One of the key features of modern western nations is how stable politics is with very few major parties being less than fifty years old and many boasting a history lasting back a century or more.
Now in the US and Australia we’re seeing the slow motion implosion of the established parties of the reactionary side of politics – it would be misleading to describe the schoolboy ideologies of most American Republicans or Australian Liberals as being ‘right wing’.
Tony Wright in the London School of Economics blog asks What Comes After the Political Party?
Wright’s view is political parties are doomed to extinction as their memberships dwindle and this is an opinion shared by many watching the declining participation in formal politics over the last fifty years.
One result of that declining participation has been the steady increase in power of the machine apparatchiks who’ve increasingly replaced boots on the ground with corporate funding.
The consequence of that increase in power has been a steady disconnect between the concerns of the electorate and the priorities of the party leadership.
In the US that disconnect resulted in the Republicans blindsided by the rise of Donald Trump and the Australian Liberal Prime Minister increasingly looking like Grandpa Simpson as his party shuffles towards what increasingly looks to be a ballot box disaster.
Both parties are likely to rip themselves apart as the contradictions of the modern reactionary movement – dismantling public services while increasing government powers – come home to roost with the ideologues and pragmatists within the organisation fighting bitterly.
The truth is political parties are no more permanent than businesses, or indeed nations, and in a time of economic change it isn’t surprising old parties die and new ones are formed.
While political parties won’t cease to exist, the new political parties that will rise from the wreckage of today’s will be different in both their philosophies, organisation and membership.
Parties that were formed in the horse and carriage days or the early era of newspapers and radios are always going to find the internet era to be a challenge, that they are being run by men whose political theories haven’t moved for fifty years only guarantees their demise.
In many ways, what’s changing politics is exactly what’s changing business. However the politicians and their supporter seems far more oblivious to change than their commercial counterparts.
One of the features of the Twenty-first Century will be how communities take over providing their own services as cash strapped governments find it difficult to provide the services citizens expect.
In many respects the United States is ahead of the rest of the world in this as the decentralised nature of US government sees many functions being the responsibilities of local county and city agencies.
Following the 2008 financial crisis many smaller cities and rural counties found their revenues crunched, for many of them this compounded thirty years of economic decline as local industries folded or fled overseas.
James Fallows in the Atlantic recounts a trip with his wife across the United States where they visited communities rebuilding themselves in the face of economic adversity.
In his long piece detailing how those different communities are rebuilding, Fallows comes to the conclusion a new political consciousness is evolving among the groups working to change their cities. While early, the common objectives of these groups will evolve into a movement.
Fallows marks what will almost certainly be a defining feature of today’s first world nations as their politics evolve around these movements.
“The minister sends his regrets….”
Yesterday I commented how the Australian Tech Leaders event would be a good measure of the state of the country’s technology industry. Instead it illustrated the sheer contempt the nation’s political leaders hold the industry.
One of the government’s key platforms in the upcoming election is its Innovation Statement and the accompanying Ideas Boom so it wouldn’t have been expected that a minister or at least an informed backbencher would address a room full of technology journalists.
Instead the government drafted one of their local MPs, Fiona Scott, to make the short drive up the hill from her electorate to haltingly deliver a poorly written speech that focused on her local electorate issues.
To be fair to Ms Scott, the outer Sydney suburban seat she represents is a bellweather electorate which tends to swing between parties as government changes. It also happens to have a workforce that’s beginning to feel the effects of a shifting economy. Her focus on local issues is understandable.
However as a member of a government aspiring to drive a technology driven jobs boom and the representative of an electorate whose workforce is in transition, it is remarkable that Ms Scott is so poorly briefed on tech issues.
What’s even more remarkable is the contempt shown by the government towards the country’s technology sector, a long standing problem in Australian society but particularly stark with the current administration given the Prime Minister’s fine words on the topic.
One of the saddest things about Australia’s squandered boom is how the nation turned inwards at the beginning of the Twenty-First century and decided to ignore the global technological shifts.
The contempt shown by the current government towards the technology sector shows a much deeper problem in the Australian mindset, if the country is to rely on more than its luck in the current century then it’s essential to shake off that way of thinking.
Four months ago, the Australian government launched its innovation agenda with the noble ambition to put the nation “on the right track to becoming a leading innovator.”
The keenly awaited innovation statement was seen as a defining the new Prime Minister’s agenda after two decades of complacent political leadership. At the launch of the paper Malcolm Turnbull said “our vision is for Australians to be confident, embrace risk, pursue ideas and learn from mistakes, and for investors to back these ideas at an early-stage.”
One of the early stage investors currently investing in Australia’s startup sector is Brisbane based entrepreneur, and Australian Shark Tank judge, Steve Baxter who spoke to Decoding the New Economy last week about where he sees the strengths and weaknesses in the proposals.
Beating the rhetoric
“Competitive threats are far more effective than rhetoric from a Prime Minister,” says Baxter in observing what really drives adoption and change while emphasizing that the announcement is a welcome shift, “the change in messaging from the government has been very important. It’s having an impact and a future looking message has been fantastic.”
While Baxter is positive about much of the incentives on offer and the importance of changes to regulations around bankruptcy and treatment of business losses, he flags the the delay in implementing the tax incentives as being a problem.
