America’s Greece(s)

In summing up the situation in Europe, the APM’s Marketplace show today made an interesting point: while the US and the EU both have a Monetary union, only the US has a Fiscal union – in short, the Federal Govt in the US raises taxes from all over the country, and then distributes them in ways that involves a transfer of income from one state to another.

It got me wondering – which states are America’s Greece(s)? While the situation with Puerto Rico is in the news right now because of their unsustainable debt burden (making them more like Greece to be fair), I got to thinking – which states are “givers” and which states are “takers” on an income and expense perspective.

To answer this question there is a great Wikipedia page which lays out the data from the IRS against the data of US Federal Government spending by State.

The problem was, the data dealt in raw numbers of millions taxed and spent, and while it also included ratios based on Gross State Product (GSP), but I was really interested in the per-capita net tax or subsidy state by state. So, combining the data from a few of these sources, I put together the per-capita numbers.

The results were really interesting, including:

  • The average person in North Dakota has the most amount spent per person ($77,040) by the Federal Govt. I don’t know whether this is farm subsidies (I’m told their crop insurance pays out even if they don’t bother planting), or if it is the result of a lot of money spent manning missile silos, but either way it is pretty breathtaking. Their fairly small revenue per person means each human in North Dakota costs the rest of America $66,782 per year (on average).
  • The average person in Utah has the least amount spent per person ($4,573) by the Federal Govt. That’s pretty impressive, and they’re followed not so far behind by Kansas and Nevada – so when those voters in these red states vote Republican and claim they want small government, they’re not being hypocritical.
  • Washington DC has the highest per-capita paid per person ($40,117), and the second highest spending per person ($40,296). This makes sense since there isn’t a “state” in the middle taxing or spending, but it is interesting the folks who write the rules pay themselves well out (often out of the Federal budget) and manage to get back just a little more than they spend.
  • The Carolina’s are very different fiscally – while they’re southern neighbors, North Carolina is a net contributor ($1,260 per person per year) whereas South Carolina is the second biggest taker from everyone else in America with a net receipt of $10,518 per person per year.
  • When it comes to Federal tax receipts, the poorest state in the Union is Mississippi ($3,678 per person), followed by West Virginia ($3,721 per person), with New Mexico ($4,199) the only state in the top 5 not from “the South” (#4 is South Carolina at $4,603 and #5 is Alabama at $4,906).
  • Former manufacturing-heavy states with “Rust Belt” populations make up a third of the top 9 biggest deficit states (#4 Indiana, #7 Wisconsin and #8 Pennsylvania).

While the climate isn’t nearly as nice, there’s a serious shortage of islands and no sea, without these heavy fiscal transfers, North Dakota would be America’s Greece.



Got other observations from the data? Would love to read them in the comments!

Wollongong’s Wonderful Renewal

TL;DR: my hometown has been a depressed and despairing place for all my life, yet on my most recent visit I was struck – truly struck – how much the city has changed for the better. It was breathtaking. This post is a reflection on my hometown’s history over the last three and a half decades (to get a sense of how far we fell behind) and some observations about what’s really working to turn the place around, creating an incredibly bright future.

Opening celebrations for the new Wollongong Central project. Photo: Robert Peet, Illawarra Mercury

The centre of Wollongong coming back to life. Photo: Robert Peet, Illawarra Mercury

Update: looks like this post has touched a chord – more info on the response in this separate post.

I’m writing this on a layover in Auckland flying back to San Francisco from one of my quarterly trips to Wollongong, my home town, located an hour south of Sydney. With more than half of the AffinityLive team based in our Wollongong engineering office, I make sure to get back to spend quality time with the team every few months – especially given the growth in our Australian team (up 150% in the last year).

Returning to visit my home town every few months – spending time with mum and staying in the house where I grew up – has given me a really interesting perspective to observe the changes happening in Wollongong. Like when you catch up with distant family members or friends with kids only occasionally, being an infrequent observer helps you see starkly the changes every-day observers see only gradually. Unlike kids who are “getting so big” and “growing up so fast”, a city can be getting noticeably better, or worse.

Noticing changes in our hometowns when we return isn’t anything unique or unusual of course – it happens to any of us who’ve moved away when we come back for a visit. When I notice the changes in Wollongong, though, I’m looking with more than the usual sense of nostalgia.

A Decade of Regional Development Efforts

For more than 10 years, through my early 20’s to early 30’s, I was involved in civic activities to try and make the city a bit less dark, dreary and depressing. On the civic front, this included being a foundation board member at RDA Illawarra (like a regional council/county) and a board member of the Wollongong Hawks (our national basketball league team). On a professional/technology front, this included co-founding (if that’s the right word) initiatives like StartPad (precursor to iAccelerate), ICTI and Digital Wollongong. All told, I’m guessing I spent around 2500-3000 hours working voluntarily to improve the prospects for employment, liveability, and the economy of Wollongong.

Like many hard(er) working champions of Wollongong, I toiled away because I believed in the potential of the city: the incredible human capital in the thousands of smart, educated people graduating from the University of Wollongong, the amazing natural environment with our mountains and beaches, and our close proximity to Sydney (and all that this overpriced, congested, global city offers).

But, while it was rarely discussed among those of us championing the city, I also knew deep down how dark and depressing the situation in the city was. Staying upbeat and positive in the face of a depressing reality is OK in short bursts, but trying to keep it up indefinitely will send anyone crazy eventually. And there were a lot of us showing crazy cracks.

Structural Suffering & Depression

Born in the last 100 days of the 1970’s, I’d never known my home town to be prosperous or successful.

As a city dependent on steel manufacturing and coal mining, the 80’s were particularly brutal to Wollongong. Technology and international competition reduced the steelmaking workforce by 80% (from almost 29,000 employees in the late 1970’s to 6,000 in 1996). By the middle of the 1980’s, a collapse in the price of coal meant the higher-cost underground coal mining industry couldn’t extract coal profitably competing with cheaper open-cut methods, causing numerous mines to completely close.


The knock-on effects outside these direct employers – transport, maintenance, equipment etc – were massive hits on a region with a population of 200,000 people. Port Kembla, once a bustling town, effectively died (except for the prostitution).

When I was studying economics in high school, Wollongong’s unemployment rate was 5 percentage points higher than the national rate, and things were much worse for young people. Many of the “blue collar” jobs our newly retrenched locals had the skills to fill didn’t exist in the country, much less the city.

Social Disadvantage and Despair

In addition to this “structural unemployment” caused by major industry decline, the other big challenge was/is the massive-scale “social housing” developments (in the US they’re called “projects”) built in the north and south of the city in the 1950’s. The consequence is that the city has tens of thousands of disadvantaged people, many of whom didn’t count in the unemployment statistics because they didn’t bother looking for work (either because they believed it wasn’t out there or they were content to eek out an existence on welfare payments and/or less legitimate means). Not looking for work means a lower “labour force participation rate” – Wollongong residents were 15% more likely to be part of this “hidden unemployed” than the Australian average (Wollongong at 56.2%; Australia at 64.6%).

If the fifteen years to the middle of the 90’s were tough, things didn’t get better with the boom Australia experienced over the next decade: instead of catching up from a rough period, Wollongong fell even further behind. From 1996 to 2006, job growth in the Wollongong area was barely half that of the rest of Australia (Youth Unemployment in Australia, Burrows, 2009, page 5).

In summary, you had a place that had been mauled by structural change, had a much greater than average number of people who’d “dropped out” of the economy (at least) – a pretty poor situation to then get hit with “the recession we had to have” in the early 90’s.

If this wasn’t bad enough, when things turned good with the longest expansion since WWII for the rest of the country, Wollongong was instead just slowly staggering forward, creating jobs at half the rate of the rest of the country.

