Nov 032015

Watching from afar, the reaction to Malcolm Turnbull becoming Australia’s 29th Prime Minister has been remarkable as suddenly the nation seems to have collectively woken up to the fact they are fifteen years into a new century.

In a few short weeks Australian public servants have started engaging in hackathons and business leaders whose idea of an investment was a property plan disguised as a casino have started raising VC funds.

The question though for Australia is this too little and too late after three decades of concentrating on property speculation and betting on a never ending Chinese economic miracle?

New leadership

In Malcolm Turnbull – who only rejoined the Liberal Party in the early 2000s after careers as a journalist, barrister and banker – Australia for the first time in forty years doesn’t have a party apparatchik as Prime Minister.

While this wasn’t a problem during the 1970s and 80s under Fraser and Hawke, by the 1990s the shrinking membership base of Australian political parties meant increasingly the ‘talent’ coming up the ranks was lacking perspective outside the narrow factional groupings most of them were beholden to.

This became brutally apparent with the last three Prime Ministers who were fully hostage to their party factions. In Gillard and Abbott Australia had two party operatives who were no doubt talented in internal party manouvering but hopelessly out of their depths as government leaders – Abbott often seemed to be more interested in settling the battles of 1980s Sydney University student politics than governing the country.

Describing Prime Minister Rudd would take a thesis in political psychology which is way beyond the scope, or interest, of this writer.

The consequences of this were an Australian political leadership that was disinterested in the real economy beyond guaranteeing the social compact that property prices would double every decade and ensure their support in the key swing electorates of suburban Australia.

An insular business community

For the business community the insular focus of Australian society and its politicians worked well too. As the economy turned inwards in the 1990s under the Keating and Howard governments, so too did Australia’s conglomerates who realised clipping the ticket of a consumer economy was far easier than competing on global markets.

The best example of this were Australia’s banks which essentially gave up on lending to business unless it was guaranteed by property. This graph from Macrobusiness illustrates just how the nation’s banks focused on property speculation.

Australian bank lending, courtesy of Macrobusiness.

Australian bank lending, courtesy of Macrobusiness.

That focus on housing and consumer spending underpinned on rising property prices distorted the entire business sector and ingrained in the Australian psyche that the key to riches and prosperity was to get a relatively low skilled ‘safe job’ and borrow as much money as possible.

A good example of this are the regular stories of sweet twenty something wunderkinds who have built multi million dollar property portfolios while working in pizza shops or as administrative assistants.

Possibly the greatest damage Australia’s property obsession has been on the nation’s youth where the message has been ‘don’t gain a globally competitive skill set or education, just get an entry level job at the real estate agents and buy as much property as the bank will allow you.’

Turnbull’s challenge

Like Gough Whitlam, the last Prime Minister not a creature of their party factions, the reform challenge facing Turnbull is immense as 25 years of complacency have left Australia with an uncompetitive economy – as it had for the incoming Labor government of 1972 – with added complexity of having to maintain property prices to keep its economic miracle and social compact ticking over.

The similarities to Whitlam are also striking in the support Turnbull has from the population. One of the striking things on returning to Australia after spending most of the last three months in the United States has been the sense of relief that the inept horror movie of the Abbott government (Attack of the Clueless Zombies) is over and a realisation that Australia has actually entered the 21st Century and not regressing back into the 19th.

Agendas for reform

Entering the 21st Century won’t be easy though for Australia. Completing the reforms of the education sector, started half heartedly by Gillard and then trashed by Abbott in settling the scores of his student politics days, is one major challenge along with reforming tax and social security systems that focuses on asset hoarding and speculation over productive investment.

Possibly a greater challenge is to wean the Australia business sector off its ticket clipping mentality and rediscover its desire to compete globally. It may well be that encouraging the startup sector makes more sense in rebuilding the economy’s competitiveness as many of the nation’s insular conglomerates and their well fed executives are too used to milking the domestic consumer rather than taking on the world.

The end of kitchen renovations

The biggest challenge of all though will be to wean Australians off their property addiction, particularly those under 50 who have neglected their global skills as they focused on renovating their kitchens.

Given the scope of these reforms, such an agenda will require a clear mandate from an electorate that has been complacently accepting guaranteed good times as long as refugees are turned back, the terrorists among us imprisoned and gay couples prevented from marrying for the last 25 years. Making the argument for change is probably going to be Malcolm Turnbull’s greatest task.

For Australia the stakes are high. It’s not likely the 21st Century will be as kind to The Lucky Country as the Twentieth was.

Mar 052014

Madrid have renamed a subway station to Vodafone Sol and plan to rename an entire metro line as part of a corporate sponsorship deal.

Personally I think renaming places changes the culture of place; something well understood by dictators but possibly not so well by corporate marketing people.

