Paul Wallbank – Brilliant Communications

Tag: economy

  • Acknowledging the human costs of disruption

    Acknowledging the human costs of disruption

    As we talk of the dramatic changes facing business and society today it’s worthwhile noting a  much greater displacement happened in the Twentieth Century as electricity, the motor car and communications drove the greatest increase in standards of living that humans have ever seen.

    Our great-great grandparents lived through a period of change far greater than that we will see as their lives and communities were radically transformed.

    Many common jobs in the early 1900s had ceased to exist by the middle of the century as cars replaced horses, mains electricity replaced town gas and refrigeration changed shopping habits. In the second half of the century affordable motor vehicles and television saw our cities reshaped around suburban life, a process now being reversed.

    The structural change to economies saw a shift in population and jobs; a hundred years ago thirty percent of the US labor force was employed in agriculture, today it’s around two percent. Despite the shift, jobs were eventually found for those displaced from farms.

    Shifting from an agricultural economy to an industrial society didn’t come without costs however,  the price paid by the affected communities and individuals was huge as documented by Steinbeck’s Grapes of Wrath and Dorothea Lange’s photos.

    While it’s unlikely we’ll see the deprivation of The Great Depression repeated in a modern welfare state, it’s important to recognise the real human costs of technological change. For politicians and community leaders it could define how history judges them.

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  • Where will the digital leaders come from?

    Where will the digital leaders come from?

    Last Thursday in Sydney a group of industry groups, telcos and local councils launched their 2030 Communications Visions initiative; a project “to shape a digital vision and set of goals for Australia to achieve global digital age leadership”.

    The project is a worthy one, particularly given the failure of Australia’s National Broadband Network, which I’m writing about early next week in Technology Spectator however one thing that bugs me is what exactly is ‘digital age leadership’.

    If we look at the rollout of technologies like the motor car, electricity or telephone through the Twentieth Century it was a mix of private companies, community groups and governments that championed the development of roads, mains power and phone systems. People either demanded their towns became connected or raised the capital to do it themselves.

    So on one level, the champions need to be us. We have to lead our communities and industries by using the technologies and showing what can be done, that also makes our businesses more likely to succeed in the future.

    On another level, we need to consider the genuine leaders of the ‘electrical age’ or ‘motor car age’; people like Thomas Edison and Henry Ford built businesses that led the world and still exist today.

    For countries, it’s no coincidence that the United States is the richest nation on the planet after having most of the leading business in their industries over the last hundred years.

    That latter point is really what the Digital Visions project is about; do Australians want to remain a wealthy nation in the Twenty First Century?

    Governments have a role in this, as the UK is showing, and political leaders need to be encouraged to take the digital economy however governments can only do so much and successes like Silicon Valley are more a fortunate by product of spending rather than the consequence of strategic policy.

    Ultimately, leadership starts with us — we can’t afford to wait for governments, big business or someone else to take the reigns.

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  • The Economist’s World in 2015

    The Economist’s World in 2015

    One of the annual features in The Economist is it’s World In… edition where the magazine makes predictions on the year ahead.

    For 2015 the magazine has its usual wide range predictions; some safe, some risky and some out of left field, like Papua New Guinea topping the world growth lists for next year on the back on a new LNG plant comping online.

    Economy: The fastest-growing economy in the world in 2015 will be Papua New Guinea, where GDP will expand by nearly 15%. China will drop its growth target to 7% (from 7.5%). Overall, global growth will be higher in 2015 (3.8%) than in 2014 (3.2%).

    Business: Singapore tops the Economist Intelligence Unit’s global business environment rankings for 2015. Watch out for Xiaomi, a Chinese mobile-phone maker, as it continues its meteoric rise and goes global. And expect a welcome return, at least in some places, to the nine-to-five culture in the

    Interest rates: In the United States and Britain, where growth is relatively robust and unemployment is coming down, interests rates will start to rise in 2015, ending a long period of ultra-low rates. In the euro zone and Japan, by contrast, central banks will continue to ease monetary policy, to battle against deflation. The diverging paths of the main central banks will lead to more volatility in equity,

    Statistical landmarks: It will be a year of striking “crossovers”, as America overtakes Saudi Arabia to become the world’s biggest oil producer, China overtakes America to become the world’s biggest economy (measured at purchasing-power parity) and Facebook overtakes China in terms of its

    Elections: Britain will have another hung parliament after its general election in May, with David
    Cameron probably remaining prime minister. But Canada’s leadership is likely to change hands in an October election, with the Liberals’ Justin Trudeau taking the helm.

