My piece focussed on identifying five opportunities for innovation leaders and governments to be impactful in the early phases of the COVID-19 crisis. This recognised that these early phases (discussed here) require a focus on providing both an underlying buffer to local communities and economies as they endure inital economic and health shocks, and best ensuring conditions for recovery in later phases when the time is right.

This conversation followed an intense period where federal, state and local governments underpinned the economies through a range of broad brush-stroke measures such as income support and cost reduction via removal of taxes, fees and charges. These were taken as assumed.

Nothing is novel here - but hopefully it is of use to some.

Below is a brief description of the rationale for each identified opportunity, with some examples of where local economic development champions, including innovation leaders and local governments, may work together to realise impact.

Opportunity 1. Re-empower local communities and economies

Rationale

The early stages of the COVID-19 crisis have been incredibly disempowering times for many Australian communities and enterprises. Federal and State Governments have made major decisions that have intentionally contracted economic activtiy in an effort to stop the spread of the virus. This has had huge rammifications for workers, enterprises and communities who are feeling the impacts of decisions way outside of their own control. Responses to this lack of agency include:

• Intentionally ignoring the situation and underplaying its impact;

• ‘Hiding under the bed’ and waiting it out (a temptation I fight at least a couple of times a day); or

• Acting in unproductive ways to assert some sense of control over the situation e.g. hoarding groceries.

These responses are rational to individuals, but have significant negative impacts individually, socially and economically.

We need to urgently support our communities, including workers, enterprises and entrepreneurs, in becoming empowered in this new context if they are to realise any of the other opportunities dicussed below.

Potential focus areas

• Act as currators, content generators and promoters to provide timely, useful and accurate information including:

  • Available support;

  • Positive/constructive activities/behaviors that are working elsewhere; and

  • Data to support stakeholders to make better decisions.

• Re-engage with democracy:

  • Everything is suddenly out of date/redundant - including democratic mandates. Decision-makers must get a rapid understanding of what communities need/desire, and a mandate to do what is necessary; and

  • Traditional local communications channels are failing/being distrupted (e.g. local newspapers). How do we communicate outside of traditional channels and reach all of those that we need to? How do we ensure this communication is 2-way, with timely, accurate and useful feedback being recieved by decision-makers?

opportunity 2. facilitate and optimise local trade

Rationale

Major state, national and in international supply chains are being disrupted, may remain disrupted for some time, and may never be quite the same again. In the absence of these supply chains, how can we facilitate trade within, and between, local economies?

Potential focus areas

• Facilitation of linkages between locally distrupted supply chain participants and consumers who may no longer be able to access their usual good and services (see the Shire of Murray’s local food initiative in the seminar mentioned above);

• Development of alternative supply chains that can take advantage of surplus local goods and services (e.g. downstream manufacturing); and

• Development of alternative marketplaces that provide goods and services to newly localised markets via novel channels, product bundles and solutions.

Opportunity 3. capture and retain local value

Rationale

Globalisation has meant that many major export activities are often largely or completely bypassing local economies - with benefits of economic activity acruing elsewhere. This has been offset in some cases by industry contributions to local infrastructure and initatives but in the current economic climate, these constributions may be constrained or not available. Meanwhile travel and supply chain restrictions mean that local goods and services may now viably substitute ‘imports’, representing opportunities for local enterprise.

Potential focus areas

• Active engagement with major industry to understand where bottlenecks/supply issues may be occurring, and where there may be opportunitirs for local enterprise to solve these bottlenecks;

• Identification, profiling and promotion of surplus local production/local economic capacity to local producers;

• Development of trading schemes and purchasing policies that prioritise local production capabilities; and

• Utilisation of technologies to facilitate transactions, local credit/bartering, and data tracking of value creation resulting from local economic development activity.

Opportunity 4. do we do more with what we have

Rationale:

All local economic development partners, including governments, agencies, businesses, community enterprises, entrpreneurs and consumers are experiencing a period of scaricty, as revenues decline and costs remain or rise. Despite this, there will exist excess capacity in each local economy that could potentially be leveraged for local benefit. This might include:

• Underutilised talent;

• Infrastructure with surplus capacity; and

• Funds allocated to projects that are no longer relevant.