Dark Clouds & Self Delusion

The collective effect of all of this was an often dark, despairing cloud hanging over the spirit of the city. That the only “feel good” leader of the city I can remember was later found to be a paedophile (and murdered “Primal Fear” style) is as damning as it sounds. Other leaders like my friend David Campbell mainly tried to minimize harm and manage the situation, while many other “leaders” who were just in it for themselves and their crooked mates held the city back. Given the politics of the region (very safe seat requiring no electoral benefit for any government to give a shit about), even if there was a credible government turnaround plan based on leadership and investment, there wasn’t the political willingness to fund it, much less leadership to lead it.

While the city still had all of its natural beauty, you could see why Wollongong was sneered at and looked down upon by most other Australians.

Efforts to change perceptions, while well meaning, stood no real chance of lasting success because they projected fiction, not reality (locals will remember the “Image Campaign” and the ‘we all know it’s bullshit’ tagline “City of Innovation”).

To illustrate, imagine the experience of a visitor who’d caught the train to Wollongong; they’d have to navigate crowds of bogans, junkies and petty crims, run the gauntlet of western Crown St and the dark and violent mall (see video below), pass the eyesore of the entertainment centre, to finally make it to the beauty of the beach and Flagstaff Hill.

Don Draper couldn’t market our way out of that reality. The fact we tried is testament to our tenacity and belief in the potential of the city.

First Signs of Promise

I remember being involved in a project in 2006 called the “Wollongong City Centre Revitalization Strategy“. It was spearheaded by the state Department of Planning under Frank Sartor, and a special agency was set up, headed by the impressive and energetic Chris Johnson to develop plans for half a dozen cities in the state. Wollongong was the first to get the treatment (probably because it needed it most), and I was one of the committee members providing input and reviewing the ideas/research coming out of the Department of Planning and the Office of the Government Architect.

For as long as I could remember, ideas to improve the city’s situation were vested in “projects”, most of which were little more than thought bubbles. There was the project to install a gondola, Cairns-style, to the top of Mt Keira to boost tourism. There was the project to build a boardwalk, Atlantic-City-style into the Pacific ocean off City Beach. There were innumerable individual property development projects, all of which needed to get a planning exception approved by Council because the City’s land-use plan was a few decades out of date and anything of any significance height or size wise was impermissible. Some of the projects worked out well – Innovation Campus – and others were massive mistakes that will rob the city of potential for generations (building the windowless Entertainment centre and rebuilding a barely used Stadium on prime beach-front land are right up there).

The City Centre Revitalization plan was different. Rather than focus on a specific issue (or two), it identified a series of a dozen that the city could do to revitalize the city centre. The plan applied research and best practices from around the world (Wollongong certainly wasn’t the first city to find itself in a depressive downward spiral). Some of them were needlessly controversial (build higher density and really tall buildings around transport infrastructure like the station – oh no, tall buildings must be evil!?!). Some of them were more aspirational, and others were just common sense (yet the fact they still had many detractors showed how there is an inverse correlation between the spare time some people have to complain and their actual levels of common sense).


The strange thing about the process was just how obvious and sensible the whole thing was: identify the problems, create a series of complementary visions to address them, and then change planning controls and policies to encourage them. Some inspired decisions by government (the free Green Bus) played their part, but on the whole it was about setting the system up (with better, modern rules and incentives) so the economic energy of the private sector could turn high level visions into concrete reality. The community’s role in helping shape the plan was at the planning stage, not the implementation stage – instead of arguing about building X or traffic change Y, the high-level blueprint right at the beginning was the focus of input. Of course, community participation was fairly poor (less than 1% of the city’s population made a submissions), but from what I’m told by people who do this sort of consultation for a living, the website we built and the town-hall meetings we held resulted in about 5x the normal amount of participation than this sort of thing normally gets.

The main pieces of the vision, after debate and dilution (opening the mall to slow moving traffic outside core shopping hours and bonus building height (or FSR) rules for buildings subject to design competitions being the two I most regret seeing sidelined), the rules were codified as a new Local Environment Plan (LEP – the legal document that outlines what can and can’t be built by “zone”) by early 2007. The stage was set, but then things appeared to make a big turn for the worst.

Darkest Before the Dawn

As they say, if you want things to change, you’ve got to change things. However, changing things on a city scale is a pretty capital intensive undertaking. Building new buildings, upgrading transport, roadworks and other cityscape improvements aren’t cheap, fast or easy. With most of the things needing to change in the city being privately owned property, it also wasn’t something you could mandate top-down – the private sector needs to want to change, want to invest.

All of this was going to be tough, a long game. Then two things happened – the city became embroiled in its largest ever corruption scandal (March 2008), and then not long after that the global financial crisis hit (Lehman Bros collapsed in September 2008, freezing credit markets globally).

The ICAC investigation into the corruption in the Wollongong planning and approvals department was dynamite – many locals knew of stories of corruption through shadowy networks that operated with such perceived impunity that they didn’t even bother trying to hide their behaviour, but to have secret recordings and explosive evidence that touched all three boxes of money, sex and power was a massive shock to even the most cynical resident.

From daily “table of knowledge” meeting in broad daylight outside a beachside “cafe”, to special assignments of project assessments to ensure the bad eggs could operate with official cover but no oversight, and then finally the dirty money and sex that bound the whole thing together, the whole thing was an epic and embarrassing drama carried extensively by the national media. The effect was to reinforce a reputation of the city as being full to the brim of the kind of sketchy, moronic mafioso that outsiders already associated the place with.

It felt like a body blow, and undid any achievements of the “image campaign” from outside the city. Trying to run a business with clients in Sydney and Canberra from Wollongong was nigh-on impossible – the entire city was tarred with the brush of these corrupt criminals.

Following the ICAC investigation, the city thankfully got the cleanout and fresh start it desperately needed from a governance and leadership perspective. All of the Councillors were sacked and replaced by administrators from outside the region. A new General Manager was appointed, and the newly instated rules around projects that came out of the City Centre Revitalization Strategy (and other improvements outside the city centre) gave the defined planning rules their first real upgrade in decades, clearing the path for a series of new projects not facilitated by case-by-case deal making.

On the economic front, changes in the costs of finance meant barely viable projects approved under the old regime (Belmorgan anyone?) started biting the dust before they’d done much more than acquire and consolidate land parcels.

The Great GPT Gamble

In an incredibly fortunate piece of great timing, the city’s largest property developer/operator, the listed GPT Property Group, had to make a decision about dramatically upgrading their shopping precinct in the city. One of the big hold-ups of such a decision – budgeted at $200 million – was whether competitive developments were going to spring up leading to an oversupply in large format retail and entertainment space – no one wants an expensive white elephant. With the looming financial crisis sinking competitive projects like the Dwyers site redevelopment, GPT had the balance sheet and access to funds to back the massive new Crown Central development.

In one of the most critical decisions for the city in many years, and with a freshly cleaned out council executive overseen by outsiders with a focus on pragmatism over parochial politics, the massive project to remake 15% of the city core in one go was approved by the GPT board in Melbourne in 2010. Two years after it had been approved by Council but put on ice by GPT because of the financial crisis, the project was now a go. The decision was even more brave given what happened 12 months later: the steelworks shut down its export business and lost another 1000 jobs.

At the time of GPTs decision (late 2010), it really wasn’t clear (in my mind at least) what the significance of the project to the city would be. With the move to online shopping, and regional centres with closer proximity to suburbs and easier parking getting $300 million dollar injections at the same time, focusing more of the city on retail seemed questionable at best. Thankfully though, GPT’s focus was as much on hospitality and entertainment as retail – a massive win for livability in the city.

When combined with the City tearing out of the disgraceful “bird cage”, the crapitheatre and a lot of the seating in the old mall (city tested, bogan/junkie approved) these two parts of the vision from 2005 have come together to dramatically reshape the city.

Similarly, a number of residential projects – with ground-level retail/restaurant activation – have taken advantage of the new “baked in” development rights from the 2006 vision’s upgrade to the planning codes has created a boom in inner-city residential development; today we see thousands of people actually living in the city core, giving it life after dark, a trend that shows no sign of slowing down.

