Paul Wallbank – Brilliant Communications

Tag: economy

  • Cutting through Australia’s innovation rhetoric

    Cutting through Australia’s innovation rhetoric

    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.”

    Thin pipelines

    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.

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  • China’s rocky economic pivot

    China’s rocky economic pivot

    As the Chinese economy adjusts to new economic realities, some of the costs are beginning to be felt.

    In China’s North-East where the economy is dominated by state owned enterprises in staid heavy industries, workers are moving to more promising regions and local leaders are worried.

    However with the Chinese economy pivoting, things aren’t doing so well in the more laissez-faire South Eastern provinces either with workers giving up their precious New Year’s holidays to protest unpaid wages and unfair treatment.

    For the Chinese government, this worker unrest is a serious problem. How the country’s leaders try to address the causes could well have global ramifications as the world’s economy faces the reality of massive economic overcapacity.

    Out of the box thinking is needed, but it may not be enough to overcome the fears and needs of ordinary, angry workers. What is clear is that an economic pivot is never smooth.

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  • Silicon Valley and the rise of Chinese innovation

    Silicon Valley and the rise of Chinese innovation

    Silicon Valley could be soon surpassed by China warns Uber’s Travis Kalanick.

    While sceptics could dismiss Kalanick’s claim as his simply sucking up to his hosts in Beijing where he made the comment, or put the statement down to a PR campaign for his company’s renewed push into China, there may be a kernel of truth.

    If for nothing else, the Chinese diaspora across the Pacific Rim is known for its entrepreneurial drive. From Bangkok to San Francisco and Sydney, Chinese communities have a reputation for being full of smart and hardworking business people.

    Added to the Chinese cultural aspect is history. Fifty years ago car makers in Detroit and motorbike manufacturers in Birmingham, England, scoffed at the idea that their Japanese competitors could overtake them.

    Within a quarter of a century they were proved wrong.

    Another concern for Silicon Valley is that it could be losing its edge. As veteran journalist Tom Foremski points out, increasingly workers in the Bay Area live in a privileged bubble.

    Foremski discusses how younger, creative and innovative workers are finding opportunities in cheaper and more diverse American cities like New York’s Brooklyn.

    America’s diversity, and depth of its economy, will continue to be a strength for the foreseeable future but Americans, particularly those in the Bay Area, shouldn’t be resting on its laurels.

    Travis Kalanick’s warning might be dramatic, but it isn’t beyond the realms of possibility.

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  • Where the jobs will go

    Where the jobs will go

    That automation is having a profound impact on existing jobs is beginning to be appreciated by governments. A study by the New South Wales government’s Parliamentary research service examines what the effects will be on the Australian state’s economy.

    Like equivalent overseas studies, the report finds over half the state’s jobs – a total of 1.5 million positions – could be at risk from computerisation.

    An interesting aspect of this is the bulk of the impacts being felt in the mining, construction and logistics industries. While there’s no doubt those sectors will be hard hit, particularly for lower skilled workers, the assumption is higher level positions in management and supervisory roles won’t be as greatly affected.

    Examples of this include ‘professionals’ only being at a 4.6% risk of being displaced and ‘General Managers’ at 5.0%. This compares to labourers at 96.1% and 95.7% of ‘filing and registry clerks’ losing their jobs.

    While there’s no doubt the lesser skilled roles are at immediate risk, and have been for decades, the rise of artificial intelligence and business automation are increasingly going to put management roles at risk.

    Quibbles aside, the report is a good read on the impacts of automation and computerisation on what has been one of the western world’s more successful economies.

    The hollowing out process of Australia’s middle classes it describes show that phenomenon is not just confined to the United States and this probably creates the greatest challenge to politicians as populists seek to blame foreigners and minorities for much of the population’s declining fortunes.

    Almost every government in the world is facing these issues and the efforts of public servants and economists to accurately describe what’s happening has to be applauded and encouraged.

    For voters and workers, reading these reports to understand the forces changing their industries and communities is essential to making informed choices at the ballot box and the workplace.

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  • Silicon Valleys of the Twentieth Century

    Silicon Valleys of the Twentieth Century

    The rise and fall of industrial hubs is a topic that fascinates this blog and the excellent BBC and US National Public Radio series Six Routes to a Richer World discusses how countries as disparate as Germany, Brazil, China and the United States are carving their own paths to prosperity in the 21st Century.

    In the US segment, the show looks at one of America’s industrial centres of last century – Dayton, Ohio.

    The home of the Wright Brothers, Dayton also saw the invention of the cash register, air conditioner and even the self starting motor. In the early part of the Twentieth Century it held the most patents per capita of any US city and workers flocked to the region for high paying manufacturing job.

    Manufacturing, and research, is largely gone from Dayton today and the question posed is could the successful cities of California’s Bay Area follow a similar path this Century.

    Whether Silicon Valley and San Francisco fade will be a matter of historical forces that are difficult to see right now, but the likelihood can’t be underestimated.

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