Category: Future

The Economics of Health

Posted on by Steve Sammartino
There are lots of business and life lessons emerging from the global Coronavirus pandemic. The first is simple, without our health, there is no economy. Health is the ultimate life goal and that needs to be atop of our decision hierarchy.
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Getting Priorities Right: The Australian F1 Grand Prix – This needs to be cancelled immediately.  It is the opposite of what every medical professional is recommending – a large gathering of people. As an economic rationalist, the best long term economic strategy is to be conservative. Let’s listen to health professionals. Let’s over react. The consequences of an under reaction could be catastrophic and cost more lives. The short term economic gain of an event, will certainly result in a longer term economic cost. Economic short term-ism never ends well.

The fact that our government has released an ‘economic stimulus package’ tells the story of their priorities. They’ve got the order of things back to front. They ought be protecting health now, and the economy later. Certainly protect the financially vulnerable in real time, but the best way to do that is focusing on stopping the spread by flattening the infection curve as quickly as possible. See below;

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Practice what you Preach: My advice above is not coming from the cheap seats. My work includes delivering keynote speeches at large public events around the world. The cancellations are coming in thick and fast, and I welcome it. There is a real economic cost to me, but I’d rather we reduce the overall impact sooner, and get back to normal quicker. Health now, business later.

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Respect your Customers: I have contracts with many of my customers. When they call to cancel or postpone work, I ignore the contract and focus on the person, the situation and how we can find a solution together. If there was ever a time to gain loyalty from the people you deal with, then it is in times of rapid change and uncertainty. People remember how you treat them in times of social stress.

At the end of the day, global issues like this effect everyone, but we get to choose how we react.

How to make the Gig Economy ‘Work’

Posted on by Steve Sammartino

Over 100 million workers around the world are hoping even harder than their peers that they don’t come down with coronavirus COVID-19. Who are they? Those working in the gig economy, where benefits like sick leave are something they can’t rely on. The worst part? If they do get sick, they might just have to keep on working, which puts everyone else’s health at risk. It’s about time we got innovative to improve the gig economy for everyone.

Let’s be clear on one thing – the gig economy isn’t going away. It is not a short-term aberration, but a long-term shift. Currently, the number of gig workers is growing more than 30% every year.

In the past, the reason we became employees was because the place of work was centralised – all the tools to do our jobs resided only in factories and offices. It was also difficult to find, train, ratify the skills and organise the work of people who weren’t under a company’s direct control. But the trajectory of technology today tells us that this is no longer the case. The traditional employee is no longer required and lower paid gig work is just the start of a freelance future for all. Sure, companies will still need to get things done, but they don’t need employees. The latest ABS data shows that 30% of adults participated in freelance work this month. Additionally, it is predicted that by 2027 there will be more independent workers than PAYG wage earners in Australia.

At the dawn of the industrial revolution, the major tools of production (think factory), became centralised. Before this, the large majority of labour was undertaken independently, either on the farm or as a craftsman. When we industrialised, people came to the cities en masse to partake in higher-paid work for large firms. To remove the friction of finding and training every week, workers became employees of the firm. This quasi-permanent engagement between the parties extended into office work as we entered the information phase of industrialised economies.

Fast forward to today and the friction of labour is being removed rapidly. The technology in our homes is as good as any office. Most forms of information work can be done anywhere, with NASA-powered computers in our pockets. Disparate labour can be organised around the world too, in real time. In the future, I believe that most people won’t be employees, but ‘digital craftspeople’ who hire their time to one, or many organisations. I’ll go as far to predict that within 50 years we’ll see global multi-billion dollar corporations with exactly zero employees. All their work will be performed by independent contractors – Uber on steroids. This will happen not only because it’s logistically possible, but far more profitable.

Problem: The current situation for gig workers is sub-optimal. Workers fought hard over decades for access to safe workplaces and fair remuneration, but these rights are now being eviscerated. Benefits like annual leave, sick leave, training, OH&S standards and superannuation have conveniently become the responsibility of the worker. This is a problem when we have economic shocks like the coronavirus. We don’t need to ban gig work, or make gig workers employees. We can be smarter than that. All we need is structural innovation and we only need look as far as superannuation to find an answer.