Of course, both projects have taken their time, and it is only now in 2015 that the dividends are really paying off. These dividends – more competition, more choices, more quality, more food/cafes, less straight retail – are self-evident for anyone, but it is the change in the city culture and vibe that has the most appeal and makes me most excited.

More Buskers & Baristas and Less Bogans

By the start of 2015, the transformation was clear for anyone to see, and it was awesome.

From a practical point of view, the addition of Coles to the city centre has made it much more convenient to get stuff for the office or wander over at lunch time to grab some groceries for dinner – working in the city centre is now really really desirable.

But while utilities like Coles and Target help with convenience, it is the proliferation of places to eat and drink (combined with the new small-bar laws creating establishments you can go to without a real fear of being punched or glassed by an aggressive bogan) that has really made the difference.

The city centre is now a place you want to be.

On Thursday night I walked through the western end of the mall, and you could have knocked me over with a feather. A dozen or more of the city’s better restaurants had shown up and created pop-up take away dining experiences – for my American friends, imagine food trucks without the need for big trucks. The city was absolutely buzzing, with a singer-guitarist putting on a show, and in other parts of the mall there were other talented buskers doing their thing. The experience repeated (with differences in vendors) on Friday with the popular farmer’s markets through the mall. Walking through the stores was great too: there were plenty of shoppers; the place was packed. People were smiling and enjoying being together with strangers in a public space.

The differences to a similar shopping experience from a few years earlier couldn’t have been more stark. On a normal Thursday night at 7pm, the mall would be full of hood-rats who’d come in on the train as packs and acting like wannabe-gangbangers, sitting around, leering and screaming at each other across the mall. No one was happy – it was the depression and darkness of the city’s psyche manifest in hundreds of bogans and junkies just existing. Early in the evening they generally kept to themselves, but by 10pm the mall became a fairly dangerous place to be, with numerous bashings occurring almost every weekend (see video above).

The best thing about the changes in the centre of the city over the last few years is the effect it has had on social norms. Now there’s more buskers, baristas and cocktail barmen in the city centre than bogans yelling “fark off ya caaaant” while they suck back another pack of Winfield Blues. This doesn’t mean the city isn’t open, welcome and inclusive – it just means that expectations of behaviour and a default attitude is now a positive, aspirational and friendly one rather than a dark dog-eat-dog mindset of the depressed and despondent.

A sense of community has returned – and it is wonderful.

The Reinforcing Loop

The great thing about this amazing transformation is that is creates a positive feedback loop. With the city centre being enjoyable (for the first time in my life at least), people who visit will visit more often. They’ll look to rent or buy apartments in the city (rather than fearing the occasional necessary visit), and spend even more time in the city.

With more regular people enjoying the city each day/week, the social attitude of the city is changing. Bogans become just another part of the city’s colourful tapestry rather than the dominant negative force dragging the place down and scaring other people away.

People want to be in Wollongong, which brings more people who aren’t in the depressed and disadvantaged category, which normalises the mix of the city and lifts the experience for everyone (including the bogans, and more importantly their kids who stand a better chance of breaking the intergenerational welfare/poverty cycle if they see things and people they’d like to emulate).

This means as more people visit or move to the city (and the University brings in over 10,000 new non-bogan people every year) and really, truly enjoy being there, they stay and bring their friends in too. Instead of an “Image Campaign” telling stories of barely evident aspirations through an inadequate marketing budget, the city starts marketing itself through the tens of thousands of people who now truly do love the place.

With these people come the opportunities for more jobs and higher incomes in the city. Attempts to bring in outside employers to create jobs were usually doomed to fail by the fact that no-one from outside Wollongong really wanted to move here, something that is rapidly being solved. Additionally, a vibrant and enjoyable city means more young people graduating university are likely to hang around and try to create their own jobs through entrepreneurial ventures – Wollongong’s lower cost of living, proximity to Sydney Airport and plentiful supply of smart people coming out of the University makes it a very legitimate place to start a global venture – AffinityLive is testament to that.

While only a small and anecdotal statistic, more than half of our new hires this year are people who want to come back to Wollongong from Sydney or Melbourne – not because they have a sense of obligation to be close to aging family members, but because life in all its dimensions is so much better than dealing with Sydney’s “let’s stop trying to make the city better now the Olympics is over” traffic and transport disasters.

For the first time in my life, my home town is actually on the front foot and you can feel the city is finally on track to realize its incredible potential.

The Future

Thinking about the future, the main thing is to keep doing more of the same. This means more buildings and development, particularly in the city centre, with higher densities and heights so new housing supply is as affordable as possible and ensures these new investments in making the city livable – which depend on shoppers, diners and guests to succeed financially – have the number of patrons they need to flourish.

Similarly, the success of the Wollongong city core can and should be replicated across other regional cities. Thirroul, Corrimal, Figtree, Dapto and Port Kembla would do well to follow the lead of Wollongong City: setting clear, generous rules around building heights and densities to encourage more people to actually live, rather than occasionally shop, in them.

There’s also a number of parts of the city that have been left out of the revitalization so far, rotting and decaying. The prime example that comes to mind is Wollongong Harbour. With its sorry and barely-used fishing fleet, asbestos filled shed on the central pier, this generally under-used and under-loved focal point of the city has a lot of potential. Some work that I was involved in in 2009 outlined some ideas about unlocking the potential of this amazing space, included in the Wollongong Harbour Consultative Committee Report – it would be awesome to see the same renewal we’ve seen in the city centre happen here.

Of course, encouraging building and residential development is all well and good, but people still need to be able to find and keep quality jobs.

Part of this will come organically as the city continues to be more desirable as a place to live, visit and thus work and companies come to the city because of the talented people here, not because of a supply of cheap, unskilled and unemployed labour.

Another part of it will happen through startups and entrepreneurial effort creating new opportunities from the city, for its residents, with customers predominantly from outside the region – hooking onto the success stories we have and investing in the next wave of entrepreneurs will also be critical to success.


The city has a long way to go to realize its potential, but the most exciting thing is that it seems well on the way to achieving it, underpinned by strong fundamentals of strong human capital and a great living environment (in both the built and natural form).

If we can just keep this momentum going and rightly celebrate our successes so far, this current phase of “the brightest the city has ever been” will be a phase we look back on and smile as only the beginning.

WFT America?!?

How is it that the world’s most prominent democracy is so incredibly bad at being, well, a democracy?

8 years ago I looked on from Australia in shock with the rest of the world as America re-elected the least competent and most destructive person to sit in the Whitehouse, since, probably ever. After feeling a strong sense of empathy post 9/11, I joined with the rest of the world in thinking in 2004, “well, you voted for this moron again – you made your bed, so lie in it”.

4 years ago I looked on from Australia – this time having spent a bit of time living in the US – with a sense of pride and hope that the mistakes of 8 years earlier which clearly set American and the free world back almost a decade could be righted. And the American voting public delivered in spades, but as we all know, the damage had been done. Obama promised change, but in retrospect he should have promised harm minimization. The last 4 years hasn’t been pretty.

This year was different. I’ve been living in the US for a 15 months, paying taxes and being part of society here and while I’m a lot closer, I’m strangely more distant. This stuff now actually affects me on a daily basis, but I’m noticeably excluded as a non-citizen. The natural human response to rejection is to say “well, screw you too then electoral system that won’t have me – I’ll ignore you too”. I’ve been too busy to be a political junkie and anyway, this has to have been one of the least inspiring, un-visionary campaigns in memory. Better just to just tune out, especially when in our house we just stream TV (no political ads).

But the things you notice actually being here are really amazing. And disturbing. Seriously, America, what the fuck is going on with a nation that sees itself as the leading light of democracy and freedom?

Here’s a few real and jarring things I wouldn’t have appreciated if I hadn’t been here to see it for myself. These stand-out in a sea of things that wouldn’t be so hypocritical if this country hasn’t spent so much blood and treasure promoting democracy elsewhere in the world.

Touch-screen voting machines, but forget technology in voting.

So, there’s been a bit of a stir today about the voting machines that wouldn’t let you select Obama and instead defaulted to Romney. Amazing seeing life imitate art, but not super surprising.

