We’ve barely begun to contemplate there remains the question of what happens to the communities that depended upon old industries.
One of the mantras of technologists like myself when challenged about where jobs will come from after existing industries are automated or become redundant is “we don’t know where they will come from, but they will.”
Assuming that is true and the jobs will come in industries we’ve barely begun to contemplate there remains the question of what happens to the families and communities that depended upon the displaced industries.
In both regions local industries collapsed through the 1970s and 80s and the local working classes became the welfare classes, stuck on benefits with at best poorly paid casual work available.
As the Idiot Tax describes in Tasmania’s Burnie, retired older workers reaped the benefits of a life of full time employment that town’s youngsters will never know.
History has no shortage of examples of cities that disintegrated when their economic reason for existing became no more — a process we’re seeing in Detroit today.
Now we’re seeing almost every industry being changed with far greater potential for job losses and fractured communities.
That we’ve dealt so poorly with the process over the last fifty years means we have to start thinking about how we as a society manage this adjustment.
Jobs will come to replace the ones lost, just as through the Twentieth Century new roles developed to replace those displaced from as nations like the US, France and Australia evolved from largely agricultural economies into industrial and then service industries.
But the human cost is real and there are no shortage of shrunken or abandoned towns that were once thriving market or railway hubs at the beginning of the Twentieth Century.
For technologists, this is an issue that has to be faced as we enter a period of economic and technological change far greater than the one we saw in the 1970s and 80s.
“We’re really well funded, so that is not something we’re as worried about,” Aditya Shah, Instacart’s general manager says. “Growth is the most important factor.”
This is the classic Silicon Valley Greater Fool model, where the aim is to get as many customers as possible to make the business attractive to a cashed up large corporation.
It might work, but the odds of being an Amazon or Salesforce – both companies have barely made a profit in the decade and a half they’ve been running – is unlikely.
One of the big problems is that delivery doesn’t scale, the ‘last mile’ problem of getting the goods to the customer remains the most complex and expensive part of the process.
Drones may solve the labour cost problem and sophisticated algorithms from companies like Uber may make the process more efficient but it’s unlikely an ad-hoc delivery service can ever scale to the degree these entrepreneurs project, unlike the post office and courier services where the system is built around predictable delivery routines.
Uber is the company that validated the model of today’s delivery startups, as Miller mentions;
“Meanwhile, venture capitalists joke that every other entrepreneur they meet pitches an “Uber for X,” bringing goods and services on demand: laundry (Washio), ice cream (Ice Cream Life), marijuana (Eaze) and so on.”
It’s hard to see how the current craze of delivery startups will end any better than the Webvans and dozens of other services that soared and crashed in the late 1990s, however business models are changing and it may be one of these will find the formula that works in the new economy.
Last week showed the technological ignorance of Australian politicians. It’s time voters and business demanded better.
In mid 2003 I put an employment ad online for two computer technicians. I was expecting a healthy response as it was the depths of the computer industry’s depression following the tech wreck two years earlier.
A healthy response is what I got. Two thousand job applications came in; it took me a week to wade through them.
I was reminded of that story with the Federal government’s recent thought bubble requiring those on unemployment benefits to apply for forty jobs a months.
Like most of the business community I was appalled at the thought of being buried under hundreds of pointless job applications that served nothing but to fulfil a Liberal Party staffer’s ideological fantasies.
Within a week an Adelaide grandfather had come up with the idea of a jobseeker app that would automate the task which shows just how far out of touch both sides of politics have become with the modern world, particularly the digital economy.
The Australian political classes’ lack of understanding of technology has been on painful display over the last week with the Federal government’s fumbling over proposed data retention laws; one gets the impression George Brandis needs other people to use the toaster for him, let alone be trusted to use a computer without assistance.
This incomprehension of what’s driving the modern economy among our political leaders is no longer a joke – when the Prime Minister himself proudly states ‘I am not a geek’, it’s clear this nation is being led away from having any serious role in the 21st Century.
In fairness, this is not the fault of any single party or individual; it’s the result of Australians – particularly Australian businesses – voting like sheep for the blue team or the red team at every election.
As a consequence, Australian politics is now dominated by comfortable, arrogant and somewhat dim careerists who have little in skills beyond being able to float to the top of the shallow, fetid sewers that are the party political machines.
This is our fault and it is where Treasurer Joe Hockey is right in bemoaning how business won’t stand up and strongly lead the nation’s reform agenda.