Gig Worker 2.0

It wasn’t until 1983 that employee superannuation contributions started with The Accord and became mandatory in Australia in 1992. Prior to that, superannuation was a benefit bestowed on only the fortunate few and workers with strong unions. What we need now is a new kind of gig worker benefit scheme akin to superannuation. This benefit scheme would provide a form of security for gig economy workers. For example, a simple percentage loading on labour fees could go into a fund to create employee-style benefits (annual leave, sick leave, superannuation etc) for gig workers, paid for by the firms hiring gig labour. Gig workers currently forego these benefits many of us take for granted. This way, gig workers can maintain their living standards and dignity while they are making their economic contribution . Governments the world over would do well to implement such a policy.

While the numbers would need to be verified, I would estimate the gig worker loading should be around 20%. While that might sound quite high, studies show that employee on-costs are anywhere up to 50% of their wages. If firms employing flexible labour say it won’t work – then I’d argue they don’t have a sustainable business model in the first instance.

The fund would need be in the worker’s name and ported wherever they perform gig labour. If we managed to pass such a law, our economy would be better placed to cope with the long-term shift to independent labour gigs, remain flexible, but also be able to cope with periodic shocks to the economy. It could also invent an entire industry for Australia – one whose model could actually become an export.

A New Industry

At some point in the near future, a smart government somewhere will implement such a policy (which is better than forcing gig workers to become employees), and lead the world in inventing an entirely new industry. In Australia alone, our Superannuation industry (which was spawned by the union movement) is now a $2.7 trillion industry and the 4th largest pension fund asset holder in the world. We’ve led the way. If we are first to set up this kind of a policy structure, we could export the financial management model of gig support the world over. However, this takes foresight, courage and political will.

Unions & The Gig Economy

Union memberships are in steep decline – it’s now less than 15% of workforce. In 1960, it was 60%.  It is difficult to see a future for unions. unless they reinvent themselves and pivot to offering non-union workers something they need in the future. Fighting for gig economy workers is the perfect innovation staring the union movement in the face. Unions should start focusing on representing new types of labour, who have powerful forces (like Big Tech) exploiting them. Enter, gig workers. Fuelling the erosion of the union member base is a myopic view of the type of labour that fits their model. They have an opportunity right now to go beyond traditional blue collar work, start a movement and become relevant again. Instead of using standover tactics to create profit share and inordinate wage rises, they can focus on what gave them relevance over 100 years ago, and that is fighting for fairness and a sustainable workforce.

If there’s anything we need in our economy, it is regulatory innovation to match the rapidly changing technology driven labour market. Yes – governments need to innovate too.

I spoke about this topic on ABC radio yesterday – click here to listen.

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Robot Love

Posted on by Steve Sammartino

We don’t just have a relationship with technology, we use technology to find relationships. Newspapers, video dating, website matching services and apps – and to the most direct of all – Tinder.

The reason Tinder works is simple. It replicates human behaviour in the real world. The moment someone walks into a night club they look around at the faces of people and say to themselves, Yes, No, No ,Yes, No, No, No, No Yes, Yes. And the people they are looking at are doing the same thing back at them – assuming of course they are both looking to meet someone. But in the actual nightclub there is that awkward discovery process of trying to work out if the other party feels the same way. Which then becomes the business model of the nightclub – Sell people drinks for that few hours of the discovery process.

One of the core functions of the alcoholic drinks was to make people look better, and feel more confident. Well, technology has managed to do replace this as well – let’s just say that instagram filters are the new beer goggles!

Technology has a way of replicating what we do in the real world, and in doing so, it creates competition in business which are non traditional, even hard to align. Beer volumes may decline due digital photo filters. Insights like this are very difficult to report in a corporate market share update.

In the not too distant future – things could get even weirder. People developing serious relationships with humanoid robots – Robots which look, feel and act, just like humans. The vote 50 years from now might make gay marriage seem so minor as we vote on whether or not humans and robots can get married!

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Happy Valentines Day.

The Decade in Tech

Posted on by Steve Sammartino

It’s pretty easy to forget how much a new technology changes our lives once it’s adopted. Sure, some new technologies are like shooting stars, but some change everything forever. So, for posterity’s sake, I’ve laid out a list of new technologies that changed how we do things, and maybe even the direction of our species. Enjoy!

