It seems obvious that we should be focussing our limited national resources and economic energy into supporting and enhancing our productive industries – the industries that can support jobs, pay higher wages, generate more exports, build a sustainable future and so on.
We are a rich country. But we need to manage that wealth of resources better than we do today. We have extractive industries aplenty and a good job too…or we would be much worse off than we are.
Our productive industries – agriculture, creative industries, defence, ICT, manufacturing, medical and health, METS, smart trades and tourism can all be expanded, and value added to collectively create a sustainable platform for the future.
We also have service industries though some of them do a very poor job servicing and supporting our productive industries eg – the banks that should be providing investment to SMEs don’t, and are about to spend a heap of money telling us otherwise. Money they should be channelling into supporting productive industries.
And we have a small number of parasitic industries that extract wealth from wallets and purses rather than generate wealth and health for the country. You can work out who they are for yourselves.
In fact, Australians lose more than $11.4 billion a year on the pokies, so if we nationalised the pokies, we could clear our budget deficit in just three years.
Every industry across the planet is being impacted by the digital revolution. Automation, computerisation and robotisation are stripping jobs out of the economy at an ever-increasing pace.
Predictions are that 40% of jobs will disappear from the economy over the next ten years, though there are already signs that it could be a much higher percentage than that.
People with high-level insight into the tech sector, like Bill Gates, Elon Musk and Stephen Hawking have all commented regarding the speed of this change, and its likely impact on the society we live in.
Most people see what is happening in their own back yard, but don’t look over the fence. Digital disruption is widespread, worldwide and now includes every industry sector. Nobody has escaped.
Even the protected spaces of government employment are being impacted by digital disruption, though many governments are choosing to maintain business as usual, rather than add more fuel to the ever increasing number of people unemployed or underemployed.
Household debt figures are higher than they have ever been. So there is very little protective buffer for when interest rates rise again.
The true unemployment figures are groomed to hide the truth. Visit Roy Morgan Research for a simple explanation of why the employment figures are consistently misleading.
Unemployment figures can be fiddled and fudged. Underemployment, part time employment, contract employment, freelance employment, occasional employment and non-participation are where the problematic figures continue to climb.
The percentages just keep going up, month after month, year after year. Which inevitably leads to the resulting drop in household income, increased household debt and a generally frugal approach to shopping.
It all joins up. And this trend is only moving in one direction. Because digital technology is destroying jobs.
It is also creating jobs of course, but far fewer than it is destroying.
The jobs that are being created generally require new high-level skills, higher education and versatility. Not for everyone.
And if you have spent a working life in academia, corporate or government and find yourself prematurely out of work (40+) in this new environment, where do you go, what do you do, who do you turn to? Centrelink? Linkedin? Family? Friends?
This is the place more people are finding themselves, alone and confused, with no training, experience or connections to manage this new condition. It wasn’t like this when they entered the workforce. Who would have imagined things would change so much in such a short time?
And a mixture of digital disruption and ageism is hitting people of both sexes over the age of 45. Ageism is rife, not just in our country but across most of the world. And nobody is doing anything about it. Age Discrimination Commissioner. Another commissioner with no teeth is no solution.
Many of the jobs that are being eliminated are the historic entry-level jobs for the less skilled, and less well educated members of our society. The jobs that used to provide entry-level training and an opportunity to understand “hands on” what a real job entails.
So there are problems at both ends of employment years – for young and for old.
And in the middle, even the traditionally safe territory of professional services is being hit as well. There are no jobs for life, no matter how well trained you might be.
Politicians are being knocked down like skittles as people wake up to the fact that it doesn’t really matter who seems to be running the country, they actually aren’t running anything at all. The multinationals are.
The change is enormous. We witness it. We talk about it. We hear about it. And we complain to no avail.
People continue to join the “dole queue” or whatever name you want to give to the place an individual has to go to deal with unemployment.
The support agencies don’t. Centrelink doesn’t. Displacement leads to confusion and despair.
We need to restabilise the ship of state. Money has to be spent on one side or the other – either supporting the unemployed or supporting productive industries that can then employ.
One endeavour is demeaning, non-productive and destructive. The other is constructive, empowering and supportive.
We need to start actively building a new economy based on our productive industry sectors.
It is good to support startups. But 60-70% will fail. Far better to support scale ups, those businesses that have stabilised and now have the capacity to grow and employ. 50% of new jobs come from scaleups. These are the businesses that should be helped with investment, grants, value adding, R&D and export encouragement.
These are the businesses that can be helped simply through better networks, connections, collaboration, information and advice, and enhanced channels to market. These are the businesses that will help us diversify and build a strong foundation for the future.
And we know who they are. Which is a real opportunity.
They are stable, over 5 years old and most have the capacity to grow and employ.
So is it better to invest in startups or scaleups?
It is better to do both. But currently more effort is applied to startups not scaleups, which seems misguided.
A quote from The Scale-Up Report on UK Economic Growth illustrates this point clearly, “Competitive advantage doesn’t go to the nations that focus on creating companies (startups), it goes to the nations that focus on scaling companies”.
There is evidence that shows scaleup companies help create high-quality jobs, which are exactly the jobs we need to support if we want a sustainable and “fair-go” country to live in.
There are five key challenges that scaleups face – recruiting people with the right skills and ambition, developing business leaders, selling to large companies and government and entering new markets, attracting capital, and accessing R&D.
Two of these are particularly problematic – capital and R&D. Banks won’t lend and universities are still only paying lip service to industry engagement at this time. We can do better on both fronts.
And also, we are pouring energy and money into startup support, only to see the startups with the most potential being wooed and encouraged to move offshore. Australian “innovation and ideas” is a nursery for the US, UK and the world.
We need to nurture our innovation and ideas here.
And that is best done by nurturing the collaborative ecosystems which scaleups depend on – the conversations, the networks, the ideas and examples of what works, what doesn’t and why.
We know what the productive industry sectors are – agriculture, creative industries, defence, ICT, manufacturing, medical and health, METS, smart trades and tourism.
We can identify scaleups. There are over 5,000 in the RED Toolbox for a start – https://theredtoolbox.org/index.php/home
Now it is time to bring more productive industries and businesses into active, collaborative conversations. So if you are a business in one of the productive industry sectors, then become a RED Toolbox partner. Visit the About page and become a partner. Set up your own group for customers and suppliers and your ecosystem. Join all the groups that can help your business.
If you are a council or an RDA, then become a RED Toolbox partner. Create groups for your region. Share ideas with other regions like yours. Collaborate with other councils and regions in your state. Discuss energy, jobs, projects, water, sport, agribusiness and tourism. Learn from others.
If you are a not-for-profit or an association, then become a RED Toolbox partner and engage with other associations or organisations with common issues.
None of us can succeed on our own, no matter how big we may be.
Collectively, we can create a fertile environment for profit and jobs.
And collaboratively we can address all the wicked problems and issues, and turn them into opportunities and actions. Right now, in collaboration with partners we are looking at health, aged care, mining, agriculture, blockchain, export, tourism and jobs. Join the conversations and the projects.
2018 is here.
A new year and a new opportunity. So let’s do it.