“She’ll be right.”  The Island Bubble! (of complacency and comfort)

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Learning is a very personal experience, and much of our understanding and knowledge as adults comes from our lived experience. My working life as a consultant extends over 40 years, and I have learnt heaps! Sources of knowing include Active Learning (doing stuff); Storytelling, modelling and reflection. The following experiences have had a significant influence on my journey.

 Story 1

After a short time on one of my first consulting projects, I remember getting a message that the Union Delegate for the region wanted a meeting. I had addressed some staff meetings before this but not spoken directly to the Union. In this Industry, no one did anything without consulting the Union.

On reflection, I was tentative, even intimidated. The Union was powerful, and he was “an important” figure. He was, as it turned out, a “reasonable bloke” and just wanted a chat. He explained that his “boys” (a few women in the regional workforce) were not interested in work systems improvement – efficiency or productivity. They were very productive as it was. We talked about the range of concepts and tools we were proposing to introduce. His view was that they were only a management ploy to exploit the workforce and make them work harder, so “management” could get richer! Later an Industrial Relations academic confirmed that the unions saw productivity improvement (and Organisation Development) as a plot by management to make workers work harder.

It reflects a work culture many my age might remember.

Story 2

 In 1990 I participated in many national events (conferences and workshops) convened during the Governments Micro Reform Agenda. I attended many workshops and spoke at some conferences about the Australian business culture -and its impact on Australia business. (see blog)

 One workshop especially stands out in my memory. There were business leaders, union leaders and government representatives involved in Award restructuring and skill formation debates and conversations. In one workshop process, I heard one of the senior union leaders arguing as part of a heated discussion that Australians had only really been interested in redistributing wealth. That was was the wrong focus. He argued that for Australia to create wealth and be prosperous, we had “to increase the size of the pie”. We needed to develop strategies that included growing the economy and being globally competitive.

Does anyone remember the global Competitiveness and the World Class Manufacturing silver bullet?

I had been consulting for over ten years and had never heard the argument made in such clear terms before this: it was 1990.

It is now 30 years later, and my assessment:

we still have NEVER had a serious national conversation about wealth creation and the future of Industry and business in Australia. There is much conversation about why we can’t do things!

  • The IR system
  • The energy policy
  • Geography

Ultimately there are only two issues WILL and SKILL.

Few ever discuss the absence of “collective will!”

Paul Kelly in The Australian (March 21st) suggests that ‘we shun innovation, change and enterprise to huddle in a stagnant, low wage, poor productivity and outdated industrial system.” Not only that BUT “the parliament has looked into the future and retreated to nostalgia.” An indictment?

What does wealth creation look like in our future?

As I ponder those two stories, it strikes me that our national conversation on a good day is limited by “short term focus and is mostly inward-looking” and on a bad day by pure self-interest and greed.

Not only that, but the media and social media have caused a shift in news consumption which make it virtually impossible to engage in a serious and thoughtful conversation about anything substantive. As a nation, there are some big questions to address. There is a poverty of discussion in Australia about our shared future.

  1. A shared story about our history is critical as the basis of our culture. While it does not directly move us forward – resolving it with dignity and respect on all sides will connect us with the spirit of our indigenous people and the land of Australia. It is a 60,000-year tradition. (It is worth reflecting on the fact – the Australian is ONLY 120 years? – The story of our indigenous people and our land goes back 60,000 years)
  2. What is Australia’s place in the world over the next Century?
  3. Whom are we becoming as a Nation?

“Football(sport), meat pies, kangaroos and Holden cars” – (no Holden cars now– all made overseas!) Add beaches, bikinis and the long weekend, and the Australian culture is evident. Recreation and Lifestyle are symbolic (or pillars) of our culture. Based on this, we may well finish up the “lifestyle trash” of Asia! We may be rich, but we will be useless!

The COVID experience is a profoundly raw and tragic time in the world.  Australia has emerged as “a lucky country”, and a primary reason is our natural advantage – we are an island! I am confident when Bill Ferris published Australia 2030, and he named Australia as the Healthiest Country in the world as a National mission, he was not thinking about COVID.