Potential focus areas

• Identify and communicate excess capacity to local supply chains, enterprises and entrepreneurs, with support in place to develop, pivot or scale initatives to take advantage of this capacity;

• Optimise decision-making technologies (e.g. machine learning and data collection technoligies to support decision makers in making more efficient, timely, accurate and/or impactful decisions;

• Adapt and utilise excess capacity to meet the needs of community members that may not traditionally have been focussed on/served (e.g. disadvataged populations, entrepreneurs, SMEs); and

• De-risk initatives that may take advantage of excess capacity, through removal of unnecesary regulation, financial support, partnerships, etc.

Opportunity 5. Ensure that stimulus benefits our communities

Rationale

‘Stimulus’ initatives to date have focussed on underpinning economic activity during the health shock that is beginning to be experienced in communities across Australia. As this shock is managed, there will be a need for further initatives focussing on waking economies up from their hibernation. Local champions and decision makers need to be prepared with programs of investible initiatives that are targeted to the needs and priorities of their local economies.

Potential focus areas

• Work with economic development stakeholders to develop a clear understanding of priorities, including identification of transformative initatives that may underpin new economic activity;

• Develop programs of initiatives (rather than a bagful of stand-alone projects) that will collectively realise significant impacts over the short, medium and long term;

• Identify regional and cross-regional partners with common agendas, and develop joint advocacy programs that promote joint opportunities and impacts;

• Collect and collate data relevant to potential future economic development programs for use in advacy and business cases; and

• Develop pitch materials that succinctly descibe opportunities and the investment proposition to public and private sector investors.

Again, nothing is new or novel in the above, but the current circumstances suggest a different level of urgency. The economic development community has the opportunity to make a lasting difference to the prosperity of each of our communities, but this will require us to be innovative, creative, courageous and effective in the coming months. I can’t wait to witness the positive change that we will collectively realise.

Coming to terms with local economic implications in the middle of a global health crisis is challenging. First and foremost - health of communities needs to be prioritised, then we can respond to the economics. When we do - here are a few of our thoughts.

Below is a quick summary of conversations/social media rants in which I have been involved in recent weeks – each focussing on where there may be opportunities to deliver meaningful outcomes to local economies/communities in this unprecedented time. I’m sending this on the off-chance that these thoughts might be useful – otherwise please delete.

Disclaimers: Much of below is out of the control of any individual/group, except in advocating on behalf of communities to other levels of government/agencies.  All ideas are certainly uncosted and are not intended to represent a coherent economic development program at this time.  None of this is new, and some of it is already enacted in different jurisdictions. Finally, everything is changing so fast that I reserve the right to backflip on a moment’s notice!

Firstly, it is important to recognise that this crisis is likely to have distinct phases to it.  We will be different from other places that have already been through this, in that the global economic impacts will be hitting us before the health.  On this basis, phases potentially include:

1. Initial economic hit/panic – we are all experiencing this right now – health impacts are limited, but macro and microeconomic impacts including limits to movement/trade felt - with associated disempowerment and anxieties;

2. Health impacts hit – communities will start to feel the personal effects of the virus, with economic priorities being secondary to health concerns. Impacts will lead to more stringent local restrictions and potential for significant disruptions to local and traded supply chains;

3. Normalisation of virus life – communities adapt to a new normal, with more virtual meetings/engagement, mandatory self-isolation if ill, limited travel and potential scarcity of goods (and jobs). The economy can be stimulated as trade adapts to new conditions and new opportunities;

4. Medium-term recovery – Functional economic conditions return, but potentially are significantly different to conditions prior-virus. Opportunities will exist to encourage transformative projects that foster local prosperity and resilience.

