Transcript Regional Development Strategy in the Second Machine Age

Confronting Business Threats and
Opportunities in the Second Machine Age
Arm-e-Dale: Intelligent City of Tomorrow?
An Die Nachgeborenen, B. Brecht
(To those who follow us)
Tony Sorensen
Adjunct Professor. UNE
Wednesday 25 November 2015
Quotable Quotes on the Future
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"If you don't think about the future, you cannot have
one." John Galsworthy (1867-1933), Nobel Prize
Winner in Literature
“If the rate of change on the outside exceeds the
rate of change on the inside, the end Is near.” Jack
Welch (1935-), former CEO General Electric
"Tomorrow, and tomorrow, and tomorrow, creeps in
this petty pace from day to day, to the last syllable
of recorded time; and all our yesterdays have lighted
fools the way to dusty death." William Shakespeare
(1564-1616), Macbeth
The Second Machine Age (2MA) *
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We are on the cusp of the Second Machine Age (2MA:
Brynjolfsson and McAfee) characterised by:
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A large array of new technologies
The increasing blending / fusion / integration of those and existing
technologies to yield a large range of new commercial products and
services, or new production and delivery methods for existing products
and services
New lifestyle opportunities and living arrangements
* Aka: Third Industrial Revolution (Rifkin)
SMA: Technological Soufflé
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Enhanced ICT
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Quantum computing
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Big data / information storage
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Robotics / Artificial General
Intelligence
New materials (light weight, high
strength, anti-corrosive, good
malleability, etc. – graphene and
stanene)
Automated construction techniques
(look up DIRTT in Calgary)
Human augmentation (wearable ICT,
surgical implants as foreseen by
Kurzweil)
Smart everything: agriculture, mining,
homes, vehicles, cities
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New Food (e.g. synthetic meat printed on
3-D printers; chemical cuisine (or Note-byNote cooking); synthetic milk (whose
research conducted by an organisation
called muufri); protein from harvesting
insects)
Bio-medical (cures for many common
diseases; GM advances)
Transport (e.g. drones, driverless cars and
trucks, Elon Musk’s vacuum tubes, and
aerospace)
Renewable energy generation and
especially storage using new battery
technologies
E-tailing and e-governance
14 Domains
FinTech
Profound Regional Impacts – to 2040 (1)
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The acceleration of economic and social adjustment – perhaps four
times faster than in the industrial revolution between c. 1750 and the
late 20th century
The demise or drastic remodelling of existing businesses providing
goods or services
Loss or substantial revision of perhaps 40% of existing job in 20
years), particularly those that are low skilled and likely to be
replaced by robots … but even doctors, lawyers and accountants
The creation of many new businesses and jobs – for burgeoning
technology can provide huge opportunities for adaptive and
innovative individuals especially if they can snap up first mover
advantage
A countervailing rise in a culture of future orientation and willingness
to (i) junk past practises and perceptions, (ii) take higher risks, and
(iii) expect bigger rewards from innovation
Profound Regional Impacts – to 2040 (2)
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Greater fragmentation of social norms and lifestyles, accompanied
by greater social inequality as society rewards skilled people with
agile minds and penalises those with poorer skills
Huge advantages for some places and losses for others depending
on their capacity to handle rapid change and seize opportunity –
according to their mix and quality of human, social, built /
constructed, resource, environmental, and financial capitals
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The old and the new will not necessarily be co-located
Rewards are more likely to flow to individuals and communities with
high knowledge, inquiring – creative – imaginative – flexible minds,
strong ability to take risks, high networking capacity, well organised
business and social support systems, good access to venture capital
Australia is Far from a Level Playing
field
RAI’s Competitiveness Index
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Technological Readiness
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Rising Complexity and Uncertainty
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Moreover the world we are entering will be made even more
difficult by:
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The burgeoning complexity of emerging social and economic systems,
especially as globalisation progresses and nation states lose further
control of their well-being
Social fragmentation proceeding apace
The increasing interconnection between social, cultural, economic and
environmental processes, with circular and cumulative effects that are
often exponential rather linear
Poverty of accurate data in a fast-changing world (despite the event of
Big Data, which tends to measure the past rather than emergent
landscapes)
The cutting in of chaos and tipping-point processes consequent upon
complexity
The increasing riskiness of forecasting even over the medium term – the
accuracy of detailed long-term forecasts in such an environment is likely
to be very low
Surviving Uncertain Technological Worlds
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Survival requires the pinnacle of adaptive and innovative capacity –
among businesses especially, but across all dimensions of society:
government, social and community groups, local institutions of one kind
or another, and even individuals
Rapid change is more likely to be handled successfully where:
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All parties are creatively involved and have strong future orientation
(rather than longing for a receding past with all its comfortable traditions)
There is willingness to debate and prioritise future options (Taleb’s
Optionality)
There is active, but civil, dissent and conflict of ideas (there is little future in
group-think – Florida, Jacobs)
Local society has a culture of imagination and creativity coupled with
considerable experience in successful risk taking
There’s a good supply of risk / venture capital
Governments Have a Role
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All tiers of government can help regions in varying degrees:
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Supply of good quality infrastructure – transport, schools and hospitals,
libraries and cultural facilities, telecommunications (e.g. high speed
internet), etc.
