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John Sheridan

John is CEO of Digital Business insights!

The future of work isn't the issue... the future of jobs is.

Banks don’t invest in small business any more. They promote credit cards instead. No social contract. Only dividends and shareholders.

They will only lend money with a lien against property, which then makes property even more collectively important as a backstop against financial disaster, and increases the risk for everyone.

We cannot build Australia’s future through investing everything into one non-productive asset class - housing. That just steals investment from scaleups and startups. It steals investment from farmers. It steals investment from manufacturers. It steals investment from small business.

And it pumps up the housing bubble, because there is nowhere else to invest money. Central banks across the world have driven interest rates so low that the traditional investment options of bonds, shares and bank deposits are broken.

Leaving property the only choice.

Which then makes housing permanently unaffordable for young people who actually want to live in their own home. Not just buy and rent out. And the government supports this.

We are then informed that a candidate for the United States presidency has paid no tax for 18 years. Is that something to be proud of? The act of a genius?

All people and organisations earning money by selling labour, goods, and services should pay tax in the country where the money is earned.

Taxes pay for education, health, defence, social security, welfare, services, roads and infrastructure, social stability and even parliamentary salaries, so what is the problem with paying your way?

Tax avoidance has become a sophisticated industry – supported by the accounting profession, where some who can afford it – rich individuals and companies do everything they can to avoid paying tax.

Successfully. Which then throws the onus back on the rest of us, and government cuts services to fill the gap. Tax avoidance throws everything out of balance. A disconnect between common sense and pure greed.

The current mess is the result of ineffective response by governments and central banks to the last mess – the GFC.

In the USA where the mess began, only two small players went to prison. In Iceland, one of the smallest countries in the world, 26 bankers went to jail.

Overall, the message sent to the banks in giant neon letters was “business as usual”. But the problem wasn’t fixed. It was just kicked down the road.

Setting up the perfect conditions for the next crisis. And when you add digital job destruction to a broken financial system, you have not just a perfect storm, but a perfect hurricane.

Because 50% of jobs will disappear over the next 20 years. And the banking system that should support business growth…doesn’t.

And in the developed world a job is about more than just money.

For most people a job is about identity and purpose, about finding a meaningful place in society, a place where effort is rewarded by a feeling of accomplishment as well as financial recompense.

So unemployment is a problem that undermines society, identity, self-respect, value, confidence and meaning. Unemployment acts like an illness, sapping strength and motivation.

For we tend to measure value by what we do, not by what we are. “What do you do for a living?” “Where do you work?” “What are your goals and ambitions?” “What have you achieved with your life so far?”

Now whether that is right or wrong, it is what most of us have come to believe…that our value and meaning in society is measured by what we do, how we earn a living, and the contribution we make.

All contributions are ultimately of our life, our time, our energy, our attention, our thoughts, our words and our deeds. We exchange our life for reward of some kind – money, fulfilment, recognition and other symbols of achievement.

That is why work is important. And why lack of work is a problem.

According to the Roy Morgan poll, during August unemployment in Australia was at 10.4%, nearly double the current ABS figure for July 2016. Which means 1.332 million Australians are currently unemployed. That’s a lot.

But even worse, in August, 2.249 million Australians were either unemployed or under-employed – 17.5% of the workforce. Depending on where you live, regional youth unemployment is 20-40%. In some communities second and third generations are unemployed. And the federal government continues to play with statistics whilst doing little to address the underlying problems.

We are creating a major social divide. A city and country divide. A state and territory divide. And a digital divide.

There are not enough jobs, and there is a continuing shift from full time work to contract work, part time work and unemployment.

The result?

Less income. Less spending. Leading to lower personal and business confidence and optimism. And more household debt.

86% of the jobs created in Australia are now part time. Which means even less security. Less money. Smaller dreams. More frustration. More uncertainty.

In this environment weak consumer spending is hardly a surprise. And Reserve Bank and budget predictions that households would be the mainstay of economic growth are shown to be the nonsense they obviously were from the beginning.

You can’t get money out of somebody’s pocket if it is not going in.

70% of the households in 25 advanced economies saw their earnings drop in the past decade. Households can’t and won’t spend if they have less money. And most know that spending in uncertain times will only take them further into debt. Increasing, fear, uncertainty and doubt. Increasing dissatisfaction with politicians, banks and economists – our so-called leaders.

It all joins up.

It is even argued by minsters, trying to justify the shift from full to part time work, that part time and contract work is a good thing, giving workers more flexibility and choice. Part time work may suit some people. But not most.