In the coming months, we should not be talking about ‘stimulus’. Stimulus implies there is something to stimulate. What we need now are measures that ensure there is a functional economy to stimulate by Phase C:  This might include initiatives such as:

• A social distance dividend to offset the sacrifice of all members of the community for the period of social distancing (lockdown).  The dividend should be equivalent to a living wage. Given massive budgetary impacts, it may be made available once all employer leave entitlements are expended;

• Publicly backed lines of credit for trade debtors including banks and trusts (an absolute necessity if you want to enforce rent/mortgage holidays);

• Rent-holidays on any Fed/State/LGA owned assets and advocacy for rent/mortgage holidays for households and small businesses;

• Freeze/subsidise essential services including broadband internet - given its role in keeping the economy flowing;

• Promotion and coordination of workforce to seasonal opportunities – regional communities are struggling to access a casual workforce for crop seeding.  Linking casuals with these opportunities;

• Publicly protected supply chains for essentials to remote and vulnerable communities – ensure those at the end of supply chains aren’t missing out as they inevitably become disrupted;

• Support localisation of supply chains - foster distribution of local produce to those in need;

• Targeted support programs to incorporated associations who deliver services to local communities and are significant employers but potentially fall between the cracks of current stimulus packages;

• Local infrastructure grants program that targets easy/quick to implement public realm projects that are designed and delivered by local enterprise;

• Workforce skills – vouchers for local workers made redundant/unpaid leave due to coronavirus to get online training support to develop new skills that they could do whilst in isolation;

• Virtual spaces and programs provided by local co-working/startup services to support those wishing to explore opportunities to start their own business/develop an idea whilst they are in isolation;

• Coordination of virtual festivals – local performing arts communities to put on a couple of days of entertainment via one of the free-to-air tv stations/online streaming. Facilitate donations aka telethon (god knows we’ve sat through that for years for a good cause).  Given the lack of content for secondary stations without sports, this could roll on every weekend.  Utilise regional channels to provide local content;

• Sensible suspension of ‘change of use’ planning processes for discretionary uses to allow businesses to trial new initiatives/business models without hindrance; and

• Shortened payment terms for local business – pay on 7-day terms to terms to local suppliers to help support cashflow.

Be a little cautious in focussing on industry-specific stimulus right now.  Almost every industry and supply chain is going to be massively disrupted and seek support. You might find it hard to ignore precedents as this gets worse. There may be some industries that are too-big-to-fail, but I’d suggest being very careful about just focussing on the first impacted. Targeted stimulus packages can come in Phases c) and d) once the supply and demand-side shocks start to subside.  Focus on the safety net.

Also, be cautious about planning for a V-shaped collapse and recovery. Yes, the Chinese and others will likely pump massive capital into projects, and that might be good for the resources sector and GSP/GDP. Such activity will take a long time to trickle down into local economies.

Consumers will be hit hard by this crisis.  Savings will be depleted, lost jobs may not return, and confidence will take a hit. It might be best to focus on place-based stimulation that makes a very local difference over larger big-ticket programs.  We may need to literally go business-to-business, entrepreneur to entrepreneur, worker to worker to develop meaningful local stimulus in Phase c).

Again, the above is shared on the chance that something may be useful in your work and thinking. 

Let’s support each other in championing our communities in coming months. Hopefully we can help foster something great from this very challenging time!  Stay well and in touch!

• Economic development strategy is highly context specific - there is no ‘one size fits all approach’;

• Whilst ‘place’ is a natural domain for LGA’s to focus economic development initiatives, impact will only result from carefully developed programs of initiatives that go beyond ‘placemaking’ and encompass both the creation of opportunities, and development of capacity to realise these opportunities;

• LGA’s can’t do it alone. Communities and enterprises need to be engaged and empowered to ensure alignment between stakeholders.

Thanks to WALGA for hosting the breakfast - it’s great to see the Association take a strong leadership role in supporting the development of ED capacity in Western Australia!

Great article describing how the societal contribution of entrepreneurship should not be measured in through the act of being an entreprenuer itself, but instead the contribution of activities.*

"...productive entrepreneurs focus first on growing the pie; unproductive entrepreneurs are focused first on dividing the pie; and destructive entrepreneurs are really only interested in stealing the pie."

What is shocking is just how plainly prevalent of unproductive and destructive entrepreneurship is in most communities, and how resigned most of us have become to the idea that any change is going to benefit the few, rather than our communities collectively. The ever evolving ‘Watergate’ scandal is a seemingly good contemporary example, with the recent banking royal commission providing a myriad more.

