Society and business in the 21st Century
This blog has written a lot about Singapore in the past, this speech by the country’s Prime Minister sums it up.
For other nations, particularly Australia, it’s time to stay paying attention to how the global economy is changing.
Singapore may not have all the answers and its government’s authoritarian tendencies may work against its ambitions to be a global tech and creative centre, but at least the government is staking a position in the new economy.
It’s been a bad week for the social media service Twitter with its stock pounded after the leak of poorer than expected results.
Writer Matthew Ingham says Twitter lost its way five years ago when it started closing down access to third party developers, a move that hurt the service’s growth and user adoption.
Twitter’s move was greeted with disappointment at the time and many developers gave up working on the company’s APIs.
With the growth of third party applications stunted, there was little reason for new users to come on board and so Twitter is now disappointing the market with its results.
Basically Twitter CEO Dick Costolo and his team reaped what they sowed in restricting access; they kept control of their data but it’s cost them users and hurt their share value.
Twitter’s woes show that the economics of cloud and social media services reward business that share data. While there may be some commercial and legal limits to what information can be shared, the default position should be to make data available.
In an information rich society, those who contribute the most get the rewards. This is the point Twitter’s management missed.
Science, Technology, Engineering and Mathematics studies are essential to the future economy a PwC study shows.
When discussing how industries are changing, the constant question is ‘what will happen to today’s jobs?’
Even in the Future Proofing Your Business webinar earlier this week this question was asked by a number of the small business owning listeners.
That concern forms the basis of the “A smart move: Future-proofing Australia’s workforce by growing skills in science, technology, engineering and maths” report released by accounting firm PwC yesterday in Sydney.
PwC’s report warns 44 per cent of current Australian jobs are at high risk of being affected by computerisation and technology over the next 20 years.
The report highlights that Science, Technology, Engineering and Maths (STEM) subjects are critical in the jobs that are going to benefit, or be created, by that technological change.
Sadly for Australia, and most of the western world, STEM courses are deeply out of fashion with students preferring to study in business related courses such as accounting, commerce and law.
As PwC flag, those industries are at risk with accounting at the top of the list for job losses.
On the other hand, PwC forecasts professions in health, education, personal care and – worryingly – public relations will be in increased demand. Something that may underestimate the effects of technology on those industries.
PwC’s main contention is that economies which want to compete in the new economy are going to need more STEM graduates.
The shift to STEM education is something the OECD highlighted in its recent report, OECD report How is the Global Talent Pool Changing?
In their report the organisation forecast that the number of students studying around the world would increase from 130 million today to 300 million by 2030 with all of that growth being in Chinese and Indian STEM courses.
Already that science and engineering emphasis is clear in today’s numbers.
To counter the drift away from STEM courses among students, PwC suggests a campaign to engage young people while they are still at junior school.
Sadly, that’s unlikely to work in Australia given the nation’s economy is built upon property speculation driven by the wealth effect of rising real estate prices.
Two nights before the PwC report one of the highest rating shows on Australian television came to its 2015 finale. The Block, which features couples renovating and flipping properties, finished its season the apartments being sold at auction at record prices and the contestants pocketing between 600 and 800,000 dollars for a few month’s work.
For young Australians the message from their parents and society is clear; don’t innovate, don’t create, just buy as much property as you can afford.
In the US on the other hand, the business heroes are the builders of new enterprises; people like Steve Jobs, Elon Musk, Bill Gates, Mark Zuckerberg and the founders of Google.
Other countries like Israel, India and China, are aspiring to be the next generation of tech leaders. That’s what’s necessary to build a dynamic economy.
As the PwC report claims, “the jobs most likely to endure over the next couple of decades are ones that require high levels of social intelligence, technical ability and creative intelligence”
Harnessing that combination of social, creative and technical intelligence is going to be one of the challenges for all economies in a decade of change.
Getting the supply of STEM skills right will be essential for success for all countries at a time when digital technologies will drive most industries.
Telstra opens its Muru-D incubator program into Singapore as the company expands its Asian ambitions
Today Aussie incumbent telco Muru-D opening in Singapore.
Muru-D is loosely based on Telefonica’s Wayra incubators that the Spanish telco has set up across Europe and Latin America.
Wayra’s fortunes have been mixed recently with the incubators coming off badly in the company’s restructure last year and it’s interesting that Telstra are copying the model of opening in strategic neighbouring markets.