It is no longer enough to study and expect to get a job at the end of it. Between 2008 and 2014, the proportion of new university graduates in full-time employment dropped from 56.4 per cent to 41.7 per cent. Yet despite the 20 per cent drop in university graduates finding full-time work, the number of commencing students jumped from just under 20,000 to over 27,000.

Each year, more students enter a narrow-minded, backward looking curriculum funnel, leading to an increasingly foggy destination of no jobs.

Job security as an ideal has evaporated. There is a remorseless shift towards everyone having an ABN. Becoming independent contractors. Part time or freelance. Unemployed.

How do you buy a house if the bank expects you to have a full time job or rich parents?

How do you plan a holiday, a family or a future?

And the big, shiny elephant in the room…

Technology is replacing jobs, not creating them.

The world of work will soon offer only two options – jobs that demand few skills, little thought and pay barely enough to survive, and jobs that demand key skills, creative and connected thought and pay more than enough to live comfortably.

Two roads to the future…

But no traffic control.

Leave this revolution to market forces and we will all live in a jungle. Manage this revolution with insight and we can productively benefit from the technologies and competitive forces involved. And cultivate new options and opportunities by adding value to a wide range of productive industries. We are not without resources in this country.

But we have to invest in infrastructure. Human and productive infrastructure.

And provide the option and opportunity for people to take a meaningful place in this new society without blame and shame. If we are collectively responsible for this new economic condition – and we are - then we are collectively responsible for providing a place for all.

And this is no time for ministers to point a finger and talk about bludgers.

For in reality, they are the bludgers – the ones who accept a significant wage but do nothing useful with it.

They are the group that led us into this “brave new world” with little or no thought given to consequences.

The unemployed are unemployed because government had no plan for the future. And that is not the fault of the unemployed.

The so-called plan for “jobs and growth” was no plan at all. It was just a slogan to put on election banners and provide a one-liner for political interviews. A slogan designed to ignore the implications of casualised labour. And misinterpret the impacts of the digital revolution.

Because there are no jobs and there is no growth. We currently live in a world of contraction not expansion and have to adjust accordingly. Look at the spread of close to zero and negative interest rates across the planet.

And as robotisation, computerisation and automation really takes hold – with 50% of jobs disappearing soon, this situation will become much worse.

In the USA after the GFC for every dollar of economic growth 92 cents went to the top 1%. Just one family in America, the Walton family owns more wealth than the bottom 40% of American families – which is 46,400,000 families.

The seven members of the “Walmart family” live in large fortified mansions patrolled by security guards and exist in permanent fear of kidnap and extortion.

We are creating two Australias. One Australia inhabited by the fully employed, and another Australia inhabited by the part time, freelance, occasionally employed and the unemployed.

One Australia with digital skills and flexibility and the other Australia permanently trapped on the wrong side of the digital divide.

Which will inevitably lead to a future Australia with elite suburbs surrounded by big walls, cameras and security guards and another Australia packed full of the frustrated underclass, nurturing resentment, suicide or revenge.

Do we really want to go there? We will never have enough police or prisons.

This is not another normal cyclic change we are facing. It’s a revolution. A tectonic shift in our society that governments are not thinking enough about.

Because most of those disappearing jobs are low skilled jobs – or admin jobs and it is easy to say that people will have to retrain or reskill or study again, but the reality is that the “new” jobs require new skills and attitudes.

But “they are only admin jobs” I hear constantly, but admin jobs provide the investment in thinking time for the managers and directors in all organisations. Strip them out, as we are doing and managers are overwhelmed with no time to plan and think. Which explains a lot about our current condition.

And there aren’t enough “new” jobs to replace the old jobs anyway.

There are now only 38 jobs for every 100 people looking for work.

Only 12% of jobseekers going through the “work for the dole program” have found full time work three months after the program. Program fail.

The traditional skills of “hand”, “eye” and “brain” - now all demand “brain”.

And even the “brain” jobs won’t deliver protection from digital disruption.

For automation is now poking its digital fingers into law firms, hospitals, schools, accountants, engineering, government, universities and mid tier administration in corporations. A large proportion of the current work ”force” will very soon become the permanently work ”enfeebled”.

Who will look after their interests? Not the unions, because these are not traditional workers. Not the business associations or chambers of commerce, because they are not businesses either.

The self-employed and occasionally employed are trapped in the ever widening, policy gap between government, unions and business organisations, with no organisation looking out for their future.

They are part of an ever-growing host of people swept to one side by the currents of digital change, and the shortsightedness of policy makers.

Half the working or non-working population, whichever way you want to look at it. Half the voting population.

Will ministers still find it so easy to blame the digitally demoralised then?

