Wednesday, 5 June, 2019
This is an edited transcript of question time, which was moderated by Professor Will Rifkin, Director of the HRF Centre. It was recorded at the Hunter Economic breakfast in Newcastle on 16 May.
Q: What cultural or geographical factors do you think helped Eindhoven to use their crisis to its advantage whereas other communities haven’t?
Sander Van Amelsvoort: In a country as small as the Netherlands, if you are not involved in trade and innovation, good luck to you. Cultural and geographical factors are big determinants in this context. I was recently asked about this in the context of Australia. I think that the ‘tyranny of distance’ is very rapidly being replaced by the ‘promise of proximity’. Directly to your north, you have an Asian century taking off. That move will be of historical proportions, which means that the opportunities are of historical proportions. However, the competition will be as well. For a long time, Australia has had the benefit of being insulated from some of those competitive factors.
When you ask the question – what is the future of Newcastle, or of Australia? – you need to consider it in the context of this changing geo-political landscape.
Angus Maddison was a British economist who mapped out the world economy from 1st century AD. He found that, for the first 17 of the past 20 centuries, China and India generated half the world’s economy. When the Industrial Revolution comes along in the 18th century, we see a two or three century ‘exceptional period’, I suppose you may call it. What we are seeing now is that new convergence, where most people recognise the rise of China as something. This is interesting, because when people think about the rise of China or the Asian Century, they often tend to think about what has happened in the last 30 to 40 years. However, if you look at it using Maddison’s perspective, it is really a return to the historical equilibrium. The question for Newcastle, and Australia, is: what is your role in that world?
Q: What role do you think organised labour can play in supporting innovation? Why are they generally not invited to the conversation?
Dr Anthea Bill: I have not done any research specifically into the role of organised labour in supporting innovation. However, I do know what we learned from some work that we did at Hunter Research Foundation, speaking to 54 manufacturers across the region during a crisis in manufacturing. We saw substantial job losses in manufacturing. By interviewing some of the Hunter’s high performing advanced manufacturers, we identified the value of empowering innovation across an organisation, from the ground up, and through all levels. Ensuring that everyone is committed to innovation, whether they work in marketing, management or conducting a routine, low-skill operation, was one of the key factors. It was successful in infusing innovation across an organisation, which led to success in that innovation space. I am not sure why workers are not currently at the table.
Sander Van Amelsvoort: In northern Europe, particularly in the Netherlands and Germany, it is something that is part of every business council, called ‘Works Councils’. The really successful middle enterprises in Germany that have global reach have Works Councils, with labour leaders on their boards. That is mandated by law. That is a really interesting model. There are some down-sides to that as well. What it does do is to draw that aspect into the conversation. It helps those businesses to understand what kinds of accommodations they need to make in order to be competitive. Where does investment play a part and where does our labour force play a part? This could be another thing you could think about doing here – to explore those examples from northern Europe.
Professor Will Rifkin: I had a doctoral student who looked at dialogue between communities and mining companies. She landed on that key question – who is in the room taking part in the dialogue and who isn’t? When you think of organised labour, you think, who else is not in the room?
Q: A recurring theme throughout Festival events has been the difficulty for start-ups to source funding locally or otherwise. How do we reduce this barrier to entry?
Sander Van Amelsvoort: I am not too familiar with the funding environment here. I do know that access to capital for start-ups in Australia is a real issue. It is not only a question of whether there is enough capital. There is also the question of whether there are enough start-ups to spend the capital.
People often ask why Australia’s super funds can’t set aside a proportion of their investment capital portfolios to invest in start-ups. In my previous role at the Committee for Melbourne, we have found that the super funds often can’t justify finding the resources to build the knowledge required to set up that extra part of their portfolio. It is a key thing to think about. How can you build knowledge and awareness of these tactics among super funds in Australia? You also need a new risk mindset, so super funds have to consider how that would play out in their whole portfolio.
Another thing is the breadth and depth of the innovation system. Last night, at dinner, we spoke about the biotechnology research capabilities, particularly in Melbourne but also here in Newcastle. We have very strong capability in research but not in development. That has to do with many factors, including the small number of people who have experienced commercialisation in this sector from end to end. That also means that investors often don’t really understand that sector.
For example, with tech-start-ups, they often just need $100,000 and a couple of laptops, a lot of coffee and off they go. Biomedical research, a key strength in Australia, is a very different game. They are usually longer projects and involve a greater level of investment with high levels of uncertainty. These are the kind of projects that need to be tackled. Apparently, a lot of biotechnology companies listing as a way of raising capital because they can’t find it anywhere else. People in the industry are saying that they are often under-valued on the stock exchange because investors can’t see the value as clearly as they can in some other investments.
Professor Will Rifkin: In relation to the last question on why labour isn’t at the table, why aren’t the financial institutions at the table too?
Q: How do you manage the previous workforce and ensure the skill base that previously drove a city is not left behind?
Dr Anthea Bill: Some recent work by Alpha Beta on the future of jobs highlights the need for Australians, and Australian education providers on all levels, to better understand the need for continuous learning. That is one strategy for ensuring people are not left behind. Also, we need very deliberate and concerted efforts to ensure that there are policies and government programs in place to support potentially marginalised workers. There are already some normal safeguards for people. However, we will probably need new programs to identify and foster pathways into future work and education.
Sander Van Amelsvoort: This is probably one of the defining questions of our time, given the rate of technological change. I am not sure what the statistics are for the current workforce. However, the Foundation for Young Australians has estimated that the average university graduate today is expected to have 17 different jobs across five different sectors. I have young daughters and I believe the chances of them going through the same kind of educational experiences that I have enjoyed are very small. I suspect that by the time they grow up, the idea of signing up for a university degree for four years, at the end of which you qualify for a profession, will be entirely different. I suspect it will be much more about lifelong learning, continual upskilling, micro-credentialing, and learning how to ensure your credentials are recognised.
It is hard to think about education needs in the 21st century. We talk about STEM skills in Australia, which are needed. We also need to have a discussion about the enterprise skills that are needed because more and more functions in the economy are going to be increasingly automated. What does that mean for your unique value as an employee? That is around critical thinking, negotiating, creativity, problem solving and team-playing. It is also about how you manage an increasing portfolio of skills, as you upskill throughout your working life. How do you manage a portfolio of jobs in the gig economy, where on Monday I work for one business, on Tuesday for another and in between I run my own business? These are all fundamental questions we have to grapple with if we want to maintain a competitive workforce.
Dr Anthea Bill: To involve all the elements in the city working collaboratively is a great step toward addressing some of the social problems that might come out of automation.
Q: How can Newcastle elevate collaboration (between business, civic leadership & the community) above the often mundane & immature realpolitik?
Sander Van Amelsvoort: First of all you need a shared sense of what the changes are going to be. Nobody is going to be immune from changes taking place that are outside our control. Technology, international politics, economic events, ecological trends – all these things are beyond our control. They cannot be solved at the local level or even on the national level. We do need to have a shared idea, as a society and as a community, of what changes are out there for us.
How do we want to navigate them? Having the ability to pull together around just that question is really powerful. To overcome the mundane and immature realpolitik, you need to first understand that we are all in this together. That takes time. You need to go back and forth, and sit down at the table again and again. There is no shortcut.
Dr Anthea Bill: I recollect comments from David Bartlett at the Hunter Economic Breakfast in March. When speaking about Tasmania’s response to the establishment of the Museum of Old and New Art. He talked about the need for more progressive thinking and investment in the arts. There is a role for the media, and for leaders, in not under-estimating the understanding and sophistication of the populace. Even framing the question is a challenge for our leadership and our participation in the region.