In Australia we are rich in resources. We rely on minerals. For they pay the royalties that keep state and federal treasurers happy.
We rely on education. Education for foreign students provides the income that keeps Chancellors and Deans happy.
But overreliance on both puts us into the pocket of decision makers elsewhere. We are not masters of our own destiny. When we should be.
For we have another hugely under-utilised resource here in Australia, and that is innovation and creativity. Manifested in the smart minds of ideas generators across the country, in universities, businesses, bedrooms, home offices and garages.
Yet, we somehow fail to leverage this resource effectively. Many of our brightest minds and most innovative ideas are picked up by vulture capital and taken offshore to benefit somebody else’s economy, not ours.
We could, for example, apply Australian innovation and creativity to our minerals, rather than just ship them out the door without value adding. We have minerals a plenty. We have rare earths and metals. We have the ability to process them. And we have the knowledge to build batteries and even battlestars. But we currently don’t have the will.
We should add more value to the things we grow. We have started, but we could marshal our creative strengths in design, branding, marketing and advertising and apply them a lot more effectively than we do today.
To engage with the world in a mature manner, we need to maximise the growth, promotion and selling of our productive industries strategically and intelligently, with “joined up thinking”, smarter planning, value adding, targeting and a lot more export.
We need to support our productive industries with investment into agriculture, creative industries, defence, ICT, manufacturing, METS, medical and health, smart trades and tourism.
For productive industries create revenue, export dollars and jobs.
They generate the wealth that feeds the taxman. That allows us to pay for the services and support industries that are important in a healthy society. But the sustainable wealth and opportunity is created by productive industries not support industries and services.
And we have to support the expansion of our productive industries to diversify our economic base to become more resilient, and less open to the impacts of changes in demand on any one sector of our economy.
We have to reach out and engage with more export markets to mitigate the impacts of political whim and popularistic leaders. And reduce our reliance on one overseas market if we want to provide jobs for our children and grandchildren into the future.
We have opportunities like few other countries in the world, because we are resource rich. With minerals and food, innovation and creativity.
But we are not taking full advantage of the wealth and value that surrounds us.
And the world around us is changing fast.
And slipping steadily into recession.
Unemployment and underemployment in Australia is close to 20%. See Roy Morgan Research for an explanation of this figure. Roy Morgan provides the facts of unemployment rather than the fiction.
The big banks and telcos have shed nearly 200,000 jobs over the last few years – moving people mostly in well-paid jobs into unemployment. But with sizable redundancy payments and other entitlements many of these new unemployed are able to exist for months or even years without impacting the unemployment statistics.
Further disguising the facts of unemployment.
Over the same period, the public sector generated 300,000 new jobs across Australia, while the private sector only added 54,000. Even further disguising the facts of unemployment.
Public sector jobs are non-productive roles that don’t generate revenue, exports or new opportunity. Centrelink on steroids.
This is not healthy.
Across the world the proportion of people in “insecure” jobs is creeping upwards. Less than half of all Australian workers now have permanent full-time jobs. In Australia about 4 million people now work on short-term contracts.
And the uncertainty of employment explains why cutting interest rates and even tax cuts, is not going to kick start the economy.The job insecure will not question low wages for fear of losing work. The job insecure will pay down debt for fear of the rainy day they know is coming.
It’s really not hard to understand why inflation is so low. It's not hard to understand continual low wages. Even Philip Lowe is beginning to awaken to this new reality. And he is right about infrastructure spending.
There is a universal shift to lower wages. Even within Google, less than half of workers are full time employees. Most are temps and contractors, receiving a fraction of the wages and benefits of full time workers, and with no job security.
The proportion of Australian workers in some type of non-standard employment is the third highest in the OECD, behind the Netherlands and Switzerland, both of which have better protection for casual workers.
The fastest growing category of new jobs is gig work – contract, part-time, temp, self-employed and freelance.
Increasingly, businesses need only a small number of well-paid specialists – innovators, strategists and senior management – responsible for core business and competitive edge. Most everybody else can be replaced by software, or outsourced. To the gig economy.
Which is the point so many ‘economists” miss. Software replaces, not displaces.
There is a myth currently being promoted, that people will lose jobs because of digital disruption (software) but that new jobs in different industries will be created to replace them. Jobs will be created but nowhere near enough.
And jobs do not exist in a vacuum. Businesses create jobs to fulfil necessary tasks, processes and activities. If those are being done by software, there is no requirement for a job. And few businesses keep somebody in employment if there is nothing for them to do.
Even businesses that can afford to employ people, should they so choose, such as banks with vast profits, are downsizing as a result of software. The big Australian banks have all got rid of tens of thousands of workers over the past few years. And only employed a few hundred in new job roles in IT and data analysis.
And most of the profits of economic growth, created by technology and software, have been captured by large corporations and their shareholders. The rewards going to the 1% not to the average worker.
The gig economy and software efficiency is making capitalism harsher.
Dividing “workers” into Haves. Have nots. And Have nothing.
The reality of this shift in society is being disguised in a variety of ways.
For political reasons, ideological reasons, wilful blindness and wishful thinking.
We are moving into dangerous territory. And with continuing job demolition as a result of technology and digital disruption, the situation is destined to get worse and worse.
All jobs will not disappear as result of digital disruption. An estimate of 47% seems reasonable. But whatever the percentage, there will be far fewer "jobs" available than there are at the moment.
We are now engaged in a rather cruel game of musical chairs, where everybody plays the game with an expectation that there is a place for them to sit, but chairs are being continually removed.
The players with expectation are our children, students, the unemployed and the underemployed.
Our children and students expect there will be jobs, in the way there always were. But there won't be.
They are being taught with an expectation that is the case. But it isn't.
And the unemployed are forced into a charade that getting their CV right or updating their IT skills will be enough to get a job. But it won't.
We have to plan for the Haves, the Have nots and the Have nothings.
Each group requires a different strategy. There are solutions. We have plentiful resources. And we can use our creativity and innovation to address these challenges successfully.
But more of the “same old, same old” isn’t going to the get the job done.
See my previous article “And after the election…what then?”
The big picture is that Australia is still largely riding on the back of mining royalties. Iron ore and coal. Which is great on the one hand. But it has made us lazy. In our thinking and our planning.
That reliance is now being challenged from various directions. Climate change. China. Digital disruption. Recession. Unemployment. Trade wars. Real wars. Underemployment. The changing nature of work. And so on.
Short term. Mining will keep delivering the dollars, but we can’t waste the thinking space and acting space that mining provides.
We have to start planning for the future. And start acting now. Which needs me. It needs you. It needs all of us. We can do it.