The good and bad sides of the digital revolution

The digital revolution continues to challenge the societies we live in. For better or worse. Connecting us to information and each other, fostering community and collaboration, but at the same time destroying jobs, and capturing personal data for manipulation, propaganda and control.

You want to win an election? Shift attention like a matador? Feed the gullible? Well, now you can.

This is where we now live. In a polarised world. Both good and bad. Brokered by Email, SMS. Google. Facebook. Instagram. Twitter and the rest.

The digital revolution is reshaping the world at a scale never seen before and everyone is involved. Spooks. Politicians. Criminals. Gangsters. Corporates. Businesses. Individuals and organisations of all kinds.

Digital disruption is remorseless and destructive, and is predicted to eliminate 50% of jobs during the next twenty years.

Over twenty technologies and vendors of various kinds ranging through 5G, Blockchain, IoT, AI, Robots, Drones, VR, AR, BIM, GPS, satellites, Digital ID, 3D printing, nanotech, cloud services, Amazon, Google, Uber, Freelancer, Airbnb and so on are causing this affect, all knocking on the front door at the same time.

Some are knocking louder than others, some are knocking together and some want to come in right now.

New jobs are being created, but the combined effect of these technologies is net job destruction and replacement, not by other jobs, but by software in various forms. Human effort replaced by software.

The signs are there. The evidence is everywhere.

Politicians don’t understand it and they don’t like this disruption happening on their watch. Job loss and disruption is bad news for politicians.

So they deny it. Deliver platitudes. Talk about something else. Manipulate the facts. They fudge the figures = standard operating practice for politicians. They worry about their short term future = the next election, and do nothing useful about the longer term implications of what is steadily becoming inevitable.

Across the planet.

In Australia, unemployment and underemployment is 20% already in 2018, with ever more people moving to contracts, self employment, part time, freelance, occasional and Centrelink.

So what can we do about this?

The technologies are here. The genies won’t go back in the bottle and they all have big teeth.

We can’t stop them. But with careful consideration, we can get them working for us not against us, soften the impacts and manage the change.

For which, we need to do two things.

One, understand what is causing the disruption, which sectors and categories are threatened by which technologies, which sectors are safer than others, why it is happening, when it is happening, what new skills may help and what the upside is, if any.

Two, act accordingly.

Clarity offers options. Options offer control of destiny. We are then able to make wiser decisions.

And we need to recognise and understand the interconnected fact of digital technology. “1”s and “0’s”. Wires and wireless.

It all joins up. Social. Economic. Environmental. Political. Ethical. Personal.

Which creates a new range of interconnections, challenging silo thinking, “frogs in wells” and the “narrow thinking”, “my job” way we view the world we live in.

In a joined up, interconnected world – which we now inhabit – we need joined up, interconnected thinking that doesn’t stop at the door, the fence or even the border and you won’t find that in any government or corporate “department”, ministerial department or any of the small cupboards we live our lives within.

“It’s more than my jobs worth”. “It’s not our core business”. “It’s none of my business.” And so on.

Of course, not everyone is blind to new interconnected opportunities.

The data generated from connection is being harvested for good and for bad as well. Cambridge Analytics are only doing what the spooks have been doing for years. Along with Google, Facebook and any large organisation with lots of data.

Blockchain may be our protection against this misuse of personal data. We’ll see.

But the digital revolution continues and the disruption rolls on.

There are roughly 2.3 million organisations in Australia, employing over 12 million people.

About 2.4 million people are currently unemployed or underemployed looking for work or more work, with a lot more destined to join them because of digital disruption and job loss.

We usefully divide businesses and other organisations into 19 different industry sectors in Australia, though not all the 500 or so ANZSIC business categories fit comfortably into those divisions

And disruptive technology affects just about every one of the 2.3 million organisations and every individual in some way.

Technologies are tools. Each technology enhances or extends existing human capabilities in some way, our senses, our brain and our body.

It’s the same in our businesses and organisations. Technology automates processes and activities within an organisation to increase efficiency, productivity and effectiveness. We are now getting particularly good at this.