Unfortunately for Joe, a true reform agenda is about making the nation more competitive in an era where the world’s economy is radically changing. The old ‘ship out resources and watch your property go up in price’ model that has sustained the Aussie economy is not a recipe for long term success.
If Australia is going to compete in the Twenty-First Century then we are going to have to invest in modern training, education and capital equipment while putting in the tax and social security systems that reward genuine entrepreneurs and job creators over property speculators and corporate ticket clippers.
Right now Joe, and his friends in both the Liberal and Labor parties, are doing exactly the opposite.
Joe’s right. We need to voice our concerns loudly. We also need to demand our politicians at least take the time to understand the basics of the technologies that are radically changing today’s world.
Next time you see a politician, of either colour, try to get five minutes of their time to explain how technology is changing your business. Hopefully it might make them pause before the next thought bubble.
Slack is a corporate communications tool and Butterfield sees the company as being the next Microsoft.
While that’s a big call, Butterfield shouldn’t be taken lightly having founded Flickr and following the company into its being absorbed by Yahoo!. Butterfield’s resignation letter after several years is an entertaining read.
Whether Slack becomes the next Microsoft or not, the changes to business communications with services like this are profound.
Dealing with the new ways of communicating within a business is going to be one of the greatest challenges to company managers over the next decade.
This set off a chain of claims and counterclaims including some truly bizarre pieces on various blogs about ‘chefs winning the war against critics.’
Probably the strangest thing with this whole debacle is the review by Leslie Brenner in the Dallas Morning News is actually quite constructive and certainly no AA Gill style demolition of the establishment.
This silly little spat illustrates how business people, not just temperamental chefs, have glass jaws. Another story going around the web this week is of Union Street Guest House in Hudson, New York, that fines guests for bad reviews
Tesar’s response is pretty typical of many business owners – attack the critic instead of addressing the problems. Given Tesar threw the Twenty Rules of Social Media – which apply to businesses as much as social media – out the window, he was lucky not to find his reaction backfiring horribly on him.
What business owners have to understand is that you will get criticism, unfortunately most of it you will never know about as unhappy customers tell their friends and relatives.
If you get the opportunity to hear that criticism, then you have the opportunity to fix the problem.
This is something business owners need to understand about review sites and social media; it’s an opportunity to get some honest feedback about how things are going.
So start listening to what your customers are saying online and stop being so defensive.
In truth it’s the opposite; none of the cities cited as startup centres are cheap places to live or work and London is usually towards the top of the most expensive places on the planet.
That rents aren’t a huge factor is possibly because the typical tech startup is a lean operation with a small team crammed into a crowded location.
One suspects though there are limits to how much a business conserving its cash will pay — you don’t see many startups based in A-grade locations alongside big law firms and banks — and this may be the weaknesses of these big cities.
Certainly in London’s Silicon Alley the complaint is the days of cheap rent are long gone and newer startups have to base themselves in other locations across the city.
Overall, rents are important but they aren’t the critical factor in developing a tech sector hub. Whether that remains the case depends upon how the industry develops.
What are the ingredients that have driven today’s tech startup centres to prominence?
One of the recurring topics this site keeps returning to is how cities like San Francisco and London have seen an explosion of tech startups in recent years.
Probably the spectacular of all the cities that have shot to prominence is New York; a decade ago tech startups in the city were a rare thing, today there are thousands.
Today I had the opportunity to visit AlleyNYC, one of New York’s biggest tech accelerators. It’s impressive how a venture two years old can be so successful.
A question I asked was ‘what has driven the change in New York?’ The consensus was the combination of the Great Depression and the success of high profile companies like Facebook.
The success of high profile startups has validated the business model in the eyes of both investors and founders, people who would have been reluctant to leave their jobs and start a business now see the opportunities while investors can see there are returns to be made.
What’s notable about cities like New York, London and San Francisco is the depth of industry expertise, capital, networks, education institutions and diversity. These are key factors in attracting tech startups.
For other cities aspiring to be ‘the next Silicon Valley’, it would be worthwhile considering where their strengths lie compared to these giants.
It’s not a given that any of today’s global leaders will be the future centres of industry, but other cities and regions will need to have a very strong reason for businesses to choose them over the incumbents.
Keeping things simple is a strength in today’s complex times.
This week I’m in New York to attend the BlackBerry Security Summit, more of which I’ll write about later although this story for Technology Spectator covers much of the news from the day.
