Month: February 2018

“Jobs lost, jobs gained? Don’t’ worry, it’s ok”. Well, it’s not ok.

On reading the McKinsey “Jobs lost, jobs gained” report again, it is easy to see how traditional economists just don’t understand what is happening re the jobs impacts of digital disruption.

Throughout the report, the McKinsey team continually reach back into history for reasons why the current changes will be just like before.

Which is “Maginot line” thinking.

Because, new technology nearly always changes the apparent learnings from history.

Before the second world war, Guderian and a few others understood that the tank and the “jerry can” (the ability to refuel reliably on the run) would change everything supposedly learned from the fixed line, trench warfare, catastrophe of the first world war.

His thinking was not accepted by his superiors, so he went ahead and proved them wrong anyway. And the Maginot line – the result of all the French General staff learnings from the first world war proved irrelevant. Wrong place. The battle was fought elsewhere.

It was the same with the machine gun before the first world war. Cavalry and infantry proved useless against knee height scythes of bullets. The new automated technology created radical change in the operational environment = the battlefield, and everything supposedly learned from history proved irrelevant. New conditions.

And here we are today, with the “old school” not understanding what the “new school” understands only too well. The economists versus the technologists.

Economists just don’t understand that robots REPLACE, that software REPLACES, that automation REPLACES not displaces.

Economists yearn for the familiar. It is unfortunate that we live in an age of disruption that is not just hard to understand, but hard to see in its impacts and effects. “1”s and “0”s delivering change across wires and wireless, operating like termites in a traditional Australian weatherboard house.

Nothing seems to be happening, until the house falls down.

Technologists deal with digital disruption every day. Economists just use the results of their actions – smart phones, tablets and PCs.

Wages growth?

Almost 20% unemployment and underemployment!

Household debt!

Productivity?

They all join up, but they are being misinterpreted by folk who do not understand what is fundamentally causing the change. Even the Reserve Bank governor and his board are mystified as to why the economy isn’t following the rules.

The continual impacts of robotisation, software and automation push down wages, push up underemployment and unemployment, increase household debt and increase productivity.

But we are still measuring the wrong things. Using out dated methodologies, broken philosophical arguments (economics) and looking to the past for clues about both the present and the future.

We don’t seem to have a clue about what is happening right now, let alone what is coming down the highway towards us.

“Ten thousand, high-speed, solar powered, steamrollers” in the form of VR, AR, AI, robots, IoT, blockchain, drones, satellites, BIM, cyborgs, 3D printing, nanotechnology, BI and all the associated changes they bring with them.

Kids, parents and teachers…are you ready to deal with this?

I don’ t think so.

You have been taught the wrong things for a time that now only exists in memory.

This is a new world. And we live in a different time with a different set of rules that are still being defined.

The changes caused by digital disruption across all industry sectors and all business categories are as radical as the “black death” of medieval times. The “black death” very quickly created a condition of scarcity in workforce.

It didn’t just kill millions of people it caused enormous changes in social conditions, disrupting the feudal system irreversibly.

The digital revolution is very quickly creating a condition of abundance in workforce. It is unlikely to kill millions of people, but it will cause enormous changes in social conditions, disrupting the economic system irreversibly.

Because abundance is a bad thing if we can’t manage it productively.

Which at the moment, we can’t. What do we do with a third of the working population when they are unable to find employment?

And not just here. That abundance of the unemployed and underemployed is happening across the planet, caused by the impact of the same technologies.

We are witnessing a time that is very different from the shifting of the workforce from land to factory (industrial revolution), or from factories to services = displacement.

We are now witnessing replacement, and as a society we are being challenged by what we are going to do with the new abundance – too many people, and not enough work.

The future of work and jobs is a big issue.

And we are not ready for it.

First we have to understand why it is happening. The technologists understand this. The economists don’t.

But who do the politicians listen to? The wrong group.

We live in a strange time when governments don’t listen to scientists and technologists as openly or as often as they should.

Second, we have to map the impacts of these technological change agents (high speed, solar powered, steam rollers – VR, AR, AI, robots, IoT, blockchain, drones, satellites, BIM, cyborgs, 3D printing, nanotechnology, BI etc) against the current operational environment.

Workers are being impacted by digital disruption every day.

And so are the businesses and not-for-profits they work in.

Students are being taught subjects fit for the 20th century, not the 21st century. And they are not being given informed advice about the current and near future status of work and jobs.

And people are concerned. Students, parents, teachers and grandparents as well.

I post on the future of work and jobs regularly. These posts get four times more likes, comments and shares than any other subject, with comments from countries across the planet saying, “It’s the same here”, which you would expect, because the causes are the same.