Leadership in ushering in a culture of future orientation
Delivering business advisory services to a limited extent
Husbanding amenity – e.g. environmental and recreational services
And, in Australia, various grants commissions help realise USOs &
CSOs through processes of fiscal equalisation. Other countries have
similar mechanisms
Limitations to Government
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Conservative electorates fearful of change
Trends towards coalition formation through social and cultural diversity
The tyranny of the macro:
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Domestic macro-economic considerations (external trade, fiscal and monetary
settings, Reserve Bank discount (and interest) rates, financial regulations,
competition policy, conservative government budgetary settings, etc.)
International and inter-state competition trumping regional interests
Congenital inability to spark business innovation or identify new business
options – this is largely the realm of commerce
Increasing complexity and uncertainty of their policy-making environment,
leading to risk aversion and failure of imagination about what might be and
how best to achieve it
Lack of understanding of the dimensions of 2MA and threats posed
Preference for waterfall rather agile projects – there are many more votes
in building dams (and opening them!) compared with fostering imagination
Lack of experience in policy arenas involving changing people’s and
communities’ psychologies - perceptions, attitudes, opinions, cultures,
ambitions, etc.
The Local Option
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So, in my view, creation of the future for places is largely being left
to local communities each with very different portfolios of assets,
human capacities, and geographical relativities
But this localisation is likely to create a wide range of outcomes,
some positive in rural communities like the one where I live, but
perhaps most negative – depending as noted earlier on:
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Leadership qualities
Resources – various kinds of financial , human, social, built, and natural
capital, and
Appropriate Psychologies (regional development is, drawing on the
work of economist Richard Thaler and my own work, profoundly a
question of understanding and shaping attitudes, opinions, beliefs and
behaviours)
A Portfolio of Local Strategies
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Creation of innovative and adaptive futures might include the
following threads:
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Funding
These dimensions reach their
apogee in places like Silicon
Talent
Valley and Tel Aviv, two of the
Support
world’s leading business start-up
locations
Mindset
Trendsetting
Diversity
Amenity
Optionality (as conceived by Nassim Taleb)
The first six items come from startupcompass (see
http://startupcompass.co/)
I’ve added the last two myself from other literatures
Interdependencies
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Note that each dimension is interdependent with the others in often
complex, non-linear, and cumulative ways
The whole agenda requires enormous qualities of leadership
sustained over a very long period of time
Prominent leadership qualities include: imagination, creativity,
analysis, knowledge, ability to galvanise action (i.e. motivation),
networking capacity, lucid – but - simple explanation of direction,
etc
Moreover, leaderships are likely to be teams rather than individuals.
This task is too big for a single person. See Alex Pentland’s notion of
social physics
Such leadership talents are more likely to be prominent in larger
and more diverse regional economies
In Conclusion
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This is a game changing agenda – one focusing on attitudes rather
than infrastructure – and clusters of energetic and innovative people,
not inter-linked or inter-dependent businesses
It requires enormous and sustained energy
Endemic risk taking and trial and error are central to it – which can
be observed in some businesses, but not across whole communities
We badly need a compendium of what works or doesn’t work for
businesses and why that is the case (we learn from experience and
in fast moving economic environments we can cut corners by drawing
other’s experiences – see Montaigne’s ‘essais’, published in 1580!!)
This action requires participation by as many interests as possible –
a whole of community experience
Non-participation is not an option – your survival is at stake
Armidale Well Placed?
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In many of the respects already discussed, Armidale is wellplaced to be part of the action.
…. but we could a lot better, and approaches to the task
should be the subject of considerable on-going debate.
…. and the Chamber of Commerce could be a lead player.
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Thank You!