Complicating matters is Telstra’s Singapore based rival Singtel has its own chain of incubators Singtel Innov8. Singtel’s model is different in that they sponsor incubators, Sydney’s Fishburners for example, rather than set up their own Wayra or Muru-D style operations.
So Telstra’s moving into Singapore could be seen as another move by the Aussie incumbent to take on Singtel on it’s own home ground, something that will be assisted by the recent acquisition of PacNet.
Also notable is the Singaporean government’s support for Telstra’s with Kiren Kumar, Director of Infocomms & Media at the Singapore Economic Development Board, welcoming the launch as enhancing the city’s repuation as “the innovation capital of Asia”.
Telstra’s move is another showing how telcos are trying to move out of being utilities along with Telstra’s need to grow out of the domestic Australian market it now dominates.
For Telstra both moves are well outside the company’s historical expertise, it will be interesting to see how successful they are.
It bills itself as ‘the coolest little capital in the world’ however something is going on in Wellington, New Zealand’s capital city, as its technology sector takes off.
Last week I was in Wellington, partly to attend the Open Source, Open Society conference and also to have a look at how the city is doing so well as one of the leading startup cities.
While I’ll have a number of posts about the city, startup scene and conference over the next couple of weeks, it’s worthwhile noting some basic impressions that came from the visit.
The size of the city, Wellington is a small town with a population of 200,000, brings both advantages and negatives for the business and startup communities.
One of the advantages of being so small is the business community is relatively accessible, a number of entrepreneurs told me how easy it is for them to find the specialists they need given there’s usually two degrees or less separation between everyone.
Normally having a small business community means it gets insular, particularly in a capital city where the business of government can create a bubble effect. What’s notable about Wellington is most of the businesses are looking outward towards the US, Australia and East Asia.
The city’s intimate business environment also improves trust within the community as one Aussie expat told me, “if you rip off anyone in this town pretty well everyone knows about it by the end of the weekend. It keeps everyone honest.”
Being small, the city makes it easy to walk around which compounds the business networking opportunities. A businesswoman, who is also a lifelong Wellingtonian, observed how she allows an extra 15 minutes to walk anywhere as she finds herself stopping for conversations.
Having three successful businesses in the city – TradeMe, Xero and Weta – has both its upsides and disadvantages with the bigger players tending to dominate the employment market and funding opportunities.
Of the three businesses, TradeMe is the most domestically focused while Xero is growing in the tech sector and Weta is the most diverse with its range of special effects and movie production services.
With Weta, the business is exposed to the vagaries of the global film industry as Statistic New Zealand survey of movie production shows.
The film industry is one of Wellington’s important employers with the sector supporting around two thousand businesses in the city, although I didn’t get time to explore how much of an overlap there is between the tech and film industries.
TradeMe is largely a domestic focused business that provides a steady work and skills base for the local workforce. While it’s the least internationally exposed business of the three, it’s probably also the most consistent.
Xero, like Weta, is a globally expanding business and its success is attracting investors and expats from North America and Australia. While its the smallest of the three it’s probably the business that has done the most raise Wellington’s profile in the tech industry.
What’s particularly notable are the number of coworking spaces in Wellington ranging from the straightforward Bizdojo startup space and Creative HQ through to the quirky Enspiral coworking space.
The availability of shared spaces makes the city attractive to startups and adds to the vibrancy of the local tech community which links into hipster pursuits such as craft beer.
Communities like Enspiral also add another dimension to the local startup and creative industries environment by connecting entrepreneurs with their peers and service providers.
One aspect I didn’t get to explore while in Wellington was the relationship between the city’s business community and educational institutions, particularly Victoria University.
Similarly I didn’t get the opportunity to discover how much of a role local and national governments have had in the development of Wellington’s tech scene. It seems to be relatively hands off although some government agencies have supported Weta with co-investment funds.
What I did meet though were plenty of immigrants; from Croatia, Denmark, Holland, the US and, most of all, Australia.
Talking to some of the US and Australian expats it was clear that lifestyle combined with opportunity with lifestyle, as one Aussie emigre told me “I couldn’t get the water views, access to the city and be able to walk to work back home like I can here.”
While these are superficial thoughts that I’ll expand on over the next week as I decipher notes and listen to interviews, there’s no doubt that Wellington is carving a position as one of the global centres of the new economy. How big it becomes will depend on how many other businesses grow to the size of Xero or Weta.