As mentioned, over twenty technologies and vendors of various kinds ranging through 5G, Blockchain, IoT, AI, Robots, Drones, VR, AR, BIM, GPS, satellites, Digital ID, 3D printing, cloud services, Amazon, Google, Uber, Freelancer, Airbnb and so on are now helping to enhance or replace humans in some way.

This can be in a practical process or activity (hand), design activity (eye) or a thinking activity (brain). If it can be automated it will be.

And processes and activities that are repetitive offer the best, short-term opportunity for automation and replacement.

We have all witnessed the impacts of robotisation on manufacturing. And mining. We are now beginning to see the impact of robotisation on other sectors, such as wholesale and agriculture with different results.

Over time, the wholesale industry will lose jobs. Agriculture will gain jobs.

Wholesale can be fully automated. Box shifting. For as long as humans are cheaper than robots the transition will be postponed. And an interim step will be making humans “act like robots” with wrist controllers managing activity in the warehouse, measuring efficiency, comparing workers and replacing workers not up to target with new workers.

Cyborgs. Who can and will be fully replaced by robots once the cost benefit merits the decision. Wholesale employs just over half a million people in Australia.

Each disruptive technology affects sectors and categories in different ways.

But it is in the service industries that process and activity automation in its latest incarnation (AI) will hit hardest and soonest. Jobs in rental and real estate, administrative services, finance and insurance, professional services and public administration are all under threat.

Which adds up to about 5 million people challenged by one technology.

As a principle, “Middle person” jobs can and will be replaced by Artificial Intelligence (AI). It’s just a matter of time. Any person who sits between you and a vendor without adding significant value will be replaced with technology.

Financial advice, mortgage advice and insurance advice from AI is already far more reliable, fair, balanced and trustworthy than advice from human advisors who look after their vested interests first, not yours.

The Royal Commission into banking and insurance is providing lots of examples of vested interest, manipulation and corruption. These advisors are ripe for replacement.

The same is true in rental and real estate. Replacement.

These “middle person” jobs will be replaced by AI, better able to manage the real interests of buyers and sellers, not the interests of the agent – the “middle person”, who is only interested in listings and quick sales = commission, no matter what they might say to your face.

But the real estate industry is cushioned for now. For in Australia, the interests of News Ltd and Fairfax, who own and Domain support an industry that is effectively a “dead man walking”.  For now.

None will give up their commercial advantage willingly. But they are fighting a rearguard action that will ultimately end in defeat.

As you can appreciate there is a lot to gain and a lot to lose in this disruptive transition.

Jobs will continue to steadily disappear. The speed at which they do will be a result of the struggle between the old world and the new. Between vested interest and innovation.

Over 2 million people are employed in the three levels of public administration in Australia, paid for by taxes.

They produce nothing. All politicians talk about the need to reduce “red tape” but they never do. A wide range of existing and new technologies could reduce the size of the public service tomorrow, but this is unlikely to happen.

For obvious reasons. Campbell Newman tried in Queensland and lost the next election. Political expediency protects the public service for now. Until the money runs out and treasury can no longer cover the payroll.

Because it all joins up, and a steadily decreasing workforce generates less tax.

So it is hardly the time to be giving tax breaks to big business in Australia. We need all the tax income we can get.

Some industry sectors include a mixture of safe and threatened business categories.

Administrative services and professional services have categories in both camps.

Where creativity, experience and insight are important to a business category and the category deals with a workflow of unique challenges eg engineering, veterinary, architecture, design and surveying – the category is safe.

Where processes can be automated easily eg legal services, accounting and taxation processing, clerical services and employment services, the category is under threat.

We estimate from our 50,000 surveys across all categories and sectors, that 9 of the 19 industry sectors are seriously challenged with another 2 partially challenged. And those 11 sectors are the major employing sectors, representing about 5-6 million jobs.

Now, not all those jobs will disappear. And those jobs are not all under threat tomorrow. But threat is on the way.

This is the scale of the issue that we face. It is a big deal.

Some sectors are better off than others.

Construction is one of those. We have a huge investment in brick, stone and wooden houses in Australia, all of which need renovation, fixing and improving from time to time. And construction employs a lot of people. Over a million.

Agriculture is another interesting sector in Australia, dominated by “mum and dad farmers” (93%). And technology continues to enhance the sector not threaten it.