It’s the same robots, the same software and the same technology creating the same impacts.

In some countries the government response is considered and informed. But overall, the threat is universal as is the new opportunity. Because there are many opportunities on offer, but only if the environmental change is managed intelligently.

We have a choice. Between a jungle and a farm. Unmanaged or managed. Same market forces (seeds, earth, water, air, sunlight, competition) – but one is managed the other isn’t.

We don’t leave agriculture to nature. We manage it to our advantage.

It is time to do the same thing with our societies. In the past we didn’t have the tools. Today, we do. Blockchain is a good example.

It is now time for our politicians and CEOs and boards to wake up to exactly what tools they now have at their disposal and use them productively.

It is time for the politicians and CEOs and boards to listen to the technologists not the economists.

I called somebody in the Queensland Department of Education yesterday to discuss how we might be able to help, by using our 50,000 survey results to highlight exactly where each new technology would impact on each industry sector and every one of the 500 individual business categories in Australia.

Knowing this would help students, teachers and parents make wiser decisions about their future. And make wiser decisions about which subjects to study and which subjects might lead to work and a job.

Or which subjects might best lead to the opportunity to start a business. Or collaborate with other students to do something under their own steam.

Because a “safe” decision to become a lawyer, knowing that every contract of every kind in the world would soon become an automated “smart contract” on blockchain and replace the bread and butter work for every law firm, might be influenced accordingly – ie “not so safe”.

That’s just one example.

And there are many others for each of the 500 business categories and their associated jobs. And knowing how technology is changing the environment is useful information.

Was the advisor in the Department of Education interested? No. She was too busy.

Being too busy isn’t unique to people in the Department of Education. These days everybody is far too busy. But far too busy with what?

It seems that everybody is so busy with next quarter’s bottom line, or their KPIs, or impending role review that nobody has time to consider the future. Even CEOs and boards, for whom this should be “job one”.

Because, no clear view of the future = no business, no CEO, no board and no future.

There are some very big companies in Australia in this condition right now.

So I wasn’t too surprised about the response from the Department of Education.

It’s a big department and all the people have more important things to do working on education for the 20th century, than to wonder what education for the 21st century might look like.

So to add to the RED Toolbox – https://theredtoolbox.org – we have started building the “ED Toolbox for schools, and teachers and parents”. Regardless of the Queensland Department of Education.

“Too busy right now”, is just another example of Maginot line thinking.

It’s understandable. Most people don’t like change. Most people don’t like revolutions. But revolutions do come along occasionally and then it’s “bend or break”.

To avoid too many breakages, we need to share information and insight as widely as possible, so people can consider their destinies wisely.

And we need to plan for the future, based on what we now know. Which means making time to think and consider, not being too busy.

For that will ultimately lead to new school and university curricula based on that knowledge.

To match real demand and supply.

To stimulate imagination and dreaming.

To encourage entrepreneurship in schools and universities.

20% of students in entrepreneurship programs will later start their own business = 5 times the general population.

Lots of people are talking about innovation.

We are even starting to do something about innovation.

But we need to do more.

For we will need lots of natural innovators, discovers and explorers, which is where all children start out.

Until the system squeezes it out of them.

We need to introduce lots more school based, innovation programs with prizes for real world innovation. They do exist, but we need lots more of them in all schools.

Encourage students to visit low-income regions to learn about social entrepreneurship.

Encourage them to engage with the “wicked problems” food, climate change, extinction, war, disease, pollution and inequality. Set them the biggest challenges, not the smallest.

Because disruptive change is happening and it is happening faster than most realise. And the impacts of change are being camouflaged.

Is unemployment 5.5% or 9.1%? Does underemployment (10.2%) hide the real impact of digital disruption on jobs? Yes, of course it does.

Is the current level of household debt a litmus test? Yes, of course it is.

If 47% of jobs are due to disappear because of robotisation, computerisation and automation, then what?

It is not enough to just ask that question, we have to do something about it. “She’ll be right, mate” isn’t an appropriate response this time around. This is not displacement this is REPLACEMENT.

Which one or more of these technologies – AI, robotisation, IoT, VR, AR, blockchain, biometrics, mobile apps, remote sensing, 3D printing, cyber-security, drones, nanotechnology, big data, cloud services, BIM, cryptocurrency, identity management, facial recognition, social media, Amazon, eBay, Alibaba, Uber and the rest – is going to sweep you away?

It shouldn’t be guesswork. You should know.

And which one of these technologies can you surf to success?

Threat comes with opportunity, as always.

So students, parent and teachers need to understand what is happening. Understand why.

Understand what is needed to adapt. Understand what options exist already, what skills might be needed and where to get them.