Do you think this is a good idea?

Picture of Madrid Sol station courtesy of Zaqarbal through Wikimedia

Feb 082014
happy guy with lots of money

Adam Curtis in his wonderful BBC series All Watched Over By Machines of Loving Grace discusses how Ayn Rand influenced many in the tech industry.

Having been accused of being a ‘techno-utopist’ Curtis’ story is a good reminder of the limits of technology and how the future doesn’t usually turn out how we imagine.

The Ayn Rand influence is worth reflecting on as Rand’s libertarian outloook is shared by many in the technology industry – from the lowest PC technician to the highest flying software mogul.

Rand’s beliefs are best portrayed in her own words, in a 1958 interview with Mike Wallace she tells of how she believes in “challenging the moral code of altruism.”

In Rand’s world view it was the duty of each man to achieve their own happiness, self sacrifice and caring for other is weakness.

That technologists should have those views is curious in that the entire computer industry, the internet and Silicon Valley itself is the result of massive US government spending during World War II and the Cold War.

An more delicious irony is the centre of Silicon Valley, Stanford University, is itself the result of a bequest by railroad tycoon and former Californian governor Leland Stanford.

So self-sacrifice, altruism and government spending forms the basis of the entire modern tech industry – something that computer industry’s libertarians ignore, if they are conscious of history at all.

An even bigger contradiction is the belief that the internet dismantles government and corporate power – one of the lessons of Edward Snowden’s revelations is how comprehensively intelligence agencies monitor online communications.

When the history of Silicon Valley and the 21st Century tech boom is written, one of the compelling themes will be the contrast between the industry’s beliefs and reality.

The final chapters of that history will describe how that contrast between reality and beliefs is resolved.

Jan 292014

Yesterday’s passing of folk singer Pete Seeger at age 94 is a chance to think about old age, the Twentieth Century and how we use technology might be restricting us from seeing the opportunities around us.

One of Seeger’s best known hits of the 1960s was Malvina Reynold’s song ‘Little Boxes’ that described middle class conformity in the middle of the Twentieth Century, which had a renaissance in recent years as different contemporary singers did a take of the song for the TV series ‘Weeds’ .

As the ‘Weeds’ opening credits imply, we are probably more conformist today than our grandparents were in the 1960s.

In business, that conformity is born out of modern management practices that insist employees be put into their own ‘little boxes’ – if you don’t tick the right boxes then the HR department can’t put you in the right box.

With big data and social media expanding, increasing computer algorithms are used to decide which box you will fit into. One of the boxes that managers and HR people love ticking is the age box.

Little Boxes’ writer Malvina Reynolds would never have fitted into one of the modern HR practioners’ little boxes as she only entered the folk music community in her late forties.

Despite being a late bloomers, Malvina wrote dozens of folk and protest songs through the 1960s and 70s – The Seekers’ Morningtown Ride was another of hits – before passing away at age 77 in 1977.

Were Malvina Reynolds born 60 years later, she would expect to live to at least Pete Seeger’s age and expect to switch careers several time during her working life.

Modern age expectancy means the modern workplace’s age discrimination and the box ticking of HR managers is unsustainable; there’s too much talent being wasted while individuals, business and governments can’t afford to fund a society where the average person spends the last thirty years of their life in retirement.

With technology there’s no reason why a forty year old air pilot can’t retrain to be an accountant or a sixty year old farmer get the skills to become a nurse, the very tools that are being used to keep workers in boxes are the ones that enable them to break out of those boxes.

Similarly modern technology allows an accountant, farmer or young kid in an obscure developing nation to create a new business or industry that puts the box ticking HR managers in downtown high rises out of work.

Just as today’s box ticking manager might be confronted by a threats they barely know exist, so too is the business that spends all its time looking at data that confirms its owners’ and executives’ prejudices.
Life, and data, doesn’t always neatly fit into little boxes.

Filing box image courtesy of ralev_com through

Dec 042013
vacuum tubes predated the computer chip and transistor

“We treated Bitcoin as a tech story but now it’s become a much more serious economic story,” said a radio show compere earlier today when discussing the digital currency.

One of the great frustrations of any technologist is the pigeon holing of tech stories – the real news is somewhere else while tech and science stories are treated as oddities, usually falling into a ‘mad professor’, ‘the internet ate my granny’ or ‘look at this cool gadget’ type pieces.

Defining the world we live in

In reality, technology defines the world in which we live. It’s tech that means you have running water in the morning, food in the supermarket and the electricity or gas to cook it with.

Many of us work in jobs that were unknown a hundred years ago and even in long established roles like farming technology has changed the workplace unrecognisably.

Even if you’re a blacksmith, coach carriage driver or papyrus paper maker untouched by the last century’s developments, all of those roles came about because of earlier advances in technology.