Coming from little old Australia where we use paper and pencils to vote, I figured that America was just ahead of the curve, wrinkles, bugs and all.

Turns out: not so much.

One of my colleagues wanted to vote today; in a busy start-up, time is tight, but she was fine to head off and make sure her opinion counted any time she wanted to go.

With more than 2 hours until polls closed, I asked her if she needed to take off and she mentioned she’d already given up. “I’d have to head back to Berkeley where I’m registered from when I was in college last election if I want to vote, and there isn’t time now”.

Now, remember, this is a first world country. One that insists that citizens and even non-citizens get a unique Federal ID number so we can all be tracked and identified (the Social Security Number). What do you mean you can’t just go down to ANY POLLING PLACE IN THE COUNTRY, give your details and a photo ID, and vote? WFT America? Sarah was in the same state, but a different county, and unless she’d planned her time out more than a week in advance to ask for and return a postal absentee vote, she was locked out.

Even if you are prepared, voting can cost you $50 or more. Another friend who grew up in Boston wanted to vote. She asked for the absentee voting papers to be posted to her new place in California. The authorities got it here last Thursday. She filled them in and realized that she would have to pay $50 to make sure they would get back to Boston in time to count before the cut-off. WTF America? If people can vote on faulty machines, why can’t they vote online? Even if that is too hard, why the hell does a piece of paper need to be mailed overnight express to the other side of the country in a FEDERAL ELECTION?!?

4 hour waits to vote? It isn’t like today was unexpected!?!

So, the systems suck unless you never move and make sure your registered home address is a stones throw from where you actually live. OK, fine. But why are there 4+ hour lines to actually vote on a day they’ve known is coming for 4 years!?!

In Australia, I’ve waited no more than 20 minutes to vote in an election – ever. You rock up at the nearest school/library, you run the gauntlet of people trying to give you propaganda, you cross your name off the list (or go over to the out of town queue and cross it off a national database), and you vote. Done. Easy. Fast.

Instead here it seems the parties get to play special games. If you’re in a county/state controlled by the blue/red guys but you live in an area controlled by the opposite color, good luck.

Long queues, few booths, few election officials. Making it hard to vote and reduce turnout for the other guy is seen as a legitimate tactic. WFT America? I’m all for electoral and campaigning tactics, focus groups and marketing your message to give your team an advantage, but deliberately starving certain populations of resources to deny them the right to vote without standing in the sun/snow for 4 hours is bullshit. This isn’t about promoting/spinning a message. This is about taking away the rights of fellow citizens to vote in a democracy. In the memory every fallen American who died trying to bring democracy to Iraq/Afghanistan/Eastern Europe/South Korea/Vietnam, you should be ashamed of yourselves.

Branch stacking is nothing. Try population stacking.

From the outside, you might be wondering why there are so many elected nut-jobs in America. The short answer is because the way they carve up electorates / seats / districts encourages it.

In Australia, there’s a concept known as branch-stacking. Primaries (known as pre-selections down-under) are where a party chooses their person to stand as their candidate in the election.

In seats / districts that are tight (known as “swing” here), candidates are selected by their party because they’re the best – they’re respected, they have broad appeal and can work to represent all of their constituents.

In seats are safe (known as their color, red=republican, blue=democrat here), the battle isn’t for the public ballot – that is pretty much a sure thing. Instead, the battle is for the party base, which encourages nut jobs on the fringe. This happens in all representative democracies, but in the US it is a LOT worse.

Instead of having an independent umpire draw the lines on the map to say who is in what Seat / District, here they’re drawn (predominantly) by the party in power at the State level. They’re political in nature, and the result is frightening. If you’re a Democrat and you’re in power, and you know a particular part of your district votes Republican, you can change the boundaries so that those people are included in a different district, one that is more Republican. That way, you don’t need to keep them happy, and your seat / district is safer. Funnily enough, the other guys don’t usually mind – they also get to focus on preaching to the choir, rather than coming up with policies that make the county/state/country better.

This is how the Tea Party went from being a bunch of angry flat-earth types and became a political force. Ignorant, simplistic, selfish and deluded, instead of being marginalized as fringe outliers these crazy buggers rose to prominence by eating their own – incumbent Republicans – because they knew they just had to energize their own team by being more extreme than their Republican brothers. The Democrats have their own fair share of nutters too of course – the Tea Party have just done a better job of showing us how mad they are.

Growing up in Wollongong – the equivalent of a super blue safe seat for the Democrats – I got to see up close just how much of a cancer this one-sided electorate could be. Words like corrupt, incompetent and out of touch come to mind. Populated exclusively by candidates who are former union officials – the 2nd least trusted “profession” in Australia it was reported recently – the “safe” status of the Wollongong region has led to all sorts of dodgy back-room deals where the decisions about who gets to keep power have nothing to do with the people. This in turn has fostered a strong sense of neglect and mistrust in the electors – why be engaged when you know a corrupt and incompetent candidate is going to get re-elected to “represent” you anyway?

I’ve always felt this was the rotten heart of the city where I grew up and wish it wasn’t like that, but almost all of this country works this way – and not because of demography, but because of a false construction of elector districts.

Fucked up, rotten priorities

Sergey Brin was right. This system has forgotten what democracy is – it is just about the parties fighting each other and the public are just ways of tallying who’s winning and losing, while all of us lose.

If this system spent a fraction of the money they spend on lawyers on things like polling booths in independent redistricting commissions that they spend on TV commercials and lawyers to try and exclude the ability of others to vote, America would be in a much more legitimate position to take its place as a leading light of democracy.

Unfortunately, today, the electoral and representative landscape here place better represents something that rhymes with that: hypocrisy. WFT America?

Wollongong is on a burning platform

Over the last couple of years, I’ve been getting increasingly concerned about the future of our city. Leaving aside the rot exposed through the ICAC investigation, I’ve been mostly worried the future of the city from an economic perspective.

Are we going to be a place where our young people can build careers & families with confidence and a sense of optimistic opportunity?

Or are we going to increasingly be a hollowed out city, with a population that in large part commutes to Sydney for work, or lives off Centrelink, or comes here to to retire?

Are we going to be proud and strong, or are we going to be like Tasmania – a small backwater that everyone looks down upon and only survives because they suck in taxes paid by the rest of Australia living in large part off handouts?

My worries about the future of our city have grown even more acute over the last few months.

Our city has operated with a bit of a handicap in all 31 years I’ve lived here – the downsizing at the steelworks and in the broader manufacturing sector has been playing out since the 1970’s. But while we’ve stoically pushed forward over the years, I’m concerned that rather than just the disappointment of unfulfilled potential that we’ve learned to live with, we’re actually facing some very serious challenges that could threaten the viability of our city.

Our Two Fires – Carbon Pricing & Dutch Disease

In the short to medium term, there are two external forces, more than any others, that are affecting Australia’s entire economy.

The first is the transition to a carbon constrained economy, and while there might be debate around the details and timing of a carbon price, I think most people accept that reducing global dependence on carbon (ie, coal) as an energy source is inevitable.

The second, and much more important and threatening issue in my view, is Dutch Disease, the situation where a high currency value because of exports in one part of the economy – in our case, the mining/resources boom centred around WA – makes it almost impossible for exporters in other parts of the economy to compete.

While Carbon Pricing and Dutch Disease are having a negative economic impact in lots of communities around Australia, there are few, if any, that are threatened as much as our city and region.

In a message to all his staff earlier this year, new Nokia CEO Stephen Elop told a story that I think has strong parallels to the situation our city is currently facing:

There is a pertinent story about a man who was working on an oil platform in the North Sea. He woke up one night from a loud explosion, which suddenly set his entire oil platform on fire. In mere moments, he was surrounded by flames. Through the smoke and heat, he barely made his way out of the chaos to the platform’s edge. When he looked down over the edge, all he could see were the dark, cold, foreboding Atlantic waters.