Too focused on commercialisation
Baxter though has been a long standing critic of Australia’s research sector and the emphasis on commercialisation of academic work is in his view one of the Innovation Statement’s major weaknesses, “commercialisation is a concept that we’ve failed at. It’s dead. We’ve put so much money into it, it’s actually embarrassing. We need a new mindset towards it.”
“there are seven hundred million dollars of a billion going to the research sector. That’s not entrepreneurship. In fact universities and research institutes are the least entrepreneurial organisations you’ll ever come across.”
“We need more business model innovation, we’re seeing too many people in lab coats with synchrotrons, square kilometre arrays which we have to do,” Baxter states. “What we’re not seeing the Dropboxes and the Instagrams and the Facebooks and the Wayze’s, the cool stuff that doesn’t need a two hundred million dollar building.”
As an early stage invest Baxter sees the real challenge for Australia lies in encouraging individuals to launch their own ventures, “I don’t think we’ve done enough yet to prove we have an investment problem when it comes to early stage companies,” he says. “I don’t believe we have a lack of capital”.
For those starting their own ventures, Baxter sees the word ‘innovation’ as being a barrier in itself.
“The entrepreneurs I back aren’t those who say ‘I’m going to innovate’ but those who say ‘I can see a problem’.”
While Baxter doesn’t say this, the real challenge lies weaning Australians off property speculation and encouraging investment and risk taking, something that requires major tax and social security reform.
Sadly, the Turnbull government has abandoned the prospect of any immediate taxation reform and even the Innovation Statement’s more modest agenda is now in doubt as the nation’s febrile Parliament prepares itself for an early election.
Baxter’s views, and his optimistic but guarded outlook towards the Innovation Statement reflect the opinion of many of those in the Australian investment community, it would be a shame for the country if the current opportunities are lost for short term political maneuvering.
In the early 1990s I was working for a British company in Hong Kong and regularly commuting to Taipei. On a Cathay Pacific flight back from Taiwan one Friday afternoon, I found myself on the same flight as the organisation’s Asia-Pacific director who graciously got me into the lounge for a beer.
Over that beer he told me how earlier in the year he’d been asked by one of the pukka English directors why he was bothering spending so much money in business development for ‘third world countries’ like Taiwan and South Korea.
Jeff, as we’ll call the director, laid down a challenge to his board. “Come out and have a look for yourself,” he told them.
Some of the UK based directors took Jeff up and flew out to Hong Kong, first class on BA of course, and then continued on to Taipei where they suitably amazed to be greeted by a first world city.
“They genuinely believed they were going to fly in a DC-3 and be met by a bunch of rickshaw wallas,” laughed Jeff, a long standing English expat. “The Brits don’t get East Asia.”
It seems things haven’t changed much as veteran venture capital investor Mike Moritz made a similar point at a speech in London yesterday that the West doesn’t understand China, particularly Europe.
“People underestimate China, especially in Europe,” Business Insider quotes Moritz as saying. “They have very little sense of the size, strength, and scale of ambition of the leading Chinese technology companies.
Moritz pointed out the fund he leads, Sequoia Ventures, is now placing over half its money in non-US companies with Chinese businesses being high on the list.
The West’s misunderstanding of China goes beyond business, with The Economist warning that many nations are soon going to have to choose between the PRC and the United States as Beijing sets up its own network of global alliances and trade accords.
So far the United States has responded to this with clumsy efforts like the Trans Pacific Partnership, an attempt to quarantine China’s influence in the Western Pacific that actually gives PRC based businesses a competitive advantage over nations that enter the deal which does little more than strengthen US corporate interests.
Already in Africa, the results of China’s economic efforts are being seen. A good example is the new Ethopian Railway where the Chinese were quick to fund a project that EU and World Bank lenders had dragged their feet on.
Just as English businessmen in the 1990s misunderstood what was going on in East Asia, it seems ignorance of Chinese growth and intentions are even more widespread today. There may be some shocks coming for countries like Australia who assume today’s realities are tomorrow’s.
Today San Francisco goes to the polls and one of the many questions being put to voters is Proposition F, an initiative to put restrictions on short term rentals.
Also known as the AirBnB initiative, Proposition F is also being seen as part of San Francisco residents’ push against the tech community’s takeover of the city.
In countering the Proposition F supporters, AirBnB hasn’t helped its case with a clumsy public campaign and an aggressive $8 million war chest to support the initiatives opponents, but the real problems for the service lie in the hostility towards the tech and startup community in general.
A notable thing about the new tech community is how their staff are isolated from the community around them. Probably the worst example of this in Southern California where Google has been accused of harassing homeless people on the public footpaths around its Venice Beach complex.
While having onsite facilities may make sense in remote Silicon Valley business parks, in city areas like San Francisco this only creates hostility from those who feel displaced by the new elite.
The remoteness of the new tech elite is also shown in their companies’ attitudes towards customer support. Services like AirBnB, Facebook and Google consistently try to reduce their support overheads by pushing responsibility onto users and contractors by making it difficult, if not impossible for the public to contact them.
Inevitably that remoteness from the general community breeds distrust and hostility. Which is what we’re seeing now being directed towards AirBnB.
Paradoxically, despite the hostility towards the tech community and AirBnB, they are probably not the reason for San Francisco’s soaring property prices as around the world the price of homes is soaring as the effects of cheap money filter through investment markets.
As long as those prices keep soaring beyond the reach of working and middle class residents, AirBnB and the tech community can expect to continue feeling the pressure. Although it’s not hard to think though that a bit of humility might help their case.