Some characteristics of unproductive/destructive entrepreneurship include:

• Established legacy industries expending significant time and resources to pressure decision-makers into ensuring a continuation of favourable operating conditions into the future despite obvious market trends/negative impacts for communities. This includes lobbying, regulatory capture or in the extreme blackmail/bribery;

• The use of technical legal avenues to ensure the perpetuation of existing activities despite regulation (e.g. leveraging legal loopholes to bypass environmental and planning regulations);

• Use of market power to dissuade/drive off new market entrants/technological disruptions;

• Use of public relations activities to manage the consequences of negative PR;

• Realisation of profits far exceeding the value created via monopolies, privileged connections, tax loopholes and/or use of complex financial instruments;

Importantly, unproductive entrepreneurship may often not be illegal and may be considered prudent business for those invested in preventing or slowing change. As a society however, we must recognise the opportunity cost to productive entrepreneurship. Unduly distorting the playing field to the benefit of the incumbent, the connected, and the entrenched disincentivises development of new solutions, to realise new opportunities, that grow the pie for many. This can only make our communities and economies more fragile into the future.  

* The article references a 1990 study

Some notes from a recent project on considerations for development of effective assessment frameworks that capture the impacts of new/emerging disruptive tech.

Assessment Rationale

·       Introduction of disruptive technologies can lead to a range of socioeconomic systemic impacts – with both positive and negative being experienced by different parties;

·       Focus is often on broad statements of ‘net impact’ that attempts to summarise the overall merit/cost of a project. Such an approach can produce pithy headline figures but often overlooks nuances critical to project success;

·       Successful adoption of technologies requires a shared understanding of the intricacies of impacts to key stakeholders, with implementation ensuring that positive impacts are shared, and negative impacts mitigated where possible;

·       Impacts can be classified as being either:

·       Direct – the cause-effect consequences of the implementation of the technology.  This can include the results of investment and spending decisions associated with construction and implementation of the technology (e.g. additional capital expenditure, generation of additional revenues, employment of new labour) and the shifting/mitigation of costs (e.g. costs delayed, incurred by another party or reduced)

·       Indirect - results from transactions throughout related supply chains that would not have occurred if not for the implementation of the economy (e.g. purchases from suppliers of new/additional inputs, increased employment by suppliers, collaborators and customers resulting from activities)

·       Induced – result from general changes in behaviours resulting from implementation of the technology (e.g. increased investment in local communities, increased productivity/competitiveness in economies, decrease in prevalence of ‘negative’ behaviours)

The Need of a Strong Base Case

·       ‘Impact assessment’ implies a measurement of change resulting from some sort of disruption;

·       Any assessment of impact requires a strong base-case that articulates the ‘business as usual’ situation – what conditions will likely exist without introduction of the disruption;

·       Many impact assessments retrospectively model a hypothetical base case rather than collecting reliable and valid data prior to introduction of the disruption.  This diminishes the robustness of the assessment.

Identifying and Testing Areas of Impact

·       A robust impact assessment will attempt to consider direct, indirect and induced impacts from a range of different perspectives (e.g. impacted governments, communities, industries, stakeholder groups etc.).  This recognises that one group’s cost can be another’s revenue.

·       Assessment of each impact should be based upon a strong as possible understanding of causal impacts.  In a perfect world we would have strong statistical evidence as to cause and effect of the disruption. In reality, developing an assessment of impact in a timely and efficient manner will likely require articulation of ‘plausible impacts’ suggested by the best evidence available.  The assessment would draw from evidence including (in descending order of robustness):

o   Statistically proven cause and effect based upon data from the exact context;

o   Statistically proven cause and effect based upon data from a comparative context;

o   Profiling and contextualising of outcomes from a range of identified comparative benchmark projects;

o   Modelling of identified plausible impacts; and

o   Modelling of ideal impacts resulting from project goals.

·       Whatever the level of assessment, there will always be consideration as to the sensitivity of impacts (i.e. variability resulting from changes in assumptions).