2010

What happened: Google leaves China + Uber launches in App Store

Why it mattered: Google leaving China was the start of a New Cold War. China pushed hard to create clones of Western online services and even made better ones – see WeChat. This time the Cold War isn’t an arms race, but a race for quantum and data supremacy. The weird part is that USA and China both surveil their citizens, though the Chinese government isn’t making a secret of tracking their citizens, while the USA is pretending it’s about security when clearly it’s not.

Uber hitting the App Store was about much more than putting taxis on notice for terrible service. It was the start of the immediacy economy – anything and everything on demand, delivered to wherever we happen to be. The start of a massive GPS-driven logistics and mobility revolution.

2011

What happened: Twitch is launched + Steve Jobs dies

Why it mattered: For the uninitiated, Twitch is an online streaming service to watch people play video games. If it sounds ridiculous to you, then just remember that in many cultures we gather in giant stadiums to watch teams of adult humans dressed in co-ordinated attire kick dead animal skins through white sticks (football). It really was the start of the meta-economy where online activities are starting to gather layers and blur with the ‘real world’.

The death of Steve Jobs cemented his legacy as a quasi-Jesus figure for tech fans the world over. The problem was this created a dangerous idolatry of any innovation big tech companies launched at us. From this, the negative externalities have been ignored for far too long – including the massive issues we are now facing with Big Tech’s monopoly powers on par with nation states.

2012

What happened: Facebook buys Instagram for $US 1 billion + Tinder launches

Why it mattered: An open and fair internet took a massive hit when Facebook bought Instagram. This was the start of a serious economic consolidation of power while regulators were asleep at the wheel. The fact that we have a single ‘media’ organisation – and yes they are a media company – with massive influence over 2.4 billion constituents should make all of us lose sleep at night.

We’ve been finding mates online and in personal columns for decades, but Tinder normalised digital as a preamble to the physical meetup process. Meeting online went from weird to just plain ordinary.

2013

What happened: Edward Snowden’s NSA revelations + Facebook goes public with IPO.

Why it mattered: Snowden’s revelations of a mass surveillance programme targeting US citizens was the first time the wider population saw the downside of digital. While most people still don’t care, or at least act like they don’t, it did signal that privacy and security will eventually become the workplace health and safety of the modern era. If we are fortunate, it might spawn a new industry to protect our civil rights, while society and lawmakers catch up with the the reality of the risks.

Facebook goes public. Interestingly, its founder and CEO Mark Zuckerberg sends a letter to shareholders claiming that its mission of connecting (controlling) the world is more important than profit – but he fails to mention in said letter that he can never be removed from office or voted out. Just think of this: Mark Zuckerberg is in control of more people than anyone, ever, in history. To date, its market capitalisation has now increased fourfold since the IPO. Welcome to the Zuckerberg Dynasty.

2014

What happened: Facebook buys WhatsApp + Amazon Echo is launched

Why it mattered: It’s strange to me that Facebook was able to make an acquisition valued at $US 16 billion and still not capture the attention of antitrust regulation. They also said it was ‘impossible’ to integrate FB and WhatsApp services and data. Then, just like magic, they were able to do it a couple of years later, lolz… see 2012 above.

The launch of the voice services with Amazon Echo will be remembered in the future as the time when we truly started to communicate with AI. This was that moment. This will be when it got real.

2015

What happened: Google driverless vehicle hits the road + SpaceX lands first rocket

Why it mattered: When Google (now Waymo) put its driverless car out for all to see on a real road, industrialists sat up and took notice. We realised that cars were very quickly becoming rolling computers, that the digital world now shaped the physical world too. That was the moment that every business knew it too was now in the technology business.

The Space Race was once the exclusive domain of Big Gov. After a few decades of neglect, it has been miraculously revived as a private industry. If anything – this should signify the era of the bodacious billionaire where they have as much (or more?) power than elected governments.

2016

What happened: Donald Trump elected President + Theranos implodes

Why it mattered: In my view Trump is an inevitable symptom of crazy times and a radical pace of change. But it was the moment the wider world realised that news isn’t news anymore. We all live in echo chambers of existing belief systems and our minds can be hacked by the power of algorithms.