As the fire approached him, the man had mere seconds to react. He could stand on the platform, and inevitably be consumed by the burning flames. Or, he could plunge 30 meters in to the freezing waters. The man was standing upon a “burning platform,” and he needed to make a choice.

He decided to jump. It was unexpected. In ordinary circumstances, the man would never consider plunging into icy waters. But these were not ordinary times – his platform was on fire. The man survived the fall and the waters. After he was rescued, he noted that a “burning platform” caused a radical change in his behaviour.

We too, are standing on a “burning platform,” and we must decide how we are going to change our behaviour.

I believe our city too is standing on a burning platform.

Examples of our industrial decline

Lets have a look at an example, in the form of Bluescope, the region’s largest employer and also responsible for tens of thousands of related and multiplied jobs.

Bluescipe recorded revenue of $4.75B in their Coated & Industrial Products Division (which is pretty much all of Port Kembla), down over 20% from over $6B in sales two years earlier (2008). And this is just sales – during this period, raw material costs went up, and the Australian dollar increased in value by more than 70% since late 2008. This exchange rate movement – the Dutch Disease in action – has made every person on payroll, every megawatt of electricity and other AUD expenses 72% higher now than their international competitors, assuming no increases in wages, power costs and the like.

Little wonder then that Bluescope experienced a drop in profit of 85% between 2008 and 2010 (and in the GFC and the 2nd half of 2009 they actually made sizable losses). While today’s announcement of an additional $300M in industry assistance for the steel sector (read Bluescope and OneSteel) will make some people in the city feel comfortable (and it isn’t tied to the carbon tax legislation, so the Greens would have to support it – good luck with that), $300M isn’t a lot of money compared to the $1.25B per year in revenue that Port Kembla is down compared to 2008. Even a government, with all the resources of treasury, can’t compete with global market fundamentals – just ask George Soros, the man who broke the Bank of England in September 1992.

BSL.AX - no wonder the share price is down 90%


There have been lots of other examples where trade exposed employers in our region have become extinct. We’ll all remember the closing of the Bonds factories in the area last year, the latest in a long line of shutdowns and mass layoffs which in previous years have included brands like Midford, and even more recently, locally owned Poppets. Unfortunately, the ledger is stacked with much more bad news than good on this score.

When it comes to our traditional economic base, our city has been lurching from one crisis to the next, while the rest of the world passes us by. It doesn’t have to be this way.

Recognition, leadership & vision

Facing up to these challenges requires an honest debate, strong leaders and the willingness for our community to come together, face facts, make some tough decisions and put in place a plan to change our economic base.

So, is there a frank debate about these issues at the moment? Are our leaders – both incumbents as well as aspirants – speaking out, being honest, and putting forward a plan? Let’s have a closer look.

Local Government

Our city is going to the polls in just 7 weeks time. I’ve been following the news as more people throw their hat into the ring, and I’ve been really hoping to hear someone out there talk about the elephant in the room.

But, alas, all I’m seeing is an empty and meaningless debate about which group of candidates is going to have better consultation and more inclusive government than the next.

What of debating the big issues, like the future of our city?

On the whole, the candidates have been silent about this, and those that are making noises about anything of substance are currently running on platforms made of platitudes that few would argue with, but which on their own are utterly meaningless.

Sure, you could argue local government is roads, rates and rubbish. I disagree – a strong Mayor and City Hall can act as a very effective leadership and lobbying force with the levels of government that actually have power, not chains – but that raises the question – where are our State and Federal representatives on this?

State & Federal Government

I’m heartened that the State and Federal members I’ve talked to about our burning platform situation are very aware of the issues. My sense from talking to them is that they see the same bleak future if we keep doing what we’re doing. The problem is, changing the nature of an economy isn’t easy, cheap or quick.

Unfortunately, they’re not out in front on the debate, and while I’m disappointed, I can also understand why.

If I was Sharon Bird, Stephen Jones or Ryan Park, I wouldn’t want to come out and scare the horses unless I had a plan to turn fear into hope. To bring up this issue without knowing you can get the support of your caucus and the treasury to make the investments to do something about it would be what Sir Humphrey would call “courageous”.

Sharon, Stephen and Ryan are worldly and smart; while some of the crazier voices in our public life might suggest fixing the exchange rate, putting up tariffs and other failed policies to provide the perception of short-term relief, our members know that going back to the “good old days” isn’t possible without a flux capacitor and a Delorian.

When it comes to bold initiatives and investing in action to transition our regional economy, our members are also hamstrung, even if they have a plan. Our safe seat status at state and federal levels of government means that our members will always struggle to get attention from the party and concessions from Treasury, and the safe seat status owes a lot of the current economic makeup of the city, which doesn’t help create the motivation for change either.

Starting a debate

Our city has been making a gradual transition over the last few decades, but the size and speed of the threats – the intensity of the fire burning under our platform – is stronger than ever before. The Finance and Insurance sector – thanks to the likes of the IMB, Community Alliance Credit Union (formerly Illawarra Credit Union), Oasis Asset Management (now known as a division of ANZ and known as OnePath) – is now the largest employer in the region, and Greg Binskin and the team at Tourism Wollongong have consistently gotten in front and espoused a vision for a strong tourism sector in the region which they’re making a reality with dogged determination.

But, to be honest, what we’ve really got here is a number of disparate actors working to improve the fortunes of the city through their own actions – what we don’t have is any real leadership, debate of vision for the future of the city, which our community can participate in and get behind.

This is a real shame, and while we continue to be mute and complacent, we ensure that by doing what we’ve always been doing, we’re going to keep getting what we’ve always been getting.

Learning from others – a tale of three cities

We’re not the first community in the world to face serious challenges like this – I’ve researched three examples which we can look at as proxies for our situation, so we can learn from their mistakes and successes. There’s a lot we can take away from the way others have faced and overcome the same adversity and threats we’re facing now. Here’s a little information about these three cities below.

  • Sheffield in England suffered for decades as the pain of the loss of their manufacturing and industrial economy in the 1970’s led to widespread unemployment and a contraction in their city and population, and have only just started turning things around.
  • Detroit, a cautionary tale, is still suffering and shows no real sign of improvement on the horizon.
  • Waterloo in Canada, saw the writing on the wall and transitioned their industry very very successfully before they declined, creating a really smooth transition and a great success story.

Sheffield – an industrial twin

The first proxy city to our own is Sheffield. The home of British Steelmaking, Sheffield saw a 10 fold increase in its population in the 1800’s through the industrial revolution, however when international competition on its inefficient sector took its toll from the 1970’s, Sheffield saw its population decline markedly (down over 7% in the 10 years to 1981, and negative each other post-war decade until the last few years).  Anyone who’s seen The Full Monty, set in Sheffield (1997), will have a feel for the bad times that city has seen.

Sheffield has since invested in developing its higher value business services sector, and while accepting the lower job contribution made by the manufacturing sector compared to days gone by, a focus on technology and real innovation has helped to bring prosperity back to manufacturing in this natural cross-roads in the middle of Britain.

None of it would have been possible without a strong, coordinated plan and commitment of various stakeholders – for more information, have a look at this excellent case study on how Sheffield is becoming a knowledge region. For specifics on how their regional governments are working together with detailed plans, check out the “Moving Forward: the Northern Way” website and plans.

Detroit – a cautionary tale

Detroit. Motown. The City of Detroit, which used to be the 5th largest city in the United States, has now shrunk to be 18th, with a population of around three quarters of a million. Only New Orleans has gone backwards further, and Detroit can’t blame a hurricane for its woes – Detroit’s failings are all man made.

The home of the American automotive industry, Detroit has been in decline since the 1980’s. As the Economist details:

Employment has fallen every year since 2000. Even as the carmakers recover, they will not resume their role as guarantors of middle-class prosperity. State leaders have struggled to respond to structural shifts. Unfortunately, rather than reform a collapsing revenue system, they have passed short-term fixes. Attempts to reinvent Michigan have moved fitfully. Grants for college students did little to encourage them to stay after graduation. Tax credits for green manufacturing industries may create too few jobs at too great a cost, according to Don Grimes, an economist at the University of Michigan.