However, COVID has highlighted some significant vulnerabilities in our business (economic) system. A fundamental question is do we have the foresight and courage to confront some ‘brutal facts’ or will we revert to the complacent self-congratulatory mode, which was characteristic of the time pre-COVID. It is happening as we speak.

It is at least 30 years since the major economic reforms of the Hawke/Keating era. So, what happened post that period? A summary.

  1. We enjoyed 29 years of continuous economic growth. Australia continued to become wealthy, BUT as one of our business leaders suggested:‘Australia’s position emerged from ‘a commodities bubble inside a mining bubble inside a property bubble.’ Matt Barrie Financial Review.
  2. Australia emerged as a service economy. When was that decision made?
  3. We are one of the richest countries in the world.
  4. Australia’s top 100 ASX companies are underperforming … substantially v US companies (Phil Ruthven)
  5. Australia’s Top 100 ASX companies reflect a 20th Century economy.
  6. Global Competitiveness – lower costs and shareholder value owned the business psyche, and being globally competitive disappeared. It slipped off the agenda. It was too hard! We outsourced what we could to China in pursuit of lower costs. Manufacturing declined dramatically.
  7. Global Indices – there are now many Indices against which we can benchmark Australia. Benchmarking was considered necessary in the ’90s (Information was harder to get in1990). A quick assessment now highlights Australia is not as clever as we think we are! On very few Indices is Australia ranked in the Top 20.
  8. On global manufacturing indices and Economic Complexity and the data is confronting!
  9. Complacency and self-congratulation became the standard.
  10. Union membership dropped dramatically.

As one commentator said during the COVID, the 20th Century continued in Australia till COVID (2020). We wallowed in and congratulated ourselves for over 25 plus years of uninterrupted growth.

Is COVID the wakeup call we had to have? Not really – we are now crowing about Australia leading the world out of COVID – with over three per cent growth over two quarters! It appears economically we have recovered.

There was much talk in the period of economic reform of creating a ‘clever’ country combined with learning organisations. In 2021 – there is little evidence that it happened. The indices on Manufacturing show Australia as a ‘basket case’.

Manufacturing Index[i]The value added to our GDP by Manufacturing

 

103rd
Manufacturing Self-Sufficiency[ii]How self-sufficient we are in terms of what we manufacture

 

Last
Economic Complexity[iii]The productive capabilities of our economy93rd

 

To change this requires a 30-year commitment. (At a Minimum?) There is little evidence we can think of in those terms. It takes us 30 years to decide Brisbane to Melbourne Inland Rail and the Sydney Airport. While I have no doubt, we have pockets of excellence in Manufacturing – they are few, and they need to be nurtured and cultivated over time.

So, what is our future?

Right now, we are, in my view, still the liminal time, and we have no idea when post-COVID starts?

The Australian government has announced a Modern Manufacturing strategy with an allocated $1.5 Billion – It is one step. Money is only a small part of the issue. (see, It’s the culture stupid!) https://benkehoe.com.au/manufacturing-in-australia-its-the-culture-stupid/

In recent months there have been some notable high visibility business decisions – on schedule? Hopefully, it is a sign of things to come?

  • BEGA – buys back the farm with Lion Dairy.
  • RM Williams – Twiggy Forrest (Tattarang -an Investment

Company) has repurchased

  • Bundaberg Soft Drinks – have signed an international licensing deal with Coca Cola.

I am confident there are others.

For Australia to have a prosperous future, we have choices to make:

Australia 21st Century 22nd Century
A mediocre business nation dependent on other countries for our economic survival A clever sovereign, Asian nation leading the world in creating global and national prosperity.
A nation of ‘stonemasons.’A nation of ‘cathedral builders’

The participants in the conversation need to understand many things, but four fundamentals are essential:

  • business is the primary wealth creation sector in society.
  • Innovation is a platform for wealth creation.
  • The commercialisation of Australian intellectual property is a potential platform for prosperity.
  • For Australia to thrive in the latter part of this Century, we must confront some cultural challenges.

[i] https://www.theglobaleconomy.com/rankings/Share_of_manufacturing/

[ii] https://www.abc.net.au/news/2020-07-23/coronavirus-pandemic-leads-to-australian-manufacturing-revival/12481568

[iii] https://www.abc.net.au/news/2019-11-02/australia-rich-and-dumb-or-an-innovation-nation/11657984

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