BlackBerry is struggling to find relevance after losing its way when Apple and Android smashed their business model of providing secure, reliable and email friendly phones.
Now in post Snowden world, BlackBerry under new CEO John Chen is looking to rebuild the company’s fortunes on its strengths in security.
One of the aspects Chen’s team is emphasising is the simplicity of their software. Dan Dodge, who heads BlackBerry’s QNX embedded devices division says their operating system has a 100,000 lines of code as opposed to hundreds of millions in Windows and Android.
That weakness in the established software packages is something illustrated in today’s story about a verification problem in Android due to reuse of old code from another older product.
Simplicity is strength is Dodge’s message and that idea could probably be applied to more than software.
In the complex times we live in, simplicity could be the key to success.
The internet of things is changing the world of marketing, manufacturing and customer service says cluetrain writer Doc Searls
“The internet of things is about what we own and how we build solutions around that rather than what we buy and companies following us around and guessing about us,” says veteran industry commentator Doc Searls.
In an interview with Decoding the New Economy, the writer of the Cluetrain Manifesto discusses how he sees the internet of things changing marketing.
For Searls, the connected shoe is a good example of how individuals can control the data being collected on them and the way businesses can get far more relevant information about how customers are using their products.
Searls sees that the trend towards companies trying to dominate their fields in the Internet of Things as being doomed.
“It’s our internet of things, not theirs. Right now the internet of things is being discussed as Apple versus Google versus Facebook.”
“None of those are going to own the internet of things; the internet of things is a matter of you and your things and me and my things.”
Empowering customers
Searls sees the connected shoe as being a good example of how the internet citing his own New Balance shoes as how manufacturers can get richer data on its customers.
“The interesting thing is there’s much more intelligence a company can get directly from its customers who already own something rather than following us around on the internet.”
Searls’ view challenges today’s model of advertising based services; it may be this is the reason why companies like Google and Apple are so focused on playing a part in the internet of things.
The Global Innovation Index rates nations on their ability to adapt and compete in the global economy, the authors believe the measure is more than just economics
Last Friday the Global Innovation Index was released rating nations on their ability to adapt and compete in today’s global economy, the authors though believe the measure is more than just economics.
The Global Innovation Index is a joint venture between Cornell University, INSEAD, and the World Intellectual Property Organization which measures 81 economic factors that across 143 countries.
Its release in Sydney last week was part of the B20 conference – the business offshoot of the G20 Heads of Government meeting taking place in Cairns later this year.
European countries top the list with Switzerland, the United Kingdom, Finland and the Netherlands making up the leading five. The US and Singapore break the European monopoly at the sixth and seventh positions.
As the results indicate, rich countries have a natural advantage in the index with index scores tracking national GDP – the highest ranked middle income country is China at 29th and the leading low income nation is Kenya at 85.
Innovation index versus GDP
Kenya, and Sub Sahara Africa in general, is one of the highlights of this year’s report with with countries in the regions being nominated as ‘innovation learners’ with them performing above their expected level of GDP.
“What we find in Africa is growth rates are stabilising,” says Francis Gurry, the Director General of WIPO in discussing the report. “That creates the space for better policy and investments.”
Smaller is better
A key finding in the report is that smaller countries tend to perform better; “there’s a slight bias in the index,” says Gurry “as there’s more evenness across the economy.”
This works against larger countries like the United States while favouring countries such as Switzerland and Singapore.
Being affected by the 2008 financial crisis doesn’t help economies either; “the countries you see on top like Switzerland and the Nordic countries have been less affected than countries like Spain and Greece” says Bruno Lanvin, the Executive Director of the ISEAD Global Index.
Europe’s growing divergence
“Yet Europe remains a land of innovation,” continues Lanvin. “Europe has no choice, it is an aging economy and it has to innovate its way out.”
“A divide has been recreated within Europe, the whole European edifice has been a terrific machine for convergence. This has disappeared with the crisis where we see a new divergence.”
“We see countries like Spain and Italy, not to mention Greece, where the proportion of research and development has been decreasing which has not been compensated by private investment.”
This lack of private investment is a concern that constantly came up in the B20 discussions; despite the world being awash with capital, little is finding its way into infrastructure funding and business lending.
Falling R&D spending
Another area causing concern for the index compliers is the falling rates of research and development spending, noting that support for R&D efforts seems to have lost momentum in some countries with most growth in this area over the near future expected to take place mostly in China, the Republic of Korea, and India.