Detroit is what happens when a city faces a series of structural challenges and threats that are as certain as gravity, and then put their head in the sand. The city levies an additional 2.5% income tax on its citizens – this was probably a good idea when the city was prosperous, but now it is a massive disincentive for anyone to live there, especially given its high levels of crime and general decay. Some statistics show their unemployment rates falling, but the reality is, people are leaving the city and its surrounding counties by the hundreds of thousands. Perhaps there is a future for a smaller Detroit, but $50B in Federal bailouts for the 3 big US auto-makers in the GFC seems like it might not have been the best investment that could have been made.

Another American city that I have done a bit of research on is Pittsburgh, the former home of the American steel industry. Pittsburgh has seen a dramatic downturn in its own steel industry, and while their ability to cultivate a high tech and startup sector looks really promising, it is still in many ways early days – the City is still losing around 10% of its population each decade, and has been since the 1960’s. Hopefully, Pittsburgh can achieve the same sort of success as Waterloo, below.

Waterloo – our Canadian doppelgänger

The town of Waterloo, Ontario, has got to be the closest thing Wollongong has to an international twin.

  • Waterloo is around 100KM from the largest city in Canada, Toronto, their equivalent of Sydney. Wollongong is 83KM from Sydney.
  • The population of the City of Waterloo is around 100,000 people and the population of the region Waterloo is centred in is around 492,000 people. Wollongong, Shellharbour and Kiama LGAs combined have around 300,000 people, with another 150,000 if you include Wollondilly and the Shoalhaven LGA’s, giving an Illawarra total of 450,000.
  • Waterloo has a strong and internationally renowned university, the University of Waterloo, which is actively engaged in their city. In addition to being a significant employer in the city, the University of Wollongong is increasingly taking a leadership role in helping to shape the future of our city (such as through the Innovation Campus).
  • Waterloo has historically been an industrial town, with strength in tanning and rubber. In the 1980’s the industry suffered a downturn, related to headwinds in their main downstream market, Detroit, and thousands of jobs were lost. From the 1970’s, the Illawarra region has suffered similar frequent retrenchments and large rounds of layoffs in from industrial sectors.

What sets our two cities apart, however, is what Waterloo did the face of its own structural change. Instead of grinning and bearing its fate, a number of civic leaders got together and decided to try and build a new, emerging industry to take up the slack.

The outcome of this effort, which recognised the opportunities an innovative and engaged University could provide when combined with relatively close proximity to the financial capital of the country, has been nothing short of amazing. The City started focusing on technology, and they managed to grow their industry from a total revenue of C$300M in 1997 to over C$19B (yes, B as in billion!) in 2007. The best known product of Waterloo’s success is undoubtedly Research In Motion, the company behind the successful Blackberry mobile phone.

After spending a week with Tim Ellis, Chief Operating Officer of the Accelerator Centre in Waterloo earlier this year, I’ve gotten a much deeper appreciation of what they’ve been able to do, and I’m firmly of the opinion that we can do something similar here in the Illawarra. The University of Wollongong has signed an MoU with the University of Waterloo – I expect many more beneficial things to come out of these two institutions cooperating.

One part of a vision for our future – creative, high tech & very liveable

I believe our city needs to take strong action to deliberately re-shape our economy if we want to be more than God’s waiting room, a bogan backwater and a place for exhausted commuters to sleep each day.

However, the isn’t a single silver bullet, and there isn’t one industry or sector alone that is going to change everything for us and make for a better, sustainable future.

I do believe, however, that the creative sector, particularly backed by technology, can play a very important part in helping to change the fabric of our city and its economy for the better.

In my recent post on the 5 Pillars of Tech, I reflected on the nature of the IT industry in our city, and put forward a case where a Startup led technology sector could have a massive and positive difference in the future of our city:

A technology Startup is product focused. They’re often developing software, and although hardware is still possibly, it is at least an order of magnitude harder to do, and it requires a lot more capital than you can usually find in Australia. Being software product focused makes you very capital efficient – no need for plant, equipment; just people and ideas and the odd laptop or two.

A technology Startup is globally oriented – they might not be selling internationally, and their first 4 clients might be companies who share the same building as them, but generally speaking, a startup is trying to solve a niche problem in a new way for a global market.

By being product focused, often software-based with a zero marginal cost of production, a technology Startup is also highly scalable. With more than a billion people online now, and the growth in smartphones and their associate app marketplaces, distribution has never been easier or less tied to your geographic location. In this sense, being a city of a quarter of a million, in country with only 22 million (which makes us a flea on the back of a Chihuahua riding on an Frigate – I’ve done the maths, and these are honestly the right ratios) doesn’t have to be a critical disadvantage.

As a foundation investor and mentor in StartMate, and the founder of two technology companies that now employ 16 staff, I’ve seen first hand how powerful and catalytic the Startup sector can be for the wider economy. Also from my 5 Pillars post:

When it comes to the role that Startups can play in contributing to the economy of the region, the best thing about them is that they’re easy to start, they harness the things we have – smart people, lowish costs of living – and their development and cultivation is within our control.

They’re also great job creators – 20 companies with 10 staff creates the same opportunities of one large company imported into the region – and even if these startups fail, the experiences, lessons and skills developed by getting out there and doing it are incredibly valuable, whether the founders choose to do another startup, or join the ranks of the other technology sectors.

I’ve recently come back from spending a month in San Francisco, which for those who don’t know is the “captial” of Silicon Valley. Part of the time I spent there involved talking to investors, and many of them were asking about where we’re based, and whether we’d move the team to Silicon Valley if they invested in us. I told them, no, are you crazy? Why would I do that? They asked for details about what made Wollongong a great place to grow a startup, so I told them the following things:

  • Talent – the University of Wollongong produces 1 in 7 technology graduates in Australia. In Silicon Valley right now you can’t hire an engineer for love nor money – I’ve never seen a war for talent like it. Just telling prospective investors the graduate statistic was enough to get them asking how they might be able to look at helping the companies they’ve already invested in – who can’t hire good technology engineers – to come to Wollongong.
  • Stability – Wollongong is an absolutely beautiful place to live. Knowledge workers can base themselves anywhere now the world is flat – having a team based in Wollongong is great for the team, and great for the business too. I heard from large multi-national employer in the region that they experience staff turnover of 5%, whereas their Sydney office, which in every other way is identical, faces 50% turnover a year. Even without factoring in soft-costs like the cost to the business of losing all that knowledge each year, the hard recruiting and training costs for this kind of turnover they’re seeing in their Sydney office are crippling, and makes Wollongong a much better place to be.
  • Diversity – if the world is flat, it is also now increasingly online. There are billions of internet users, and we’re not far from having more mobile phones than people on the planet. What isn’t changing any time soon though are the needs to speak the language and be connected and comfortable with the culture of your markets, which are increasingly Asian based. Our time zone, our strong cultural diversity and the language skills that that brings us are not insignificant, and I think they’re almost always underrated. My team today includes three people from China, one Canadian, an American, a Kiwi by birth, and doesn’t include the English, Vietnamese, Irish and other cultural heritage we all bring to the table.
  • Proximity – we’re an hour from the commercial capital and largest city in Australia. We’re even closer to our main international airport, and then an easy flight to almost anywhere in the world. We’re on the a growth time zone – Asia – for the first time in our country’s history. But we’re still small enough so that more than half of my staff walk to work each day. Less time commuting to work, markets, investors and clients means more time to spend either building a world-class company, or enjoying life with our family and friends.

For these and a litany of other reasons, I think Wollongong stands a great chance of becoming a technology and startup powerhouse, in much the same way that Waterlook in Canada has become a powerhouse on a global stage and reinvented their economy at the same time.

So, how do we make it happen?