When blood diagnosis health startup Theranos was exposed as a scam – everyone started to understand that not all unicorns would live up to their hype, valuations or even their product promises. It was time to be very aware that in the real physical world beyond photo sharing apps, it’s very important that products actually work.

2017

What happened: Cambridge Analytica scandal + Bitcoin bubble

Why it mattered: The Cambridge Analytica scandal particularly annoyed me because it wasn’t the Cambridge Analytica scandal – it was actually a Facebook scandal. I don’t know how The Zuck pulled it off, but it was a stunning exercise showcasing the dark arts of blame deflection.

The bursting of the Bitcoin and crypto bubble was one we had to have. I liken it to the dot-com bubble of 1999. Cryptocurrency too will come back and change our lives, and this new financial system might change the world even more than the internet has.

Here’s the history of Bitcoin price:

2018

What happened: GDPR + Deep Fakes arrive

Why it mattered: The EU’s General Data Protection Regulation (GDPR) put surveillance capitalism on notice. While the opening gambit was small and probably affected the competitors of Big Tech more than those it was aimed at, it was the start of a movement to give power back to the people.

The first flurry of deepfakes hit the world and blew minds. But just wait until they are free and anyone can do it. It might just spell the end of audio visual truth. A few years from now, we’ll be asking people if they were actually there to prove it happened. This could put a massive schism into the entire web and anything news-related.

2019

What happened: Antitrust actions commence on Big Tech + Greta Thunberg named Time Magazine’s Person of the Year

Why it mattered: Antitrust actions taking place this year are a classic turning of the tide and the realisation we are in the middle of a gilded technopoly. The next decade will be one of regulation versus innovation – with the former taking precedence over the latter. It won’t be about stopping or slowing down technology, rather about civilising it so we can have progress for all humanity, not just the fortunate few.

Greta showed the world than even a child can command attention on issues vital for humanity. It’s amazing what can be said when words are not guided by vested interests. Here’s what I know for sure: we have all the technology we need today to have a low carbon emission economy. The kicker is that such a shift to a new energy model is probably the only way to maintain the economic growth the grownups seem to love so much.

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For me this is an era where the development of technology won’t slow – but its implementation might and it will certainly be more considered, competitive and wide-reaching for whom it benefits. I can’t wait to push deeper into the next decade and help build a future we all deserve.

The ATAR Disaster

Posted on by Steve Sammartino

I was once invited into a major university to lead a discussion on the Future of Education. I was excited by the prospect of exploring deeply and honestly what higher education is really for, and how it should look in the future. Ironically, I almost go chased out of the room by the same academics who invited me to challenge them.

The short version of the story goes like this: We started out by first workshopping what education was for. As expected we broadly agreed that it was for the enlightenment and betterment of society. To provide opportunities for people (students) to learn, grow and make a positive contribution socially and economically. They also agreed that purpose was more important than profit.

After this I then challenged them on why they even have an ATAR score? I continued, surely this is an outdated idea based on a model of scarcity which no longer exists? This is when things got ugly. They turned on me like I was the devil.

For those who don’t know the ATAR is a ranking system of students which is based on their academic performance in year 12. The rankings are then used to decide who gets into the ‘limited’ places Universities have for students in various courses. The more popular the course / university the higher the ATAR becomes to get into a course. To be clear, the ATAR requirment for courses is a popularity measure, not a minimum level of competence required to pass the University course. 

Back to my session at the University: After I asked about the ATAR, the attendees made lots of arguments as to why rankings and limiting numbers of students was absolutely vital. I remember this day like it has been carved into my brain with blood. So I thought I share some of the discussion which followed given that the ATAR numbers for 2019 were released just yesterday.

Academic Argument 1: Students with low ATAR’s wouldn’t be capable to pass the course they want to do.

My Counters: How do you know? Maybe the kids passion for the subject will motivate them more, maybe they are more suited to the independent study style and methods of assessment of Universities? If they do fail, so be it – why exclude them before they have a chance to prove themselves?

Academic Argument 2: We’ll end up with too many people in certain industries & areas of study.