The main threat to “mum and dad farmers” is not appreciating the value of the data they gather on their farms. Especially if added to the data from the farm next door, and all the farms in the valley and the region.

Farmers have to collaborate to capture, own and manage data for their individual and collective interests, and not allow it to be captured, aggregated and used by a farm management system, cloud provider for its interests.

Agricultural data will become increasingly valuable as we witness the impacts of climate change on the oceans, rivers, estuaries, farms, properties and regions across the country.

Working with their industry associations, farmers need to collectively own and manage this data for themselves, their children, grandchildren and the towns and regions they live in. Then farmers will be able to manage future threats to work and jobs, and leverage new opportunities sustainably.

The retail industry in Australia is challenged from outside, by Amazon and a growing range of other online retailers.

The only safe space in retail is in “fresh” fruit and vegetables, fish and meat, convenience = local or fast delivery, big things and specialisation. The battle between commodity retailers (anything in a box) and online retailers has only just begun.

We have mapped the impacts of over 20 technologies on 484 business categories and the results vary widely in timing, the degree of protection by vested interests and existing business relationships, and room to pivot, adapt and change.

These are the business categories that we are including in the ED Toolbox for students, teachers and parents, to help them make wiser decisions about the future. “What do I want to do when I leave school or university?”

Understanding the digitally disrupted world of work and jobs makes answering that question a lot easier.

That’s the passive picture. If we just let it happen to us. If we just react as things happen.

But what if we act positively and with vision? Now.

What if we have a plan?

What if we build a wider foundation of productive industries in Australia?

What if we increase value in these productive industries? How do we add value? How do we increase exports and profitability?

Because, we don’t have to just let the digital revolution happen TO us. We can use the digital tools to make it happen FOR us.

We are blessed with a wide range of productive industries in Australia that we have barely begun to work on – agriculture, arts and recreation, information media and communications, education and manufacturing as well as medical and health, mining services, waste management, defence, smart trades and some professional services.

Each of these sectors and categories represents an opportunity to add value, through better matching of R&D with production, through design, through branding and advertising.

We have become good at shipping “dirt, meat and wheat” out the door. Now we have to get good at adding value. Matching R&D with business. Branding. Exporting.

There are always opportunities to increase exports from Australia.

We have the “brain power”. And we have plenty of resources to add value to. Manufacturers, producers and services with world class capability.

We just need the focus and the willpower.

These R&D and creative industry jobs = STEAM are what we need to invest in as a nation to create a more resilient, better paid and sustainable environment for us, our kids and grandkids to work in.

Not push them towards the lower paid, no future, replaceable jobs in retail, personal services and health and social assistance services.

Or mislead them into industry sectors and categories that are about to change forever because of digital disruption.

We have to invest in productive industries, building a range of new branded, products and services for the world.

Connect Australian businesses with others in other countries to grow trade.

The India-Australia groups for energy, water, environment, manufacturing, smart cities, agricultural and food and METS in the RED Toolbox – are places where Australian and Indian businesses, councils, states and other organisations can discuss trade and opportunity.

It can be done.

Vision. Decision. And off we go.

The tools are there for us to do it.

But not everybody is ready, willing or able to change.

This issue is beyond politics. And politicians are ill informed, slow and ill placed to do much about these issues, tied to the election cycle as they are.

Leadership will have to come from individuals, businesses, local and state government, utilities, corporates and other organisations willing to act.

Vision and decision.

Even today, access to reliable, affordable, high-speed connectivity (the foundation for a digital future) is a problem in our country. It is available in the cities and suburbs (mostly), but not across every remote, regional and rural area of our land. Through lack of vision and decision, we have created a second class.

Through lack of vision and decision, we are talking about giving the most profitable companies in our country tax breaks, when we should be investing that money in supporting productive industries.

The challenge to Australia and the world is from the disruptive technologies that will impact every industry sector.

We know what they are. We know what they are doing.

Other countries around the world are responding faster than we are.

But very few of them have the richness in assets and resources that we have to work with. So we have no excuse.

Vision and decision. Partnership and action.

Become a RED Toolbox partner and collectively, let’s see what we can do.


For more information contact Digital Business insights!



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