Next Steps

The most important next step for all of us is to start to raise the alarm. Unless our city wakes from its slumber to realise the platform it is dozing on is on fire, we’re going to end up like Detroit – so hollowed out, broken and depressed that things will get better only because they really can’t get any worse. If we waken the community now, and start an honest debate about our future, we might be able to pull off a Waterloo; even if we fail, we won’t be any further behind than we are now.

To facilitate this, I’d love to see something similar to Melbourne’s Wheeler Centre here in Wollongong. Imagine something led by the Mercury, which makes use of our newly refurbished Town Hall, to facilitate the debate.

Let’s give our elected representatives some ammunition to take to Canberra and Macquaire St.

Let’s learn from the successes of others. Action, cooperation and agility is much more important than a big overarching plan.

Let’s encourage the University to keep building its relationship with Waterloo so we can benefit from their experience.

Let’s look at ways to supercharge our new and emerging industries. Tourism, financial services, technology, education. We need to focus on the industries that grow the economic base and bring jobs, income and prosperity into the region. Health and Community services, which have grown a lot of the years deserve our appreciation, but they don’t grow the economic base – they exist only if the economic base can be taxed enough to pay for them. When it comes to technology, the closing comments in my 5 Pillars of Tech article provide a bit of a blueprint; I’m sure Greg Binskin can probably provide his own specific advice for the tourism industry.

Whatever we do though, we need to remember, if we want to keep getting what we’ve been getting, we should keep doing what we’ve been doing. We need to do more. We need to do better.

We’ve got so much potential – to rob our children of the opportunity they deserve to have, and consign ourselves to the fate of a slowly decaying industrial town mired in depression, disadvantage and disappointment for merely a lack of action is just not good enough.

#publicsphere in Wollongong

The third #publicsphere event was held in Wollongong yesterday (with nodes in Melbourne and Brisbane joining in). With all things that involve an open forum and public consultation, there will be some good bits, and some bits that don’t quite do it for you.

In terms of contributions to the debate in the form of a paper or submission, you really can’t go past the Silicon Beach Lifeguard paper, assembled by Elias Bizannes along with a small army of contributors and editors from the SiliconBeach community. Here’s a video of Elias introducing the paper:

In addition to the paper/submission approach of SBA’s Lifeguard paper, there were also a lot of other good presentations.

Silvia Pfeiffer from Vquence gave a fairly sobering analysis of the challenges and opportunities facing the Australia startup sector. While much of it wasn’t new information for those of us who do this stuff every day, Silvia’s presentation did a brilliant job of assembling a plethora of issues into cohesive lists and constructs, and while I knew about the pieces already, the way she put them together certainly had me coming away with a much clearer picture of our situation. Hopefully her slides will be up on her Slideshare account soon.

Another stand-out presentation in my mind came from @nambor (Rob Manson). After getting the undivided attention from everyone in the room in Wollongong thanks to the coolest set of chops in the room, he proceeded to share how the challenge of succeeding has less to do with “supply side” factors than the (neglected) “demand side” factors. He wasn’t talking about economics (specifically): he was talking about success in technology. The basic thesis is that tech types want to keep pushing supply side – concepts like ‘building a better mouse trap’, ‘build it and they will come’, ‘lets keep innovating’ – while the demand side – taking the time to show tech users how their productivity and lives can be improved by new stuff is really poorly done and needs more focus. This principle, which played then into his main thesis of Diffusion is the Innovation, was then expanded upon. Rather than me butchering it, I’ll just embed his presentation here.

The day itself wasn’t all geek, however. Towards the end, we had a great presentation from Tim Parsons present from a creative perspective. As you’d expect from a futurist in the creative space, the presentation was exquisite. The content itself was great for stimulating some ideas and discussion, and I really thought the sentiment that “Online Culture is the Mainstream”, and not something reserved for geeks anymore, was a great observation, and something I really agree with (since now I’ve got mum on Facebook, and my girlfriend blogging). Anyway, the slide deck is at embedded below (it still looks great, but Tim’s passion in delivering it made it 10x better)

There were many other excellent presentations through the course of yesterday that I haven’t got the time or enough good quotes to include here in this post, but the good news is that the Senator’s team will be uploading the video (which was already streamed, but probably needs to be cleaned up a little and spliced into talks) next week. I’ll update this post then with a few links (including a link to me own impromptu talk on Skills, Talent and Education).

Enough of Ozcar already

While it might be compelling political theatre for the hungry Canberra media gallery, a studio audience at Q&A last week made it clear – enough with Ozcar already.

Compared to the debate over the Emissions Trading Scheme, the (frankly separate, and first) debate over the targets we should be setting to reduce greenhouse gasses, the $300Bn of spending going into “stimulus” across our economy which my generation, and my children’s generation, and possibly more, will be paying off, this is a distraction.

Enough already.

The political power of the digerati?

I’ve been planning to write a post on this for ages, but time has gotten away. Seriously. Since March the 26th. That’s the day I felt politics in Australia be changed by the internet.

It was the day Senator Conroy went on Q&A, the ABC”s live question and answer show, where he was inundated with questions – apparently over 2000 of them – from members of the public raising serious concerns about the proposed compulsory, national filtering scheme that Conroy – whether by choice or hospital pass – is the front man on.

My objection to a compulsory filter is on the record, so I really enjoyed hearing from the Senator – someone I’ve met since – try and defend his policy. From my perspective, it seemed like the Senator really didn’t want to defend it on its (lack of) merits; any time a Government in power invokes the names, acts and policies of their predecesssors, it is pretty clear they’re trying to avoid responsibility for the current state of play.

But this post isn’t just some rehashing of some persons opinion on a political matter – God knows there’s enough of that already.

No, the thing that really struck me during this experience back in March was how real time contributions, combined with the unique Twitter backchannel, opened my eyes to the noise, if not influence, of the digerati.

The speed of posts, quality of insight, and general ability to shape and resolve community sentiment online was truly breathtaking. I’ve never seen anything like it, and it will forever remain with me as a memory, something I’ll either look back on as a start of something, or as a glimpse of what might have been.

After the interview on Q&A and the extensive level of real time participation I shared with others involved in the debate, I started to wonder about what it all meant for our society, and the political process that for a century or two has been forming policy, laws, regulations and getting on with governing based on a representative system.

As I see it, there are three potential scenarios.

Option 1: The Digerati and Representational Politics

The first scenario is that we’re going to continue with a representative political process, but influence will move towards messages that are facilitated by the digerati. In this model, a small number of individuals are going to be elected/empowered to represent us citizens. They’ll be responsible for voting on laws and approving regulation, they’ll promise to consult with us and our general levels of apathy will ensure only a minority will engage with the political process beyond the ballot box. The positive thing about this scenario, however, is that more direct interaction, feedback, campaigning and consultation will happen using interactive technologies, today represented by websites, email and Twitter. It will be much easier for members of the public to make some noise and be noticed through the online environment, but at the end of the day you’ll still be trying to convince a person with 46 chromosomes to make decisions you agree with, with the option every 3-4 years of expressing your displeasure and voting them out.

To see this form of political interaction really take effect, more and more of us will need to become political animals. Our social networks, our digital interactions, our posts on Twitter, and more, will become influences on the perspectives, opinions and voting intentions in a more tangible and effective way than the media currently does. If Channel 9 tell me a movie is good, I’m going to take it with a very large grain of salt. If a good friend makes an impassioned plea that a policy is going to hurt their family or the environment, I’m going to give it a lot more credibility because of the shorter social distance. Is this a good thing? I don’t know. Many of the reforms that have our country in a much better place than most of Europe today – surrounding labour markets, trade, and to a (depressingly) lesser extent, welfare, aren’t popular and even though they’re right, perhaps a digerati backed political process wouldn’t have supported/allowed them…

Option 2: The Digital Revolution & Legislative Democracy

This situation is potentially the most revolutionary of all, and involves us, as citizens, voting directly on legislation, regulation, and the policy that frames these decisions. While the consequence of this sort of change wouldn’t mean the abolition of representative politics, it would change the dynamic; instead of voting for chair fillers who make up the numbers, we’d vote for politicians who are then charged with the responsibility of ‘selling’ their policies (or alternative policies) to their electorates. Their approach will need to be interactive and engaging – a bit shock for a number of politicians who are just making up numbers as pay-back from their party machines until they can make it to their generous pension scheme entry ages and retire – but in principle it could work quite nicely.