For this time around, not everybody will easily find a chair in this remorseless new game of musical chairs.

The unskilled, the wrongly skilled, the unabled, the disadvantaged, the excluded and the people already living on the streets.

There will be a lot more people living on the streets and in cars. And we don’t want that.

For not everyone is fitted to play the new technology game successfully.

Not everyone can be trained to play the technology game.

What do we do about the third of the workforce who don’t fit into our current jobs and work environment?

They will be angry. They will be depressed. They will be upset.

Big question.

And that is the subject for another post.

In a digital world, what’s more important…convenience or control of destiny?

Our digital world delivers convenience aplenty. Email. Websites. 4G. 5G. Alexis. Siri. Cortana. Ask Google, Order from Amazon. Check friends on Facebook. Make contacts on Linkedin. Instant access everywhere.

It’s convenient.

But it’s a two-way street. You get the convenience. They get your data. And nearly all the “theys” are big.

Is that such a bad thing? After all, nothing is for free. There is always a trade off. Whether that suits or not, is for you to decide.

Organisations knowing lots about you can be a good thing. It can help them to help you. Companies all over the world are gathering data about you every day. In many cases, it’s to help them better understand your interests so they can offer products and services designed to help you.

But in many cases they are gathering data to help others as well. And those others might not have your interests at the top of their list. They will have their own interests. And their interests and your interests may not align.

Insurance companies, banks, debt collectors, telecommunications companies, scammers, credit card companies, IT companies.

And you won’t even know. Until an application you make is knocked back.

There is a good and a bad side to the new digital world. It is still early days and still time to consider convenience versus control of destiny.

The internet was created as a distributed network of communication nodes, so that if any one of them was destroyed in a war, communications could still be routed through the network.

It was created as a distributed network. Deliberately so.

Increasingly today, online services are being centralised and aggregated, with data being gathered in one place, for one big corporate or multinational. Deliberately so.

We appreciate the convenience. But do we really understand the increasing shift in control? For control of destiny affects us at many levels. Both today in our businesses and regions, and increasingly on into the future. Affecting us, our kids and grandkids.

Affecting control of destiny for a person.

Control of destiny for a company or an organisation.

Control of destiny for a country.

And control of destiny for the regions we live in.

To control our own destiny we need to be able to navigate and steer. We need to be able to see. We need to choose the direction we want to go in. And we need indicators of direction and speed.

Without measurement and decision tools we are helpless.

We all rely to a greater or lesser extent on government and non-government agencies, which measure things. In Australia we have the ABS, which produces research reports on many things. One thing the ABS measures is employment.

The figures that the ABS produces are used to justify all sorts of things – political commentary, insight and wisdom or otherwise, whether now is the right time to raise interest rates or otherwise, whether the policy decisions of a variety of government departments are working or otherwise, and so on.

Most of the time, people just accept these figures without question and get on with life. But there is a good reason to have a closer look at how these estimates are created and whether they are valid, misleading, helpful, hopeful or otherwise.

There is good reason to suspect otherwise. Roy Morgan spells out why this may be so, and it is worth reading what is said. Because there is a big difference between the unemployment estimates claimed by government and the unemployment and underemployment estimates from Roy Morgan.

http://www.roymorgan.com/findings/7433-roy-morgan-australian-unemployment-estimates-december-2017-201801110708

http://www.roymorgan.com/findings/7132-real-unemployment-geoffrey-blainey-january-2017-201701301800

Based on experience, I trust the Roy Morgan estimates. You can make your own decision.

Is it 5.5% unemployment or is it 9.8% unemployment? Is the current total of unemployment and underemployed close to 20% or not?

Because 20% is a problem, and in a digital revolution “it all joins up”.

An article in the Australian by Martin North at the weekend, suggests that mortgage rates in Australia are on the way up, because Australian banks raise 30% of capital from overseas. And those rates are on the way up and we will follow.

We also have a high level of household debt, with one million households experiencing cash flow issues and in mortgage stress (even though interest rates are at rock bottom). So what happens when rates go up, as they will this year?

Property prices are set to fall by between 10% and 20% this year. So it doesn’t take a great brain to work out what waits ahead for a million households later this year. And why the real employment figures are important.

Because steadily increasing unemployment and underemployment leads to less income, more debt, more financial stress, and then a fall and possibly a crash, as unemployment and underemployment continues to put ever more strain on households.

Employment, underemployment, wages, interest rates, mortgage options and household debt are effectively a house of playing cards, all connected and reliant on each other. Are playing cards in control of their destiny?

Add continuing digital disruption to that picture and the house of cards doesn’t look very stable at all. And this is equally true in the US, the UK and elsewhere.