The modern hubris

Right now we seem to be falling for the hubris that we are exceptional – the first generation ever to have our lives changed by technology.

If technological change is the measure of a great generation then that title belongs to our great grandparents.

Those born at the beginning of last century in what we now call the developed world saw the rollout of mains electricity, telephones, the motor car, penicillin and the end of childhood mortality.

For those born in the 1890s who survived childhood, then two world wars, the Spanish Flu outbreak and the Great Depression, many lived to see a man walk on the moon. Something beyond imagination at the time of their birth.

It’s something we need to keep in perspective when we talk about today’s technological advances.

Which brings us back to ‘it’s only a tech story’ – it may well be that technology and science are discounted today because we now take the complex systems that underpin our comfortable first world lifestyles for granted.

In which case we should be paying more attention to those tech stories, as they are showing where future prosperity will come from.

Dec 022013

“You have to understand Paul that we are building a structure designed to last twenty-five years,” sneered the consulting engineer as we sat in a site meeting on a high rise construction site just inside the City of London.

I sighed deeply and let the matter of cladding fire protection water tanks slide and pondered nearby St Paul’s Cathedral, wondering what Christoper Wren would have thought about the mediocre architecture being thrown up around his masterpiece.

The consulting engineer was a suitable person to build mediocre buildings, he and his firm were only on the project by virtue of the property developer being from the same masonic temple and the calibre of their shoddy and visionless work reflected their suitability for the project.

Apart from the pedestrian architecture and engineering, the lack of foresight extended through poor design right through to not allowing enough for future expansion of the building’s communications – by the early 1990s it had already become apparent modern office towers were going to need plenty of space for network cables and the lack of which probably contributed to the structure being totally refurbished in the mid 2000s.

That day was the beginning of the end of my engineering career as I found I didn’t much care for being patronized by mediocrities all too often encountered in the building industry in the mid 1990s.

At the time most of the architecture in London was pedestrian and bland late Twentieth Century mirror glass. The real tragedy being that modern construction techniques give architects and builders possibilities that Wren couldn’t have dreamed of.

Thankfully London snapped out of that era of mediocrity and today building like The Gherkin, The Shard and London City Hall show what’s possible with imagination and modern building techniques, although things can go wrong.

Mediocrities patronizing those who don’t share their narrow, bland look on life will always be with us, thankfully we don’t have to accept them in our lives.

If we want to build great things that push the boundaries or change the world, then those grey mediocrities have no role in our lives.

Where that consulting engineer and his masonic friends are today, I have no idea but it’s not likely they built any of the iconic buildings that now dot London’s skyline.

Sep 122013

One of the notable aspects of modern corporations is the inability of executives to identify failure.

A good example of this is the Australian department store industry. Like most Aussie industries it’s dominated by two major players, Myer and David Jones,  both of whom have struggled with the realities of modern retailing.

David Jones is notable for deciding the web was too much hard work in 2001 while Myer’s management whines about sales taxes despite struggling with antiquated point of sales systems and an inadequate online presence that still lags its international competitors.

This week illustrates both companies’ state of executive denial, yesterday Myer’s CEO Bernie Brookes blamed falling profits and escalating costs on the GST and labour rates – the idea that management should take some of the blame for increased overheads didn’t seem to occur to Bernie.

One telling comment of Brookes’ are his comments about productivity and global competitiveness.

“The sector would benefit from reform to help drive productivity and become more competitive in an increasingly global marketplace,” said Brookes.

Brookes’ comment illustrates just how the Australian corporate sector has flubbed the transition to operating in a high cost economy.

At the same time Bernie Brooks was bemoaning the state of the world, David Jones CEO Paul Zahra was opening a new small format store and – like all champions of free enterprise – blamed the government for slow sales.

David Jones’ new store is interesting in itself, notably this comment in the Sydney Morning Herald story;

Mr Zahra said the store had been especially catered to the wealthy demographics of the Malvern area with a focus on high margin items.

“Higher margin categories are what we have focused on and low margin categories are available in store but in the online system so we can get it shipped directly to people’s homes.

“And we get a better gross profit per square metre as a result.”

Welcome to the Twenty-First Century, Mr Zahra.

Both Zahra and Brookes’ statements show they learn nothing from failure, indeed they don’t even seem to acknowledge they have failed.

It’s understandable in modern corporate life not to acknowledge failure, in the alpha-male environment of the executive suite admitting failure is a form of professional suicide.

However not learning from mistakes is a recipe for making more errors – “those who fail to learn from history are condemned to repeat it.”

And that’s exactly what the hapless Myer and David Jones shareholders are condemned to, as are all the other businesses whose management doesn’t see its failures.