Challenges in Impact Assessment of Disruptive Technologies

·       A critical challenge in any impact assessment is determining causation (rather than correlation) of impacts. Often this is not possible within the scope of the Assessment - particularly for indirect and induced impacts.  This should be documented with the validity of findings being treated with appropriate caution;

·       Areas of assessment can be influenced by the availability of data, with the overall assessment being biased towards areas where data is most readily available;

·       Assessments can often simplify the impact of a disruption into linear cause-effect models. In reality, any system contains a wide range of interrelated reinforcing and balancing feedback loops that will ultimately determine impacts. Where possible such feedback loops should be identified and considered in analysis; and

·       Many impact assessments are static documents – estimating impacts at a given time based upon available data. These reports are inherently less valuable than systems that allow for ongoing testing and refinement of impact assessment over time.  

• Are we perpetuating undesired behaviour?
• Are we inducing further undesired behaviour?
• Is further consumption the end goal?
• Will behaviours change anyway?
• By limiting scarcity are we inhibiting investment (by diminishing potential returns)?
• By limiting scarcity are we inhibiting innovation?
• What messages are we sending to markets?
• What messages are we sending to our communities? 

Questions worthy of examination?

Opportunities will vary depending on the context of a particular region, community, economy or enterprise, but any strategy or decision-making framework that doesn't at least consider how to identify, accommodate and embrace the changes coming is misguided and very very dangerous!   

Permalink

]]>Developing conditions for innovationBrain FoodResourcesJason McFarlaneTue, 24 Jan 2017 08:02:52 +0000https://farlane.com.au/brainfood/building-better-regions-fund-opportunities-for-infrastructure-and-community-investment56c6c5b8ab48de588bfff3c8:56c6ca349f72661d8c539ff6:5887093ae3df2843ced41f7b
The Federal Government's $297.7m Building Better Regions Fund is now open for infrastructure and community investments in projects outside of the major capital cities of Sydney, Melbourne, Brisbane, Perth, Adelaide and Canberra. This funding program seeks to "create jobs, drive economic growth and build stronger regional communities into the future".
Both streams apply a rigorous evidence-based approach to the assessment of projects across four key criteria:

• Economic benefit
• Social benefit
• Value for money 
• Project delivery

This means that, to be competitive, projects will need to be carefully scoped to reflect the priorities and criteria of the fund, with impacts representing a compelling case against national competition.  

As previously observed, compelling investment opportunities present a strong narrative across three core elements (project champions, value creation, and deal structure). These elements must each be considered if the BBRF assessment criteria are to be successfully addressed. This includes answering key questions in each area including: 

Project Champions

• Who are the individuals and entities driving the project? projects driven by multiple stakeholders are more likely to attract funds
• What history do the champions have in delivering similar projects? funders hate having to take money back because of poor project management
• How committed are project champions? funders want to see skin in the game

Value Creation

• What rigorous evidence shows the socio-economic impact of the project? Is this based upon best practice analysis based upon best available data? stronger the evidence that matches criteria, stronger the case
• How does this build on existing successes? projects that leverage existing activities are compelling
• Are there added benefits to government? does the project support other government programs
• How guaranteed are the impacts? risks need to be openly recognised and managed

Deal Structure

• Is there co-investment from other parties? does the investment by the BBRF unlock further investment beyond co-funding requirements
• Where is the exit for government? funders hate being locked into further ongoing expenditure - they want to invest and exit
• Is the project self-sustaining? there must be a compelling plan for covering ongoing operating costs

FAR Lane is well placed to support organisations in the development of their BBRF business cases.   If you have a high-impact project that will make a lasting difference to your community, we would love to hear from you.
Contact Jason on 0412 836 147 for a free review of your project.

The Powerful Pitching Model

Strong projects almost always reflect deep consideration of each element, despite often dealing with each differently - reflecting the characteristics of the venture and specific interests of the investor.  In doing so they answer a range questions from the perspective of the investor including considerations such as:

Project champions

·        Who is going to drive this venture?

·        How qualified and committed are they?

·        What do the project champions uniquely bring to the venture?

·        Where are there gaps in the team that need to be addressed?