Today social media analytics startup Vintank announced their acquisition by the W2O Group, a network of data driven marketing and communications firms.
W2O’s acquisition shows how data analytics and visualisation is increasingly an important tool for management in a world where businesses are drowning in information.
Last year Vintank co-founder Paul Mabray spoke to Decoding the New Economy about the company and how social media data is a valuable tool for the wine industry.
“The wine industry is last industry to have been changed by internet,” Mabray says. One reason for this in his view is how that the sector hasn’t had a disruptive startup like Yelp or Open Table to drive change and upset incumbents.
Despite the wine industry’s reluctance to adopt digital technologies, social media and the disruption of established media channels is having a profound effect on the sector’s marketing and sales.
“In the old days there was a playbook originating with Robert Mondavi in the 1970s which is create amazing wine, you get amazing reviews and you go find wholesalers who bring this wine to the market,” Mabray told Decoding the New Economy during a visit to Australia in 2014.
Mabray also flags the massive growth in the wine industry as being one of Vintank’s driving forces, “the global proliferation of brands the increase of awareness and consumption patterns where people like wine more, those playbooks didn’t work in 2009 when the crisis started.”
A proliferation of new competitors coupled with disrupted communications channels isn’t unique to the wine industry, the attraction Vintank has to the w2O Group’s president Bob Pearson; “VinTank provides us with a way to create agile audience engines for a brand, where we can learn what an audience is doing online, understand what content they like.”
For many businesses social media is a both an opportunity and a mystery; while customers are telling the world what they’re buying through services like Facebook and Twitter capturing, managing and using that information remains a challenge.
As Robyn Lewis of Visit Vineyards whose database holds details on over 30,000 Australian wineries and associated tourism business says, “the gold is in the data.”
Panning for that gold is Emma LoRusso of Sydney social analytics startup Digivizer who told Decoding The New Economy two years ago “the truth is in data”. Services like Vintank, Salesforce’s Radian6, Klout and startups like Digivizer attempt to add context to that data.
Another aspect of Vintank’s technology is the ‘geofencing’ of information, creating a virtual geographic perimeter so only data relevant in that region is flagged. As well as reducing noise, this increases the value to local wineries and tourist operations.
In some respects the geofencing is possibly the most powerful part of services like Vintank as it allows regional operators to focus on visitors and customers to their districts rather than worrying about national or global activity.
W2O’s acquisition gives Vintank access to a broader market outside the wine industry as well as deeper data analytics capabilities. For W20 the purchase adds to the social media tools the company can offer.
The Vintank deal with W2O shows how the marketing and advertising industries are increasingly becoming data driven. For other business functions this is true as well.
For businesses of all types, understanding the data pouring into their companies is going to be the difference between success and failure in an increasingly digital world. Providing those tools to do so is one of the great opportunities in today’s economy.
Square enters the small business lending space, will be they successful in a very competitive field?
Banking has always been a data driven business, understanding borrowers and the risks they present is one of the essential skills in making money from lending.
The new wave of payment startups present a new way for lenders to analyse risks; with real time data aggregated across businesses and regions, lenders can quickly decide wether a borrower is likely to able to pay the money back with the conditions asked for.
Payments company Square in its latest pivot has partnered with Victory Park Capital and claims to have extended more than $100 million in capital to more than 20,000 merchants writes the New York Times.
Like other payment companies that have entered this market, Square uses their own deep understanding of their customers’ incomes to be able to make a data based decision on the creditworthiness of applicants.
Square also offers ancillary data-driven products created for small businesses. The new instant deposit product, which is still in testing and will be fully available in the spring, will give businesses faster access to money they put into a debit account. And the company’s new charge-back protection service will cover some disputes between consumers and merchants.
Those products also rely on data that Square has collected. They will be available only to small businesses that have a solid financial track record, based on a history of accepting payments with Square.
Square is by no means the first business to do this, last year we wrote of PayPal’s move into small business lending and Point of Sale hardware manufacturer Verifone retreated from the market two years ago calling it ‘fundamentally unprofitable.’
The competition in the space and the fact assessing financial risks isn’t exactly a core competence of Silicon Valley start ups indicate Square’s and other companies may find small business lending a tough business as well.
Despite that, small business lending is a field that is overdue for disruption. With companies like Apple, Google and Amazon all offering payment services, the logical expansion is into evaluating risk and profit.
It may not be Square, Verifone or PayPal who ultimately redefines the sector, but it will be one of today’s tech businesses that does.