    The environment: A deal of sorts will emerge from the Paris summit in December 2015. Hydrogen- powered cars will hit the road, as Toyota and Honda launch the first mass-market fuel-cell models. And Australia will be in the global spotlight as the UN decides whether the Great Barrier Reef should be put on the endangered list.

    Technology: “Wearable” technology will be all the rage, thanks to the launch of the Apple Watch and other devices. Virtual-reality firms will overcome the cost and technology problems that have prevented their products from becoming mass-market hits. And mobile phones will become mind-readers, thanks to “anticipatory computing”, which enables them to trawl their users’ data to predict events

    Sport: Australia will win the cricket World Cup, New Zealand will win the rugby World Cup and the United States will win the women’s football World Cup.

    Space: America’s New Horizons spacecraft will fly by Pluto, after a journey of nearly nine years – maybe igniting a campaign to reinstate Pluto as a fully-fledged planet from its current “dwarf” status.

    Some of the predictions are obvious while others may be a bit longer term than 2015. Overall it’s an interesting range of predictions and in the next few days I’ll post an interview with two of The Economist’s editors, Vijay V. Vaitheeswaran and Daniel Franklin, justifying their forecasts for the year ahead.

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  • Reframing the economic debate

    Reframing the economic debate

    “We need to stop the drift in politics and economics,” says Irish economist David McWilliams.

    McWilliams is talking about Ireland and asking where the nation goes for the next two decades as European agricultural support programs wind up and Irish tax advantages erode.

    That conversation though is one that every economy, every nation and every community needs to be having in the face of a rapidly changing world.

    Assuming that what’s working, or muddling along, today will be successful tomorrow is a brave belief.

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  • Returns in a low growth world

    Returns in a low growth world

    Today GE had their At Work conference in Sydney where CEO Jeff Immelt was interviewed by Westfarmers’ boss Richard Goyder.

    One of the key messages from Immelt in his interview with the Australian conglomerate’s CEO was that finding growth in a flat global economy is going to take hard work and creativity; just relying on increased domestic spending is not longer an option.

    Immelt was particularly pointed about the developed world’s economies, “the US is best since the financial crisis, growth is broad based but it’s still in the two to two-and-a-half percent range. It may be that’s the new normal.”

    “Europe and Japan are pretty tough, forty percent of the world’s economy is still difficult, not going downward but stable and flat.”

    Preparing for a slow growth world

    “We’ve prepared ourselves for a slow growth world but one where you can invest in growth.”

    “There’s still opportunities out there,” Immelt observed. “We’re going to have to make our own growth.”

    Part of that growth story relates to the end of the consumerist era where debt funded consumer spending, particularly in the US, drove the global economy.

    “We are coming out of a time period of the last ten or fifteen years where the US grew four and half percent every year with no inflation. So the US was the dominant economy in the world during the 1980s and 1990s.”

    “We knew that was not going to be the same, so we’re in a world with no tail wind where we think greater focus on things like R&D, globalisation and things like that which will be critically important.”

    Changing business focus

    One of things Immelt did after the global financial crisis was to change the focus of the business away from the consumer finance division that had been a river of gold over the last thirty years back to being an industrial infrastructure company.

    “Everyone needs to paranoid about relevancy and what they do great in the world today. There is no shelf life for reputation or anything else.”

    “The engine of growth in the US when it was growing at its best was the US consumer, both in the combination of their own wealth and in taking on leverage. That was the engine of growth from 1980 to 2007.”

    “It ended badly, but those were big engines of growth. What will be the next engines of growth?” Immelt mused.

    Asian consumers to the rescue

    Immelt sees the rise of Asian economies as being the next growth drivers with over billion consumers rising in affluence.

    Whether those Asian economies can generate the growth that the hyper-developed economies of North America, Europe and Japan were able to provide during the past thirty years remains to be seen given China’s, and most of Asia’s, consumers having nothing like the West’s spending power.

    The truth is we’re decades off Asia’s huddled masses having the economic strength to carry the global economy in the way the western world’s consumers did for the closing decades of the Twentieth Century.

    For economies like Australia that are largely based upon domestic consumption funded by debt, this will mean a massive redirection of the economy away from renovating houses to investing in productive industries.

    Immelt’s message to business leaders is clear; don’t rely on a rising tide of domestic growth to keep you afloat. Companies are going to have to find new markets and products if they want to grow, waiting for customers to arrive is no longer an option.

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