My Counters: That’s fine – it’s a free market economy, why not let demand and supply sort out where things land, let the market decide. Economic incentives will naturally balance the market. In any case many jobs people will do 10 years from now don’t exist yet, and a large percentage of students never work in their area of formal study.

Academic Argument 3: Universities can’t fit every student that wants to study at it. Also, it would be too difficult to tutor the students, run ‘pracs’ and mark their work.

My Counters: University is like ecommerce now – we can run effective on-line versions of most courses. The size of the buildings is a limit in your minds, not our digital reality. Even so, why not have two divisions of study. On campus (those who got the ATAR) and off campus for those who didn’t make the cut. Most students don’t attend lectures these days anyway – it’s mostly done online and they submit work online. Surely a growing student base also creates employment opportunities for tutoring and marking? Why couldn’t we build new labs in alternative locations required for practical study as well?

Academic Argument 4: It’s not just the study, it’s the social element of the university, people learn from connections and being in the space.

My Counters: Let students self organise, provide forums for them to connect on, potential links with industry bodies. In any case, the environment might not be as important as you imagine.

Academic Argument 5: It would cost way too much to let every student who wants to go to University to get it.

My Counters: Expensive, yes. But hardly unaffordable. Education is our 3rd biggest export and our top 5 Universities alone have an endowment exceeding $10 billion.

You get the picture. This went on for the best part of an hour. It even got weirder at lunch, I had to sit at a table by myself, in fact some people got up and left the table I sat down at. I guess some people don’t like reality, especially when it may change how things might operate where they earn their living. I’m still glad I had the courage to do what I was asked. Mind you, I’ve had some terrific experiences presenting at Universities and even taught undergraduate students at Australia’s number 1 ranked University for a number of years. My views are not coming from some outsider who ‘doesn’t understand the system’.

Why this Matters

But here’s why I’m so passionate about the problems with the ATAR and its use for ultimate entry into Universities: It doesn’t just measure intelligence or effort. It’s really a measure of financial discrimination. The ATAR is a total disaster, designed to exclude, perpetuate false scarcity and maintain the power structure of higher education institutions.

No doubt, students with great year 12 results earn them. But the ATAR rankings by school look more like a rank for household income than anything else. In this country, we start the a process of financial discrimination from the first year of school. Just look at the top ranking schools for ATAR and the pattern is clear. Those with the most resources, get the best results. I don’t buy for a second that kids from less resourced back grounds couldn’t get the same results if they had the same access.

While we talk a lot about ‘A Fair Go’ in this country, we clearly ignore that when it comes to education. It’s a clear caste system, perpetuating generational advantage long before kids become independent economic agents.

My conclusion is that every single reason we restrict study isn’t for the students or the potential of society, but to maintain power structures in society and within educational institutions. Sadly, those with the power to change it are the beneficiaries of the existing system. If we really want to solve the massive problems we face as a society and ecologically, then we should probably aim to have as many educated people as possible and not restrict the opportunities to higher learning.

Don’t follow anyone

Posted on by Steve Sammartino

Some people like to accumulate followers. Not me. I hope I don’t have a single follower. I’d much rather have students of my work, as opposed to followers. A decade or so ago, the architecture of the internet took a turn, and gave birth to digital zealotry, people have become disciples of opinion instead of being students of fact. We’ve been gamed.

We are now judged on who we follow and how many followers we have. The way we quantify all that we do online and the language we use is leading us to a place which is both economically and politically dangerous.

For a brief moment, let’s review the definitions of the two words in question – Followers versus Students.

  • Follower: a person who adheres to another in regard to their ideas or beliefs, a disciple.
  • Student: a person who studies, investigates, or examines thoughtfully.

Upon reading that, I’m not sure why anyone would want to follow anyone online. Wouldn’t we all rather be students of the information we are exposed to or choose to consume?  Now, let’s imagine for a moment there are two books.

Author number 1 says: if you do what I say you’ll end up wealthy, healthy and happy
Author number 2 says: if you do what that first author said, you’ll end up broke, sick and miserable.
Which one should you believe? It’s pretty simple really. You should read both books and make up your own mind. This is the action of a student. The action of a follower, however, would be quite the opposite. A follower would most likely only take the advice of their favourite author, entrepreneur, technologist, CEO, politician, celebrity, you name it. Or even worse, some people just look at the metrics on the screen as a form of ‘social proof’ as to who is right. ‘Clearly the person with the most followers, fans, likes and reviews must be right, right? Anyway, who’s got time to do that research – better to  just go with the the crowd…there’s safety in numbers.’

