Society and business in the 21st Century
Some days you wake up and it’s black.
If you are lucky – and sometimes you are really lucky – later in the day you get the opportunity to speak to folk who are really changing the world.
Those are the folk who can light up a dark world.
And sometimes you’re lucky enough to speak to them.
In researching the tech angle of the 2013 Australian Federal budget for Technology Spectator last night one thing kept really bugging me – the government’s cap on tax deductible education expenses.
The decision to cap self education deductions was made earlier in the year by Treasurer Wayne Swan.
The Government values the investments people make in their own skills and recognises the benefits of a tax deduction for work related self-education expenses. However, under current arrangements these deductions are unlimited and provide an opportunity for people to enjoy significant private benefits at taxpayers’ expense.
So the government is going to save $500 million dollars over the next few years by capping legitimate educational expenses on the grounds they were ‘unlimited’.
We could ask why negative gearing continues to be unlimited where taxpayers claiming the expenses of property speculation cost the Federal government eight billion dollars last year.
So Treasurer Wayne Swan says a salaried worker has effectively no limits on claiming losses from property speculation against their taxes but is subject to a ludicrously low limit for claiming education expenses.
This one comparison – between negative gearing and self education expenses – shows the magic pudding fairyland that Australia’s political leaders live in and their cowardice.
What’s bizarre about this policy is that most industries are undergoing major changes and almost every worker will have to reskill a number of times through their careers.
Many of those workers will be able to get their courses and education expenses under the limit, many others won’t.
As the New Australian points out, Wayne Swan – like most lifetime Australian political apparatchiks – has never to worry about reskilling as the party has nurtured and cared for him all his adult life.
In the real world though, Australia’s economic future will depend on the workforce picking up the skills to operate in rapidly changing times.
That Australia’s politicians and economic policies are focused on encouraging property speculation over skills only guarantees mediocrity.
Although mediocrity might be the world that suits Wayne Swan, Tony Abbott and the rest of Australia’s political classes.
It seems a far jump from running a gaming platform to a remote access software company with a focus on the internet of machines, but that’s the journey remote access company LogMeIn and its CEO Michael Simon has travelled.
“Anything that could be connected will be connected in the next decade.” Micheal told me in Sydney last week and it’s where he sees the next step for the company he has led since its founding in 2003.
LogMeIn grew out of a team that formerly worked for uproar.com, an online gaming company sold to a division of Vivendi Universal for $140 million in 2001.
Two years after the sale Michael, who had been CEO of Uproar, and a team of ten engineers who formerly worked for the company thought they could solve the complexities of accessing computers remotely.
For geeks and big business, accessing your computer across the internet in 2003 wasn’t much a problem however it involved configuring software, punching holes in firewalls and configuring routers.
The LogMeIn team wanted to find a way to make this technology cheap and easy for small businesses and homes to use.
A decade later they employ 650 staff, half of whom are engineers, and have twenty million users of their product.
The vast majority of those users are using LogMeIn’s free services – Simon estimates that over 95% of users are using the free version.
In this, LogMeIn is one of the leading examples of the freemium business model – offering a free version of a software product and premium paid for edition with more advanced features.
One leader of the freemium movement was the Zone Alarm firewall, a product which earned its stripes in the early 2000s at the peak of the Windows malware epidemic.
Today one of Zone Alarm’s veterans, Irfan Salim, sits on the LogMeIn board along with two former executives of Symantec, the company whose PC Anywhere and Norton Internet Security products competed with both Zone Alarm and LogMeIn.
While LogMeIn has done well over the last ten years, the market today is very different to that of a decade ago with cloud computing technologies taking much of the need for remote access software
Mike Simon sees these changes as an opportunity with the computer industry having gone through three phases – the PC centric era, the mobile wave and now we’re entering the internet of things.
To cater for the mobile wave LogMeIn has released Cubby, a cloud based storage system that competes with Dropbox, Google Drive and Microsoft’s Skydrive, but Simon has his eye on the next major shift.
The internet of things is a crowded market, but Simon believes companies like LogMeIn have an advantage over the telco and networking vendors as businesses with freemium and startup cultures look for ‘pennies per year’ rather than the ‘dollars per device’ larger corporation hope to make.
It’s a big brave call, but with the market promises to be huge – General Electric claimed last year nearly half the global economy or $32.3 trillion in global output can benefit from the Industrial Internet.
That’s a pretty big ticket to clip.
Whether Michael Simon and LogMeIn can achieve their vision of being integral part of the Internet of things remains to be seen, but so far they do have success on their side.
“The biggest risk for Australian business journalists is being sued into oblivion” said Paddy Manning at a Walkley Media Talks Panel in Sydney last Thursday.
Joining Paddy on the panel was The Australian’s Anthony Klan, the ABC’s Tikki Fullerton and moderator Peter Ryan who looked at the challenges facing business journalists seeking to separate truth from business PR spin.
The problem facing Australian business journalists is a legal system that favours those who want to suppress facts – it’s a game only the wealthy can play and rich fraudsters use it well as we’ve seen over the years in corporate Australia.
Manning described one occasion where he obtained information on a prominent businessman’s affairs and, within hours of asking the gentleman for comment, found he and the Fairfax had been hit with a court injunction with such vague wording it may have any of his employer’s outlets from mentioning the man at all.
These injunctions were the rule, not the exception. Manning went on to tell how Sydney Morning Herald business writer Michael West spends one day a week on legal matters while his colleague Adele Ferguson was even preventing from writing about documents that were on the public record.
Klan trumped that with the seventy injunctions he’s received over stories on the mortgage debenture scandals, an ongoing sore on Australia’s investment industry which threatens to steal many retirees’ savings.