Value Creation

·        How does/will the venture create sustained value?

·        What impact will the investment have on the venture's ability to create further value?

·        How will this value be realised?

·        What return will the investor potentially realise from this value creation?

Deal Structure

·        What is being asked for, and what is being offered in return?

·        How will the investor be able to realise the value created?

·        How will the investor exit the venture?

 A recent (and perhaps late) realisation of mine is that these elements are relevant right across the investment space, from public sector investment agencies to venture capitalists investing in start-ups. The table below describes some considerations around each element for three broad investment classes; venture capital, banks and public sector agencies.

Same Elements - Different Focus

At FAR Lane we use this simple model as a basis for a common language between the ventures and the investors.  This supports ventures, including start-ups, growth enterprises and public infrastructure projects, in developing investor-oriented project pitches/business plans and/or business cases. It also supports investors by providing a concise framework to filter and assess ventures against their own individual investment criteria.  

Finally, this model has been informative in the development of economic development strategies that are seeking to deliver real benefit to communities as it facilitates conversations as to where opportunities for intervention may best match the expectations of the investment community.

It was a privilege to witness such a level of energy and engagement around Mid West ventures during the event, and in the conversations that have since followed. Already discussions are being had between ventures, mentors and investors in areas including energy, social enterprise, food production and marine conservation (and that's just what was personally witnessed).

An event like the Showcase, that focussed exclusively on developing and linking investible opportunities, provides the conditions required for mutually beneficial relationships to develop. These are a precursor to investment in ventures that already themselves are invested in the local economy. Alone individual ventures may not make much of a difference...but when skilled, motivated and aligned - together they will have a hell of an impact.

Based upon the Showcase experience, I can only reflect that this is what is often missing from the economic development landscape. Sure analysis, infrastructure, public relations and strategy is important, but so is linking local innovators with fellow entrepreneurs and motivated investors from afar.

A huge thank you to the various supporters of the Showcase and Groundswell (the program that supported ventures in the leadup to the event).  This list is extensive but particular kudos to the Greater Geraldton Growth Plan Partnership (City of Greater Geraldton, MWDC and Localise), the US Consulate, West Tech Fest, Iluka and RDA Mid West Gascoyne.   A shout-out also to the team that pulled it together including Pollinators, 32 Degrees South, GCP Capital and the Growth Plan Partnership crew. Awesome job all!

Finally and most critically, thanks to all who attended the day either as a venture, mentor/investor, infrastructure provider or as an engaged observer.  Days like these are rare and it was a pleasure sharing it with you all.  What comes next will be amazing. 

The RAC Intellibus is the first trial of self-driving bus technology run in Australia. The fully automated bus follows a 15-minute circuit along the South Perth foreshore, carrying up to 12 members of the public along for the ride.

The RAC openly acknowledge that they have invested in bringing the bus to Australia to expose the public (and policy makers) to the coming technology, and to facilitate discussion and debate as to how best we can prepare for and take advantage of such change.  

"Today, we drive our cars but in the future, our cars will drive us. Are we prepared for self-driving vehicles? What are the benefits, risks, and issues?"

http://intellibus.rac.com.au/considering-the-future

Full credit to the RAC for this. The experience is engaging and thought provoking.  The hosts are enthusiastic and knowledgeable, and the bus itself is remarkable. My 7-year old daughter and I walked away discussing what self-driving vehicles might mean for us (Layne's rather relieved that she may never need a drivers licence), and where the tech may go next (daddy's still dreaming of flying cars).

I can't help thinking that this experiential model is needed to facilitate engagement with a range of other existing/coming disruptions including:

• Impacts of climate change  
• Density in housing
• Drone-logistics
• Genetically modified foods/medicine 

Institutions such as Scitech and the Australian Urban Design Research Centre (AUDRC) have been doing this sort of thing for years...but not at the scale and publicity of this trial.  It takes an well resourced and invested stakeholder such as the RAC to take it on - and good on them for doing it!   Who will step up for other coming challenges?

A significant challenge associated with delivery of essential social infrastructure (such as affordable housing and residential aged care) is that, in many circumstances, market solutions are next to impossible to achieve despite substantial community demand. 