We benefit greatly from agencies that manage weights and measures, facts and figures. Rather than stripping money out of the ABS, as governments have continually done, money should be pouring into the ABS so that we have a trusted source of information to rely on, providing signposts that give direction with reliable indicators attached – estimates, percentages and reports.

In the absence of reliable data, we are driving into the fog.

Control of destiny? For our country, I think not.

By default, the blind lead the blind. Financial advisors don’t have a clue. We are constantly advised to speak to a financial advisor, but who is advising us to do this and do financial advisors know what they are talking about anyway? Do they do their own research or rely on the same figures politicians use?

They use the figures the politicians use.

We already know that most “so called” financial advisors are little more that spruikers for banks – 80% of them. And a royal commission is about to look into that, because so much advice was biased and misleading.

What is the real state of the housing market? Real estate agents won’t tell you. The two major newspaper chains won’t tell you, because they both have a vested interest in “good news” stories on the property market, with one newspaper owning Real Estate.com and the other newspaper owning Domain.com. Why are we not surprised to see so many positive stories on how this is a great time for property investment (always), and so few on stories warning of the impending fall (crash).

Well you can work that one out for yourself.

Now, why am I harping on about something so obvious as vested interest?

Because in a time of considerable disruption, we need insight, research and business intelligence like never before.

And who is gathering the data that can generate those insights? The wrong people and organisations. Woolworths, Coles, American Express, Amazon, Linkedin, Facebook, Google, Apple, Banks, Insurance companies and the rest.

Siphoning up data and information on everything that moves. To sell us things. And avoid selling us other things.

Measurement is an important part of the society we live in. It is inextricably joined to control of destiny. No measurement = no control of destiny.

The kilometre is a unit of length equal to one thousand metres. On the 8th of May 1790, the Constituent assembly ordered the French Academy of Sciences to develop a new measurement system. Why? To create a standard that could be universal, common, trusted and uniform.

This may seem obvious to us today, but standards enable trade. Standards enable trust. Standards enable measurement and prediction. Which is why it would be really useful to have commonly accepted, reliable facts and figures regarding employment and underemployment in Australia.

It would help us to plan and create policy. It would help us to make decisions.

5% unemployed = one decision. Close to 20% unemployed or underemployed = another decision.

40% of jobs predicted to disappear over the next 20 years. The results of our 50,000 surveys suggest that percentage may be a little low, with digital disruption seriously disrupting the businesses and organisations and even sectors that provide the jobs in the first place.

Which will seriously disrupt the expectations of children and parents in a school system still teaching for the disappearing world.

Current data and information is useful.

It can help in control of destiny. Of course, we can’t control everything. We may not even be able to control very much. But to control what we can control, we need to be in control of the data and information that pertains to us.

Now, much of the data gathered every time you use a smart card, a loyalty program, a website, a credit card, a social media site, a mobile phone is gathered by the company concerned based on a contract, that you accepted, either having read it in full, or most likely not having read it at all, but accepted anyway.

In most of those agreements, you agree that your data can be used to help you in some way, but also that your data can and will be shared with other companies and organisations for commercial purposes.

In many cases the company concerned will state that your data is now their data, because “your” data had been reconfigured, rearranged of reconstituted in some way to become ‘their” data.

The company may also state that your data has been de-identified before sharing with others, and that only the aggregated data is being used.

There is a huge industry worldwide that has evolved around the re-identification of data, using public, private, purchased and in some cases stolen databases to compile complete or near complete profiles of individuals and their “private” details.

The spooks do this and we kind of expect that. That’s just the price we pay for living in the 21st century. But most if not all large multinationals and corporates also do this every day.

Is this free trade? Is this shared value? Are you giving your informed permission on how you want your data to be used and under what conditions? Probably not.

Nothing is free. Every time you access a free service, you pay with your data. Even when you access and use a service you pay for, you pay extra with your data.

So if you are a small company or organisation, how do you manage control of destiny in this new environment? What is to stop Australia, its businesses, regions and individuals losing control of destiny completely?

We know that our data is being used by multinationals and corporates for their benefit. How do we ensure that both individual and collective data can only be used for individual and collective benefit – for shared value and for the common good?

This territory is now starting to be explored, but we are light years behind the spooks, and years behind the multinationals and corporates.

So we need to start catching up.

For individuals, awareness is a good place to start. Think about what you do, about what you take for granted. Are you making informed choices about how your data is used?

Data can be used for good and for bad. It can be used for our benefit and convenience or for our detriment and exclusion. Data is political. Data is geopolitical. Who, in which countries is gathering your data and aggregating it?