Of course, there are many potential problems with this model. While you’d be hard pressed to find an impartial citizen who’d vote down a 90% punitive tax on finance executive & worker bonuses for people who just deal in other people’s money without wearing any of the risk if things go pear shaped (as they did last year), there are numerous bills that are pretty dry and boring, and more disurbingly, you’d probably get pretty good support for a nut-job bill that promoted protectionism and increased tariffs, or, even worse, foolish and frankly racist immigration controls. This model certainly isn’t perfect, but then the current system (below) is hardly a pretty picture.

Option 3: Unrepresentative, 1901 Issue Myopia

More than a few of the 3 of you who read this post are probably thinking, “Hey, not everyone is online, not everyone is going to try and get involved. This digerati participation concept is really unrepresentative”. And you’re be right. But I’d argue, with more than 80% of Australian households now having the internet, the options above are a lot less unrepresentative and skewed than the status quo.

The third option I see is a continuation of a myopia where our political representatives remain wrapped in some of the most unrepresentative systems and irrelevant issues than ever, and we continue to be affected and held back by it.

Our current government is the Labor party, an organisation that until recently had it enshrined that at least half of their voting delegates to their national policy setting conference were appointed/sent by Unions. As demonstrated so dramatically in NSW in 2008, when the Labour Government of Day disagrees with these conferences, the results can be dramatic: effectively, the Union movement in NSW took down a Premier and a Treasurer, and put a multi-billion dollar hole in the State’s finances to protect the parochial interests of their members who like the idea of continuing to be employed by a benign employer who wouldn’t make sure things ran efficiently.

To look at what this means for our democracy, it is important to realise that only 60% of our population are in the labour force  (lets say 12.6m out of 21m in Australia). Of that 12.6m, about 650K are currently unemployed, so we’re dealing with closer to 12m workers. Last time I checked, about 15% of these workers were part of Unions (it has been on a downhill slide for a long time now), which means we’re dealing with about 1.8m Australians, a bit over 8% of the overall population, who control more than half of the Government. If you look at the heritage of many of the members of our Government, you’ll see a a long history in labour relations, focused on a 20th Century fixation on industrial relations and a preference in having all people equal, but of course some more equal than others.

The current prevailing model is where around 8% of the community have a dramatic level of control, and only a small fraction of that 8% actually care two hoots; they are just paid up members who have to vote for someone, and they let others run their political campaigns, often without a lot of consideration for the wishes of their broader constituents (I’ve seen this first hand more than once, and it isn’t pretty to see employees left unemployed by their representatives happy because they managed to estabilsh a precendent for others).

The digerati, through either influence and replacing the media function, or through direct participation, certainly isn’t perfect. There are many potential issues to address, and it isn’t like the current gerrymander enjoyed by groups who think industrial relations is actually the business of government – news flash: its the economy, defence, social issues, and not controlling the minute details of employment relationships that matter the most to our nation – are going to give up their narrow ideology easily.

But on the 26th of March, as thousands had their say, and even more participated online, I saw a glimse of the future where we could actually play a bigger part in shaping the country we live in, and the sooner we move beyond being governed by the narrow interests and ideologies of union hacks and lawyers, and instead harness the participatory power and intelligence of our citizens, the better!

national filtering scheme – can anyone say 'china'?

many of our international breathern would be moritifed at a plan where a national goverment tried to enforce a nation-wide internet filter to block specific content.

they do it in china – at what cost? – and the world cries foul. then they consider it seriously in a modern western democracy – with a lot of political pressure within the ruling party – and the mainstream media barely raise a whimper of concern about it.

ok, so snuff films, child pornography and many other ills to be found online are unquestionably bad news. with the ‘mandate’ of universal public distain for this content (the weirdos who are into it don’t speak up and acknowledge it for obvious reasons) the debate gets legitimacy it does not deserve.

the key question being asked at the moment is “who will pay for ISP level filtering”. the natural answer to this is government – they’ve got a fat war chest of a budget surplus and there’s nothing commercially compelling ISPs themselves to offer server level filtering. so the government pays for the filtering, and then presumably controls it as well (you’d have to be a mug to buy something designed to censor and control and then leave the control of it to someone else).

and all of a sudden you’re china.

bring on sia from sin

a month or so ago, the federal government quietly announced that it would not be approving singapore airlines application for a licence to operate flights from sydney to the united states. given that australian government is in control of our airspace and responsible for our airports (even though they’re mostly now privately owned by companies like macquarie bank), singapore airlines has to get their permission to start flying another route. sensitive to qantas potentially moving a large part of their aircraft maintenance off-shore (as air new zealand and many other top-tier carriers have done) and sacking a lot of australian workers, and knowing that most australian’s aren’t big fans of singapore after the execution of van nugen, the federal government had a politically easy decision to make, and knocked singapore back.

this is a big betrayal for anyone in austalia who travels to the united states.

singapore airlines (or sia for short) could well be the best airline in the world. a long haul flight in economy is never an outrageously pleasant experience; it is squashy, you get all dried out from the air conditioning, and sitting anywhere for 8 hours or more isn’t much fun. but singapore airlines deliver a level of service for economy passengers that you generally only get in from other airlines in business class.

well, now qantas has announced that they’re going to send their heavy maintenance work to asia for at least one 747-400 check, negating one of the major reasons the federal government decided to continue protecting them from competition with sia even though we’ve got a free trade agreement with singapore. this sort of work is very big – as are 747’s – and using the cover of a shuffling of the deck chairs as the reason for the outsourcing (“just this once, we promise”) qantas has effectively used the (non-organised) travelling public as a pawn whose interests should be weighed against those of the aircraft maintenance union (highly organised).
it’s hard to decide who to loathe more here. should it be the government for ripping off the largest number of people without a voice (travelling public, and by association the tourism sector who badly need american tourists who shudder at the thought of a 12 hour flight even though that’s what it takes to get to europe from california)? should it be qantas for milking the sydney-usa route so mercilessly with high prices and poor service? should it be the unions, who’ve traditionally had a strong bargaining position with airlines (baggage handlers are about as valuable economically as hotel bell-hops, yet they recieve exceptionally good pay and conditions because they can bring an airline to its knees in a snap strike)?

either way, the travelling public is going to continue to get screwed any time the government creates an artificial barrier to competition, and hopefully qantas’ actions in going back on their word means the government comes under pressure from the unions and makes the government less likely to shelter qantas next time sia from sin comes knocking…

society and taboo of quality parenting

ross gittins in the sydney morning herald has an excellent report on the benefits of early childhood intervention. code for better child raising, this report takes an economic, rather than a social or judgemental view of the benefits to society of better parenting, and discusses the role the government can play in reducing inequality and disadvantage in future generation by supporting programs that get involved before kids turn 8.

ross’ interest in the subject has been piqued by work from james heckman from the university of chigago (oh, and nobel prize winner in the field of economic sciences). basically, he has found that getting involved early with programs to support better parenting has massive oonsequences. using a case study of the perry preschool project from around 30 years ago in michigan (capital city detriot, home to eminem and subject of many negative social sterotypes played out in movies like 8 mile), heckman makes the case that early intevention into the development of children is much more effective in influencing lifetime outcomes than better schooling, etc.
if the study is true – and the first 5 years of a child’s life have profound influence on their intelligence, their likelihood to succeed in life and reduce their likelihood to commit crime and be subject of welfare – would society begin to accept that intervention in parenting – one of the few areas of society to still be treated as a social taboo – or would people continue to take the approach that you can’t tell them how to raise their family (but keep the welfare cheques now and in the future rolling in so we can raise the kids to be bogans the way we want to)?

additionally, what, from a macro or policy perspective, do these considerations have on the legitimacy of the indigenous partnerships programs of the australian government?