good example of this is bananas where the Australian domestically produced product is substantially dearer than imported bananas sold in the US, UK or Europe.

    In early 2011, Cyclone Yasi devastated Australia’s banana crop and prices soared. Not one imported banana was allowed in to ease the shortage. Remember that the next time you hear a politician or journalist boasting about Australia’s free trade credentials.

    business is hurt by nanny state rules

    Banana prices are another example of the costs passed onto Australian households and industry through nanny state regulations. Compliance costs are real and add to the cost of production and employment. They are another reason why Australia has become a high cost economy.

    More importantly, those regulations tend to favour incumbents making it harder for entrepreneurs and new entrants into markets making the economy even less flexible.

    The burden of regulation is also unfairly dropped upon the smaller business who don’t have the resources to comply with or challenge unfair rules. The Howard government was very good at this with slapping small business with the responsibilities of raising the GST and complying with draconian laws like Workchoices.

    At this stage it’s worth noting that the Australian nanny state isn’t a Labor party creation, it’s come from both sides of politics and often because poorly drafted laws require mountains of regulations to overcome the legislative flaws.

    Workchoices was probably the best example of badly thought out laws where the Howard government panicked into slapping a whole level of punitive rules for businesses who failed to keep log books of staff hours worked – the legislation was so bad that had it not been repealed by Rudd, the sight of bundy clocks would have become common in Australian offices.

    Nanny and risk

    One of the unfortunate effects of the nanny state is that it saps the entrepreneurial spirit – why take risks when nanny is there to support you?

    There is an unintended effect of this though – because we think nanny will always protect us we lose the ability to evaluate risk.

    Where this is most obvious is in financial matters. Too often people are fooled into investing in dodgy schemes because they think that regulators will protect them. They find out this isn’t the case when the money is long gone.

    That failure to understand risk though becomes pervasive through the community as the nanny state mentality becomes established. We could argue that inability to identify risk was the core reason for the global financial crisis.

    The future nanny state

    While the nanny state has been rampant around the world for the last fifty years, its days are numbered as cash strapped governments find they can no longer bear the cost of maintaining armies of bureaucrats to enforce silly rules.

    As society deleverages from the excesses of the credit boom, governments are going to find revenues falling short and while it won’t be the first casualty of the new austerity, the nanny state will almost certainly be a victim.

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  • Reskilling the workforce

    Reskilling the workforce

    One of the core objectives 1980s management philosophy is to shift costs and risks onto others. Staff training is one area that caught the brunt of the drive to slash expenses for short term gain, as a consequence we have a skills crisis with offers opportunities for savvy entrerpreneurs.

    In Why Good People Can’t Get Jobs: Chasing After the ‘Purple Squirrel Wharton management professor Peter Cappelli discusses his recent book that looks at this problem.

    Cappelli’s argument is that companies aren’t offering enough for the skills they desire, they often ask too much of candidates and they won’t train staff.

    In Cappelli’s book, he claims that staff training has plummeted;

    One of your chapters in the book is called “A Training Gap, Not a Skills Gap.” You have some figures showing that in 1979, young workers received an average of two and a half weeks of training per year. By 1991, only 17% of young employees reported getting any training during the previous year, and by last year, only 21% said they received training during the previous five years.

    The predictable consequence of neglecting training for the last thirty years is we now face skills shortages and those responsible – the managers and business owners who refuse to train workers – are now demanding governments do something about it.

    In many ways today’s skills shortages epitomise the short termism of 1980s thinking and how we now find society, and business, is struggling with the long term effects and costs.

    Wherever there’s a problem there is opportunity and there’s a breed of businesses, training companies and workers who will be taking advantage of the failures of the previous generation of managers.

    For those stuck in the 1980s mindset that training, like most staff expenses, is a cost and not an investment they are going to struggle in a world where adding value is more profitable than being the lowest cost provider.

     

    The photo THE BEAD MAKER — Apprentice Watches the Master — A Rosary Shop in Old Meiji-Era Japan was posted to Flickr by Okinawa Soba.

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  • Blind faith in the algorithm

    Blind faith in the algorithm

    It’s fairly safe to say Apple’s ditching of Google Maps for their own navigation system has proved not to be company’s smartest move.

    The humiliation of Apple was complete when the Victoria Police issued a warning against using the iPhone map application after people became lost in the desert when following faulty directions to the town of Mildura.

    Mapping is a complex task and it’s not surpising these mistakes happen, particular given the dynamic nature of road conditions and closures. It’s why GPS and mapping systems incorporate millions of hours of input into the databases underlying these services.

    Glitches with GPS navigations and mapping applications aren’t new. Some of the most notorious glitches have been in the UK where huge trucks have been directed down small country lanes only to find themselves stuck in medieval villages far from their intended location.

    While those mishaps make for good reading, there are real risks in these misdirections. One of the best publicised tragedies of mis-reading maps was the death of James Kim in 2007.

    Kim, a well known US tech journalist, was driving with his family from Portland, Oregan to a hotel on the Pacific Coast in November 2006 when they tried to take a short cut across the mountains.

    After several hours driving the family became lost and stuck in snowdrifts and James died while hiking out to find help. His wife and two children were rescued after a week in the wilderness.

    Remarkably, despite warnings of the risks, people still get stuck on that road. The local newspaper describes it the annual ritual as find a tourist in the snow season.

    Partly this irresponsibility is due to our modern inability to assess risk, but a more deeper problem is blind faith in technology and the algorithms that decide was is good and bad.

    A blind faith in algorithms is a risk to businesses as well – Facebook shuts down accounts that might be showing nipples, Google locks people out of their Places accounts while PayPal freeze tens of thousands of dollars of merchants’ funds. All of these because their computers say there is a problem.

    Far more sinister is the use of computer algorithms to determine who is a potential terrorist, as many people who’ve inadvertently found themselves on the US government’s No Fly List have discovered.

    As massive volumes of information is being gathered on individuals and businesses it’s tempting for all of us to rely on computer programs to tell us what is relevant and to join the dots between various data points.

    While the computers often right, it is sometimes wrong as well and that’s why proper supervision and understanding of what the system is telling people is essential.

    If we blindly accept what the computer tells us, we risk being stuck in our own deserts or a snowdrift as a result.

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  • Did online democracy ever exist?

    Did online democracy ever exist?

    “Democracy is dead” proclaim online pundits as Facebook closes down their corporate governance feedback pages.

    The question though is whether democracy really exists online; the internet is largely a privately run operation which makes the hysteria about the International Telecommunication Union’s attempts to impose standards on the web all the so more fascinating.

    As a consequence of almost every internet service being run by private organisations, rights and concepts like “democracy” are pretty well irrelevant and have been since the first connection to ARPANET.

    When we use services like Facebook, or even our internet provider’s email account, we are only being allowed to do so within the companies’ interpretation of their terms and conditions.

    Often those interpretations are wrong or bizarre as we see with Facebook’s War on Nipples and often the results of misinterpretation are costly for businesses.

    But we have little recourse as these sites are private property and the owners can do pretty well what they like within the law.

    Just a like a shopping mall, if the managements of Amazon, Google or Facebook want you to leave their service then you have no choice but to do so.

    We can squeal about rights online, but in reality we have few.

    That’s something we should keep in mind when investing our time or business capital into any particular platform.

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