‘It’s like Star Trek’: If you think the last 30 years have been a rollercoaster, you ain’t seen nothing yet

Michael Bleby Reporter

‘It’s like Star Trek’: If you think the last 30 years have been a rollercoaster, you ain’t seen nothing yet

Published 27 November 2013 12:04, Updated 27 November 2013 13:41

You ain’t seen nothing yet. If you think the past 30 years have seen great changes in Australia’s business and economic environment, hold on while the next 30 take off. Actually, you don’t even need to go back 30. As Atlassian co-founder Mike Cannon-Brookes points out, it’s hard to think how much our lives have changed since the launch of the first iPhone in 2007.“If even six years ago you had told somebody you’d have a device in your hand that could look up basically any fact in the world instantly, have video conversations, have all the apps, all the productivity gains that you can have on your phone, and you’d be able to do that from the bus on the way to work – people would not have believed you,” Cannon Brookes says.

“It’s like Star Trek. Apart from teleporting ourselves around, you can do everything they can do in Star Trek. And that’s in six years.”

For Cannon-Brookes, whose business software company success has propelled him and co-founder Scott Farquhar to the top of BRW’s Young Rich list with a combined fortune of $550 million and saw them debut on the Rich 200, the pace of technological change that will continue to slice a disruptive knife through all manner of industries is only going to increase.

“We’re not even getting started,” he says.“We’re only just at the start of the pace of disruption we’ve seen.”

It’s like Star Trek. Apart from teleporting ourselves around, you can do everything they can do in Star Trek. And that’s in six years. 

Too complicated

How are Australian businesses to respond to these changes? Don Argus, who is a former NAB chief executive and, as BHP chairman between 1999 and 2010, led the company’s transformation to global resources company, says the country has lost its way. He argues for an end to practices that make doing business more complicated.

“You can do things twice and three times sometimes in big organisations,” Argus says. “It’s how effective you become in introducing new concepts into an organisation. Throwing people at something isn’t the answer. It’s how effective those people are going to be in the production of what you’re trying to achieve.”

He is also critical of the previous Labor government’s economic management. “You’ve got to get back to the basics,” Argus says. “You’ve got to understand that if somebody gives you $1 to invest, then their expectation is that it’s going to be worth $1-plus in 12 months’ time and $1-plus-plus in two years’ time. When you’ve got your hand out looking for subsidies, that’s not the way for sustainable development or growth in a country, particularly in a country such as ours.”

It is unclear whether debates about a return to the policies of John Howard – who lost power in the same year the iPhone was released – are sufficient to equip Australia to deal with the disruption taking place. Argus says Australians have a clear understanding of what they need to do to cope with technological disruption, but cautions against too much focus on it.

You can always argue whether we’re quick enough, but sometimes not being leading edge in this stuff can save you a lot of dollars.

“I think Australians are pretty much up there in terms of understanding what’s required,” he says. “You can always argue whether we’re quick enough, but sometimes not being leading edge in this stuff can save you a lot of dollars. I don’t see that as a big issue. I think we’re quite innovative in our thinking around technology.”

It’s a different perspective to that of Cannon-Brookes, who warns that technology-based disruption requires all companies to understand what is coming and invest accordingly.

More women than men

Technology does, of course, make it easier to overcome other challenges, such as the need to involve more women in the workforce. Imelda Roche, who was a pioneering female entrepreneur in Australia through the Nutrimetics direct-selling business that she and husband Bill brought from the US, says the fact business is now transportable makes it easier for women to pursue careers in it.

“You don’t have to be sitting in a fixed location, or at a fixed desk to complete anything you need to do, in both life and business,” Roche says.

More women are pursuing business than ever before. Government figures based on the 2011 census show there are a higher proportion of women (27.7 per cent) operating businesses than men (23.2 per cent) in the 35-44 age category. The same figures also show women to be more advanced users of technology than men. More male business operators (6.2 per cent v 4.1 per cent) said they had no internet connection and more women business operators used broadband than men (89.8 per cent v 87.9 per cent) and a far greater proportion of women were conducting their business from home. Just 67.4 per cent of women business operators said they travelled to work, compared with 85.9 per cent of men.

Only an enabler

But technology can only go so far. Whether people choose to take advantage of the benefits it offers – including making it easier for women to develop professional careers as well as have babies, or future-proofing an existing business – remains a cultural and personal question.

And cultural norms change more slowly than technology.

“We really need to take stock of how we raise our sons and our daughters and the expectations that we inculcate into them,” Roche says. “You don’t make social change through revolution, you only make it through evolution.”

The changing economy forces change not only in how we do business, but also in how we debate it.

Argus warns against subsidising Australia’s automotive industry further – “just throwing money at industries that will never be competitive isn’t the way to do it” – but Cannon-Brookes says the car industry as a whole faces its own, much more fundamental, threat. He cites the example of Tesla, the electric car maker based not in Detroit, Munich or Tokyo, but in Silicon Valley.

Myopic debate?

“Tesla is tearing them all apart,” Cannon-Brookes says.

“The giants see exactly what’s coming. They’ve built a much, much, much more advanced car, that basically does to the car what the iPhone did to the phone. It takes all the buttons away and makes it 100 per cent about software; it has apps, it’s upgradable and all sorts of things. They’re scaring a lot of people.”

Change isn’t just about being able to FaceTime people from the bus and upgrade the air-conditioning app in your car. The entire post-war world order is being disrupted. Between 1981 – the year BRW first published – and 2010, for example, Australia’s per capita gross domestic product grew 75 per cent, to $US25,584 ($27,490) from $US14,660. Britain and the US posted comparable increases.

Over that same period, however, China’s per-capita GDP has leaped sevenfold to $US8032 from $US1110, according to the Maddison Project database. Australia’s per-capita GDP stood at $US1110 in 1835. It took a further 120 years – until 1955 – to get that to about $US8032. In short, China took just 30 years to do what Australia took 120 to achieve.

And in the new world, the stakes seem greater than before. “It’s all about technology, right?” Cannon-Brookes says. “Generally, the one with the best technology wins the whole game. It’s very rare that you get lots of people competing. Technology is kind of a winner-takes-all game.” Technology has meant that local newspapers no longer dominate their local market for job, real estate or car ads. SEEK, realestate.com.au and carsales.com.au have turned those into national markets and dominated them. The world is likely to have just two smartphones, iPhone and Android, he says.

Generally, the one with the best technology wins the whole game. Technology is kind of a winner-takes-all game 

Australian businesses need to understand the extent of disruption that is taking place and they need to make the technology that will help them survive. “Technology is the one true globe-flattening force that is great for some and very dangerous for others,” Cannon-Brookes says. “As Australia, we’ve got to make sure we’re on the right side of that, and that we’ve got companies and industries that understand that that’s happening.”

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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