The problem of pre-emptive injunctions stemmed from the ethical requirement of giving a ‘fair opportunity for reply.’ In seeking comment from those engaged in shoddy – or downright – illegal practices, it gives those with something to hide the opportunity to run to the courts who are all to willing to issue wide ranging orders.
Interestingly, Justice Leveson of the UK inquiry into press conduct made an observation about the disadvantage mainstream media has before the law during his visit to Australia earlier this year.
online bloggers or tweeters are not subject to the financial incentives which affect the print media, and which would persuade the press not to overstep society’s values and ethical standards.
While Leveson had it wrong about financial incentives, it’s actually the media’s ethical standards which are the restraining influence. Professional journalists quite rightly don’t like breaching their trade’s code of conduct.
As Leveson opined, bloggers don’t necessary hold themselves to the same standards so they are more likely to publish and be damned.
Where Leveson was utterly and totally wrong is bloggers’ immunity to the law.
Bloggers rejoice in placing their servers outside the jurisdiction where different laws apply. the writ of the law is said not to run. It is believed therefore that the shadow of the law is unable to play the same role it has played with the established media.
That’s nonsense and it’s a matter of time before a blogger goes to gaol for disobeying a court. When that does happen it will be interesting to see how the established media reacts to this.
From the panel discussion it was quite clear that professional business journalists have no intention of breaking the law or their code of ethics, although all are united in their determination to protect sources if they were order to divulge by a court.
What really stood out from the panel was how the law is being used to stifle examination of Australian business behaviour. In the audience Q&A, veteran reporter Colin Chapman pointed out Australia sits at 26th on the World Press Freedom Index.
The lack of a truly free press could just be seen as journalistic hand wringing, but there’s a real world effect of this – those retirees who will be ripped off by crooked financial advisers and mortgage funds would have a better chance of protecting themselves were they able to see Anthony Khan’s articles on the topic.
Just as crooks have been able to prosper in the absence of press scrutiny, so too have supine, incompetent and lazy regulators.
All too often agencies – such as the ACCC, ASIC, ASX or ATO – have only been woken from their slumbers when prodded by a media scandal, lack of scrutiny has allowed government regulators to get away with not doing their jobs.
This poor enforcement is reflected in international comparisons. The World Bank ranked Australia as 70th in the world for protecting investors, way below Colombia, Thailand or Kazakhstan.Australian business reporters find themselves in a difficult position being caught between the tightening economics of the media industry and a legal system that is more focused on protecting knaves rather allowing society to be informed.That problem facing journalists is a problem for every Australian who’s being kept in the dark about their investments.
The Great ATM Heist, where a crime gang subverted the credit card system, could well be the digital equivalent of the Great Train Robbery of the 1960s.
While the logistics of the operation are impressive with hundreds of accomplices across twenty countries, the real moral from the story comes from how the gang targeted outsourced credit card processing companies to adjust cash limits.
Again we see the risks of throwing your problems over the fence, a system is only as reliable or secure as the weakest link and, regardless of how tight commercial contracts are, outsourced services can’t be treated as someone else’s concern.
No doubt banks around the world will be having a close look at their systems and how they can trust other organisations’ outsourced operations.
Whoever runs your social media feed is an official spokesman, it’s important to choose the right person and give them authority.
After last week’s Associated Press hack and the stock exchange fallout, regulators are struggling with implications of social media and informed markets.
In a speech delivered last week the Australian Securities and Investments Commission’s Deputy Chair Belinda Gibson and Commissioner John Price gave some refreshing commonsense views on how businesses should handle public information.
The continuous disclosure advice given by Price and Gibson is aimed at meeting the requirements of Australian corporate law, but it’s actually good social media advice.
Having a nominated contact person with requisite organisational knowledge is possibly the most important point for any organisation.
Even if you think social media is just people posting what they had for lunch or sharing cute cat pictures, it isn’t going away and those Twitter feeds and Facebook pages are now considered official communications channels.
The intern running your social media is now your company’s official spokesperson. Are you comfortable with this?
A good example of where this can go wrong is the Australian Prime Minister’s Press Office where an immature staff member has been put in charge of posting messages. The results aren’t pretty.
The funny thing is the Prime Minister’s office would never dream of some dill getting up and saying this sort of thing on her behalf, yet allows an inexperienced, loose cannon put this sort of material in writing on the public internet.
Here’s Twenty Rules for Politicians using the Internet.
On a more mature level, the ASIC executives also have some good advice on writing for social media.
Don’t assume that the reader is sophisticated or leave readers to read between the lines. Companies need to highlight key information and tell it plainly.
Given the stock market movements following last week’s Associated Press Twitter Hack it may be time to reconsider the way exchanges and listed companies share and control information.
One of fundamental principles of modern stock exchanges is that the market is fully informed – that everybody buying or selling security gets access to the same information at the same time.
In an Australian context, this is covered by a term called ‘continuous disclosure’, should a company’s management become aware of any issue that could affect they must advise the market immediately.
What’s interesting with this principle is the way that information needs to be made public, specifically clause 15.7 of the ASX listing rules.
An entity must not release information that is for release to the market to any person until it has given the information to ASX and has received an acknowledgement that ASX has released the information to the market.
This puts the Australian Securities Exchange, a private company with an almost monopoly position in the Australian investment community, in the position of being the ultimate gatekeeper of knowledge.
While there’s good regulatory and probity reasons for having a central clearinghouse – that the clearinghouse itself has some serious conflicts of interest is another matter – one has to wonder how long its position can be retained in a world where information is moving fast.
It may be however that we’re in a passing phase as the financial of the global economy has reached a stage where no stock exchange, futures market or clearinghouse can manage the data that’s flowing through it.
Time will tell, but the markets themselves are finding other ways to inform themselves.