This matters more than ever. Our world is quickly changing how it operates technologically, socially and politically. We happen to have a climate crisis that requires decisions based on scientific fact, not opinion. We need people to be students now, maybe more than we ever have in the history of our species.

People have become ideologues, blind fans of people and ideas, much like they might follow a football team. One-eyed supporters of what they can identify with, regardless of where the truth lies. The process is increasing the societal divide on important issues we need to resolve. And quite frankly, it’s an easy path to go down. I’ve even been a little guilty of it.

The technology around automobiles is one topic that people become very passionate about, regardless of their understanding of the facts. While it is clear the days of the internal combustion engine (ICE) are limited, what will replace it is not so clear. I’ve been such an evangelist of Battery Electric Vehicles, I’ve been quick to write off fuel cell Hydrogen Electric Vehicles as a valid alternative to the ICE. But just this week, I presented to the C-suite of one of the world’s biggest car manufacturers, who compete in all transport arenas. I had done my homework looking more closely at the tech and found out that the fuel cell Hydrogen Electric Car is in some ways better than the battery version. They are lighter in weight, they have a greater range, and can be filled much quicker than a battery EV can be charged. Even the most famous tech heroes of our time – those we trust to be the bastions of truth – can fall into zealotry. Elon Musk famously called fuel cell Hydrogen EV – ‘Fool Cells’. While I still think the Battery Electric Vehicle is better overall, I forced myself to dig deeper, and after investigating I learned both have advantages.

While the internet echo chamber can contribute to a post-truth world, we as individuals still have the choice to investigate the facts rigorously. In the long run, the scientific method ensures we’ll be beneficiaries of our own approach, regardless of what the sheep do.

Be a student, not a follower.

The Biggest Tech Trend for 2020

Posted on by Steve Sammartino

The biggest tech trend in 2020 won’t be a new widget or a shiny piece of glass. It will be one of the oldest technologies from civilised society: governance.

One of our species’ oldest and most important technologies is language itself. Our ability to write and document knowledge is what puts us on top of the food chain. Part of the documentation process is the rules, regulations and boundaries we use to govern the market place. 2020 will be the year we remember for how we ‘civilised’ the technology we all love so much.

In the past 20 years we have metaphorically discovered fire. The internet has become a tool which is so vital for mere economic participation, that no one dared asked if we should be careful about its consequences. But this fire has got a little out of control recently. While we want its heat, we need to make sure we don’t all get burned in the long run. Fire can keep our houses warm, cook our food and power a combustion engine, but it can also burn down a city if we don’t build in thoughtful safeguards.

Finally activists and governments are starting to take notice. Next year we’ll see actions which will make the GDPR look like child’s play. We can expect a number of market changing actions to commence. Things like antitrust action, algorithmic regulation, digital advertising standards, tax on data holdings, bans on data surveillance, outlawing of facial recognition and social media content standards, to name a few. Ironically, this will be a huge challenge for the disrupters themselves, as they have built entire business models around this largely unregulated territory. When it comes to tech, the ‘EPA’ is about to arrive to take a good close look at how they’ve been polluting our society with their data economy externalities.

So will there be any big tech shifts in 2020? Of course, they’ll keep coming thick and fast: digital twins, mesh architecture, hyper automation, human augmentation,  bio-tech interfaces, and autonomous things. But next year, the big issue will be the management of the political, social and economic consequences of the exponential technology in businesses.

Good news:

Tommy McCubbin and I have developed a new session we call 2020 Vision.

A year in review – A year in preview.

In this session, we review 2019 and preview 2020 by looking at what happened, what it means and what’s next. Many of the insights will surprise even the most agile of technology observers. The entire thing is presented in GIFs – yep, you read that right. It’s a fun session to end the year with your team, and sew the seeds of the thinking needed to thrive in 2020. We only have 6 slots available and I expect them to be gone by Monday.

If your team is up for it, hit me back with reply email and get ready to have your mind blown.

Steve.