The Urban Institute and National Housing Conference has created a fantastic game to explore this challenge in the context of affordable housing.  Players assume the role of a developer of rental affordable apartments, with the ability to influence major variables impacting upon supply of affordable rental housing in the Denver area from a range of perspectives including:

• Rental affordability for residents;
• Profitability for you the developer; and
• Costs to the public purse

I have tried a heap of different scenarios and have failed miserably...give it a crack.

Insights from this great exercise are relevant to many cases where competing priorities for public good are present.  So often the outcome is blame shifting between industry and public agencies - leading to continuation of the status quo. Needs of the most vulnerable are not met because markets cannot provide solutions, and public agencies cannot change the parameters of markets.  The math of finance, investment, development and asset management does not add up and a circuit breaker is required.  

If we want to create an innovative culture for the betterment of our communities, challenges such as these are a great place to start.

 Meet Amelia. Marketed by her developers as “your first digital employee”, Amelia is a “cognitive agent” who, according to McKinsey;

 “…already understands, interacts, and—crucially—learns in order to solve customers’ problems in industries from financial services to telecommunications. They can parse natural language and independently determine which questions to ask in order to diagnose what the customer really needs and act accordingly.”

24 hours a day….without coffee!

Amelia, and her AI brethren represent a more nuanced approach to customer service automation than the rather clunky solutions that we are all familiar with (“item removed from bagging area” rage must be a real thing by now).  They actively anticipate and solve problems, and adapt strategies based upon immediate feedback from customers. They also are a very efficient conduit for continuous data collection, analysis and reporting.

Our future, and the future of our kid’s jobs will depend on our ability to work with, and add value to the likes of Amelia. She is here and she won’t be going away. McKinsey again;

“By 2020, customers will manage 85 percent of their relationship with an enterprise without interacting with a human, and 40 percent of sales activities could be automated using technology that already exists.”

Industries and professions need to consider how they can work with Amelia and leverage her capabilities to their benefit. Those that don’t, or won’t, will not just be left behind – they will be superseded by a workforce that is smarter, more agile and far better at office footy tipping than we can ever hope to be.

[1] ABS Australian Labour Force February 2016

This is the first in a series of interviews  exploring some ideas around transformative change, how it occurs, and how it is examined from a range of different perspectives. 

I hope you enjoy our conversation.  Apologies for the audio quality in parts.  Its our first time doing one of these and we have learnt a heap..but hopefully the outcome is as interesting for you as it was for me in having a chat with Ruth.

In recent days political debate has again focussed on growth in regional centres, with Premier Colin Barnett (Liberals) and Mark McGowan (Labor) both putting forward alternative arguments, ambitions and solutions. The Planning Institute of Australia has also waded in, arguing that an interventionist approach to regional centre development is unlikely to succeed—at least without a very significant investment.

Having been immersed in a number of public and private projects with a focus on the development of major regional centres, I have had the opportunity to research and consider the challenges and solutions being offered in this space**.  Through many conversations and much digging about in analysis and case studies (including some great recent insights from Ifor Ffowcs-Williams from Cluster Navigators), it has become clear to me that three precursors are required for sustainable, resilient and vibrant regional growth centres. These are:

• Livability — a place that is appealing to a wide range of residents to invest in, and live within throughout their lives.
• Be “bloody” good at something that other people want (thanks, Ifor) — demonstrably play a role in the creation and/or transfer of goods and services that are of value to external markets. 
• Local champions — advocates of change that actively invest time, resources, networks and political capital in driving change (extending beyond government employees paid to advocate for change).

These elements are the foundations upon which sustained centre growth can occur. They are not the be all and end all. Instead they create an environment around which interventions can be developed, either by strengthening or building upon these foundations. 

Likewise, these precursors are a useful basis for assessment of political policies and promises in the lead-up to the election....e.g.

• Are promises and policies focussed on centres where these factors exist, or are likely to exist into the future? 
• Do the State agencies to be relocated build on what a regional centre is already ‘blood good at'?