Do you trust American companies more than Chinese companies? Amazon more than Alibaba? And why? Think about it. Data is geopolitical.

Blockchain is an interesting technology in this regard. Incorruptible, secure, encrypted, distributed with an ability to embed smart contracts to manage identity, rights, markets, IP, privacy and permissions. Blockchain provides a mechanism for managing shared value and the common good in a region or a sector, just at a time when it is evident that we need it.

Collaboration and sharing is important, but the interests of individuals and organisations should be defined and protected collectively, so that collaboration can lead towards control of destiny for regions, sectors and the organisations and individuals that live and work in them.

Which is what led us to start working on projects involving blockchain in the RED Toolbox. It is a natural progression in managing shared interest on a collaboration platform.

The RED Toolbox focuses on collaboration across productive industries. It focuses on helping to build capability in sectors and regions. It focuses on the future of work and jobs. It is both a “think tank” and a “do tank”.

And part of the “thinking” and the “doing” is the exploration of how blockchain can help regions (councils and RDAs) take control of their destiny, when they are expected to do so many new things with smaller budgets, while still managing “roads, rates, and rubbish” effectively.

We have just started working on a project to explore blockchain use in councils for the benefit of citizens in their region.

Sign up to the RED Toolbox – https://theredtoolbox.org – and join the Blockchain Projects for Councils group.

Read the post – How Blockchain can help councils – and let’s discuss.

https://theredtoolbox.org/index.php/insights-blog/how-blockchain-can-help-councils

And control of destiny is just as important for industry sectors. New challenges from technology, and new opportunities from technology are both destroying jobs. So over the next two months we are meeting with government departments, industry associations and corporates to explore how blockchain can help industry sectors evolve and at the same time protect the interests of everyone in the sector.

It is time to evaluate carefully the benefits of all “cloud” services including social media, and the pluses and minuses of use. Who owns the data created every time you use a service? Is the data being aggregated and shared for the greater benefit of you, your business, your council, your region and your country?

With Facebook, Linkedin, Woolworths or Coles. With Microsoft, Apple and your bank, credit card or insurance company…who is serving who? Is it really a shared value relationship or is it mostly one way?

Do the sources of information you use every day, have your best interests at heart?

It’s an interesting question. If you (and lots of others like you) generate the content, then who should share the rewards?

Social media platforms depend on content for visitors. For customers, business contacts, family and friends. You get the “likes”. The platform gets the advertising dollars.

The newspapers and media companies know what is going on only too well. After all they used to play the same game. Provide content (news), attract the “eyeballs” and sell advertising as a result. But the game and the rewards have shifted.

Newspapers and media companies still provide news, but a lot of it gets shared on social media platforms for free. So the newspapers provide the content and then get no reward for their efforts. The social platforms get the dollars.

So some newspapers respond by going more “tabloid”, sensational and “inventive” and still lose more customers every day. Real news replaced with fake and embroidered news.

And even more bizarre, the real news is then labeled as fake news by a president, and fake news is promoted as real in social media. Even George Orwell couldn’t have imagined how it would all turn out beyond 1984. Propaganda and misinformation on steroids.

In a world deluged with electronic information, who knows what is real or fake any more?

Interesting times.

Who controls your destiny? The moon and the stars? The seers and prophets? The politicians and the multinationals? The social media platforms? Or just serendipity?

In our life we have no choices at the fundamental level. From birth, we head in one direction only – towards death and we do it one breath at a time. What we do on the way is where we seem to have some element of control through decisions that we make or don’t make, though there are many points of view on that subject.

But if control of destiny is an option, then it is all about the decisions we make.

And the decisions we make require data, information, insights and conclusions. For us to make plans, make informed decisions and take the right actions.

In your life, in your business, on your farm, in your factory, in your organisation, in your region, who controls the data and information that informs you?

Are you actively involved in deciding how your personal data is used, and how its value is shared? Is your industry association actively involved in managing and protecting the aggregated data generated through industry software platforms for the good of members, regions and the sector as a whole?

For control of destiny.

Is your local council deciding how regional data across all industry sectors in the region should be used for the economic benefit of the region for today and tomorrow? For the common good? For the region’s good?

In a joined up world, considerations and decisions don’t stop at the front door of an organisation. The multinationals and corporates know that. It’s now time for smaller organisations, councils, RDAs, associations and regions to act as well.

Convenience or control of destiny? It’s your call.


CONTACT

For more information contact Digital Business insights!
info@db-insights.com

 

DIGITAL BUSINESS INSIGHTS! PTY LTD

A.B.N.    57 009 990 130
P.O. Box 127
Kenmore  Q 4069