Innovation by Region
Rank in Region
GII 2013 Overall Rank
Country Name
Central and Southern Asia
1
76
India
2
79
Kazakhstan
3
86
Bhutan
Sub-Saharan Africa
1
40
Mauritius
2
51
Seychelles
3
53
South Africa
Southeast Asia and Oceania
1
7
Singapore
2
10
Hong Kong (China)
3
16
Korea, Rep.
Latin America and the Caribbean
1
41
Barbados
2
46
Chile
3
52
Panama
Northern Africa and Western Asia
1
15
Israel
2
30
Cyprus
3
36
United Arab Emirates
Europe
1
1
Switzerland
2
2
United Kingdom
3
3
Sweden
Northern America
1
6
United States of America
2
12
Canada
While the index was notable for its stability among the top ranking countries, there were stand out performers with the United Kingdom charging from tenth in 2011 to third in 2013 and second this year.
Along with ethnic diversity, the advantages of having deep, varied economies and societies is emphasised by the report.
“When you’re measuring all of these, you’re measuring the ability of a country to compete;” says Gurry. “The intensity of competition will only increase between countries in respect to both regulatory regimes but also between enterprises.”
For all the talk about the importance of innovation Lanvin sees limits to what governments can do; “innovation is not a matter that can be decreed or implemented by governments alone, government can give the right signals and create an environment.”
Creating a mindset
“In the end it is the dynamics between business, government, academia and civil society that create the right mindset for a country to become an innovator,” continues Lanvin.
Lanvin also observes that innovation is about more than technology, “clearly technological innovation will remain a critical component, but you should expect to see social innovation and political innovation.”
“When we need to address the major challenges of this planet like the environment you need more than technological innovation; you need creativity, new mindset and new attitudes.”
Much of the advice from business and political leaders is through a prism of privilege
“Why are you travelling by train?” I was asked by the expat project manager as I planned a site visit to a factory being built by our company on the outskirts of Bangkok.
For me, that two hour third class train trip was an opportunity to get out of the pampered bubble that is life as an expat in a country like Thailand and get a brief, if incomplete, picture of daily life in a rapidly changing nation.
Travelling Business Class
Business Class Syndrome — a view of the world seen through the prism privileged lifestyle that isn’t shared by most people — is a phenomenon that afflicts many of our business and political leaders who are insulated from the real world.
Over the past three days I’ve been dipping in and out of various economic forums as the B20 and the Young Entrepreneurs’ Alliance conference being held in Sydney this week ahead of the G20 Heads of Government meeting being held in Cairns next October.
Both events illustrate Business Class Syndrome as global experts travel the world discussing issues like youth unemployment, third world growth and startup businesses that are beyond their experience.
None of this is to say the speakers at these events were wrong or dishonest, just their ideas — however well informed and intentioned — are developed through a selective view of the world.
Taking the privileged view
That selective view has to be kept in mind when reading the recommendations of such experts. White, middle aged, western men don’t have a monopoly on the planet’s good ideas.
In the case to the Bangkok project managers the expats didn’t really care about what was going on; their job was to build and move on, which they (and I) did.
However I hope those hard seat journeys left me a little more understanding about Thailand than those who wouldn’t leave an airconditioned site hut.
We’re bad at setting standards but we have moved on from electrocuting elephants
A constant theme when new technologies appear is the inevitable war about standards that often sees bitter arguments over how the new methods should be used.
Over the centuries we’ve seen fights over railway gauges, video tape formats and even the shape of lighting conductors.
The struggle over lightning rods between the English and French camps in the eighteenth century was parodied by Jonathan Swift in Gulliver’s Travels where the two tribes fought over which end of a boiled egg should be broken.
Probably the nastiest dispute in modern times was the battle over DC and AC electricity transmission between Thomas Edison and George Westinghouse, a fight made worse by Edison’s former employee Nikola Tesla taking his patents over to Westinghouse.
The fight became so fierce that Edison actually electrocuted an elephant to illustrate how dangerous AC electricity would be to householders.
Tesla and Westinghouse eventually won the argument, but it came at a cost to Topsy the Elephant.
While we may draw the line at electrocuting elephants in these enlightened days, we aren’t much better at settling standards. That’s why it’s fascinating watching how technologies like the smart car and the connected home will evolve.