*For a great historic perspective on water’s influence on the development of regional centres, I highly recommend Dr Ruth Morgan’s Running Out.

**It is important to differentiate regional centre growth from regional economic development. There are many examples of successful economic development within regional areas that have not required sustained population growth of regional centres.  

The vision is for an integrated food precinct in the upper Pallus Plain in the Peel region.  Until recently this land had been assumed to eventually turn into suburban housing. It is now considered inappropriate for urban development - with an opportunity to instead develop an economic asset for the State.  The  precinct has the potential to develop into an export-focused peri-urban food precinct that integrates stormwater treatment and storage, with horticulture, genetic research, and secondary food processing.

The upper Pallus Plain is characterised by:

·       The largest remaining land parcels in the southern greater Perth corridor

·       Degraded soils 

·       High water table that flushes significant quantities of stormwater into the Peel Inlet annually.  This water has high levels of particulates and agri-chemicals contributing to the degradation of the inlet (WA’s chief scientist recently stated that the inlet is in danger of ecological collapse)

·       Close proximity to infrastructure and workforce

·       Disconnection from existing service infrastructure

Over the last 4-years a dedicated team led by the Peel Development Commission (with support by enterprises including Pracsys and GHD) developed a three-pronged project that focused on de-risking future investment by local and international parties. The three prongs of the project are:

Integrated water initiative that includes activities such as:

·       Research and mapping of superficial and deep aquifer water resources

·       Stormwater capture, treatment, storage and transmission

·       Soil augmentation and drain upgrades

·       Linkages with legacy industries, in particular Alcoa’s activities in Pinjarra and Waroona

Food Zone development that includes activities such as:

·       Development of an internationally recognised food genetics research facility 

·       Pilot projects focusing on proving the commerciality of out-of-soil, closed loop horticulture initiatives 

·       Development of integrated planning systems to anticipate project needs and mitigate environmental challenges

Peel Business Park that includes activities such as:

·       Off-grid technologies including solar thermal, biomass and onsite waste water treatment that feed into industrial food processes

·       Integrated production precinct including abattoirs, composting and secondary food production (e.g. noodle manufacturing) that utilise industrial ecology principals (waste outputs inputs into other processes)

·       Integration into other complementary industrial processes

·       Workforce training

It’s a big project but I believe it actually is the first stage in a much bigger opportunity to develop a continuous intensive food production precinct that extends from Peel through to Busselton (think southern Spain).   If we are to develop a diverse, export-oriented economy for the next century, food represents a massive opportunity – we have the land and climate.  We just need to link it with smart operators, savvy regulators and targeted capital.  

Drones might be noisy, they potentially invade privacy, they may be a nuisance, or even used to perpetrate evil deeds; but if they are proven to be useful and even beautiful - we will forgive them (not too dissimilar to the step change that mobile phones took with the introduction of the iPhone in the relatively recent past).

Big Hairy Prediction: Popular acceptance of the arrival of the age of the drones wont be smooth. We are already seeing regulation struggling to adapt to the challenges of new technology.  Its almost inevitable that a noise-related syndrome or two will follow, as well as public outrage over a range of nefarious uses.  The tide will turn when a clever technologist combines the functionality of the technology with great design that captures the public's imagination.  

Given Jason’s recent focus on regional centres, we decided to build a basic dashboard to explore the characteristics of employed residents in each region of Western Australia. We hope that this may be of interest both to general purveyors of data, but also to those currently embedded the regional centres planning process being undertaken in Western Australia. Please feel free use and break the model as you see fit. I would appreciate any feedback and suggestions for further topics of interest.

We think that this platform has a great deal of potential to better inform decision-makers by facilitating self discovery through an intuitive interface.  

This sample model explores interrelationships between the age of residents, the types of industries that they are employed in, and the types of roles that they play within these industries.  This allows decision-makers to identify specific population cohorts that may be of interest, and develop targeted specific initiatives to attract or retain these groups.

Big Hairy Prediction:

Historically analysts have been required to spend a disproportionate amount of time reporting data. The ubiquitousness of reporting solutions such as Power BI and Tableau will free analysts to devote more time to analysis and solution design.