The equation is simple. If people don’t fit in meaningfully then there will be another revolution following hard on the heels of the digital revolution, with just as much impact but involving less whiz and more bang. Not what we want.

We can’t allow this gigantic transition to happen by accident, as it is at the moment, driven by remorseless digital change, plant closures, layoffs and redundancies, drifting towards the iceberg of “big trouble” with no captain awake on the bridge.

At this stage we can do something about that, if we consider it carefully.

The expectation of our school children and students, and their parents is still that they will be job seekers rather than job creators.

We have to turn that expectation around in schools and wake parents up to just how much the digital revolution has changed the world of work forever.

In the last 25 years, the number of secretarial jobs in Australia has dropped by half a million. The number of labourers has dropped by 400,000. The number of technicians and tradies has dropped by 250,000. And the number of machinery operators has dropped by 100,000.

“My son the lawyer, my daughter the doctor, my granddaughter the professor, my grandson the bank manager”…dream on.

We are now seeing jobs disappearing in professional services, academia, corporations, councils and the not-for-profit sector.

The digital revolution takes no prisoners. There are no more jobs for life.

But we can do something about this. We can use the leverage of digital collaboration tools and platforms to transform the working society we live in, creating real jobs with meaning and high value.

One. We have to support startups.

We have begun, but we have to create lots more high value, productive businesses that can afford to employ.

Not just in ICT. But across a diversified set of productive industries - adding value to agriculture, manufacturing, creative industries, education, tourism, design based professional services, clean, green, medical and smart technology businesses and smart trades which will generate exports and high wages that can then pay for the services the government seems so intent on promoting.

We must add value through a strategic program of design, branding, marketing and advertising. Not just ship dirt, wheat and meat out the door. Become price setters not price takers.

Two. We have to identify and support the scaleups – the over 5 year old, high growth businesses that generate 50% of the new jobs. We must add value to them also through a strategic program of design, branding, marketing and advertising.

The growing, emerging Asian middle class represents increased opportunity for us in Australia. Because it generates a greater demand for protein, clean food, green food, education and prestige goods. Which is why we have to create things, grow things, design things, make things, brand things and market goods and services to the world. Export.

Three. STEAM not STEM.

Art + Science = Higher Value. STEAM can generate unique solutions to problems that robots can’t match or make. Collaboration between design and creative skills, and engineering and science is where both tangible and intangible value can be optimised to create high value businesses.

Introduce more designers and creatives to engineers. Foster cross silo discussion. Orchestrate serendipity. Bring advertising agencies into the policy arena. Pay them. Apply the “strategy + creative” system advertising agencies have used successfully for a hundred years to solve policy problems.

We have to encourage and train our schoolchildren and university students to be curious and creative. To take initiative, problem solve, stimulate an appetite for entrepreneurship – “I will start my own business”.  In the US, 20% of students in entrepreneurship programs went on to start their own business – 5 times the general population.

Set them the biggest problems. “How do we stop wars?” “How do we end hunger?” “How do we clean up the oceans?” How do we eliminate poverty?”

Full STEAM ahead.

And if we can produce students with curiosity and imagination, creative team solving ability, collaboration skills, analytic and critical thinking, initiative and entrepreneurialism and get them creating things, growing things, designing things, making things, branding things and marketing things to the world, then we will be fine.

Four. We have to create meaningful options for those who will never work traditionally again. It is time to consider universal basic income seriously.

Pay everybody enough to live on and abolish the bureaucracy of the welfare state and the cost of administering it. Not a new idea. Richard Nixon, Milton Friedman and Martin Luther King all suggested it in the past.

Real-world experiments in Canada and the US in the late 1960s, along with studies in India and Brazil, found little evidence of widespread work discouragement from a minimum income. If anything, these studies found positive impacts. Participants in the Canadian study went to hospital less frequently and were more likely to finish high school.

A minimum income paid to citizens in India actually helped them to secure work, by providing stability and access to childcare and transport.

After the Great Depression, Rossevelt responded with a “new deal” reforming banking, creating emergency relief programs, work relief and agricultural programs putting people to work on construction projects, forestry and building roads, bridges and dams. We can do the same.

But we can’t treat the people who will never work traditionally again as bludgers. The digital revolution is not their fault.

So we have to create real world, community-building projects, comprised of useful and meaningful activities and options in our societies not condemn people to a meaningless life of dog walking, grass cutting and gardening.

We have to be equally creative in solving the “never work again” problem as creating new work and jobs.

And we can’t afford to wait for the next depression, GFC or burst bubble. We need to act now, with startups, scaleups, entrepreneurship and social work options.

It’s October already. Let’s get the show on the road.

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Friday, 21 September 2018