ASIA
07 November 2021
Pondering the future
Glen Robinson shares his concerns for the future -- namely, the lingering effects of COVID-19, the effects of climate change, and the fracturing of our society
As we enter into a new era, we must ponder what lies before us, and at the same time, reflect on the immediate past, because the future is going to be very different from the past. What that difference will be, is the subject of the speculative thinking which precipitated this document, but the changes will be very noticeable, dramatic, widespread, and permanent. Some will be popular, some will be resented, but there will be changes, some small, some moderate and some quite spectacular.
Why will there be changes? Mostly these will be as a result of 3 factors: -
Firstly, the lingering results of the Covid Pandemic and unfortunately, we do not know for how long the effects will remain with us, nor do we yet know the severity or the physical spread of the disease, and of course it is impossible to anticipate the new variants which may develop.
Secondly, the effects of climate change are likely to be profound, and we have not yet begun to contemplate their breadth nor depth. But the international community have really taken the situation seriously, and unfortunately, we in Australia have not, so it is not possible to anticipate the specifics at this stage.
Thirdly, the changing political landscape which creates population dichotomy and includes factors not normally seen as political, and could include religious organisations, societal organisations, ethnic groupings and the like.
Those 3 factors will conflate to a degree which is impossible to predict at this stage but conflate they will, and significantly affect our lifestyle. Let’s take a closer look at each factor.
The lockdowns were difficult to cope with, but most people recognised the reasons for them and grudgingly complied. Similarly with the masks and the very restricted movements, there was grudging acceptance. Even so, there have been 118,000 cases and 1378 deaths to October 5 which is compared to Florida USA which has a population of 22 million and there have been 3.6 million cases and 55,300 deaths up to October 1. So it could be said that we have survived quite well, to date.
[http://ww11.doh.state.fl.us/comm/_partners/covid19_report_archive/covid19-data/covid19_data_latest.pdf]
The case is quite compelling to accept some discomfort and disruption to our normal routines. The difficulty which has now to be faced is what restrictions, if any, are likely to be in place in the future, as it is most unlikely that the virus and its variants will disappear quickly and it is likely to be in place for a significant period, and unfortunately the time and the severity of the reaction cannot be anticipated at this time, but we must assume it will be around for a considerable time.
The most obvious effect of climate change in Australia is the debate over its authenticity, but not so in most of the world. There is a proportion of the population which dispute the existence of the phenomenon and there is a large number which dispute the actions being promoted to counter the effects.
What is of even more interest is the news being released about the changes which may be necessary in the future, and this relates to the possible need to change the electric power specifications, which also means the need to change all the devices which run on that power, also the different foods and preparation methods will require a change, but apparently one of the biggest changes will be in the agricultural industry, including the type of crops, including those for food, the cattle industry and the feedlot process. That has not yet been considered.
The climate change requirements are largely unknown at this stage because the effects and subsequent actions which may be required have not been fully investigated. We are in for a shock.
Another way to describe it could be to relate it to the situation in Sydney, which it is said it is no longer a city. It is a series of ghettos, each with its own geographic area, its own economic base, its own dialect or accent, its own view on the issues of the day, and not necessarily related to the views held by those in the adjoining or related ghetto.
It is a trend which is only relatively recent and is very pronounced in the difference in the treatment of geographic areas during the Covid 19 lockdowns, but it appears to be gathering traction and increased relevance.
These three factors will almost certainly be in the community as we come back to “normal” or more correctly, the new normal. They will be in the community at various concentrations, probably with variable concentrations, and it will not be possible to separate them in order to deal with them, it will be more productive to deal with the “mix” of the three as their individual concentrations will be varying, and not attempt to deal with the individual issues. Consequently, a course of action is anticipated which should deal with the conflated issues.
The manufacturing and processing industry which produces goods may be an excellent activity as hopefully it will be designed to encompass a wide range of the issues simultaneously and provide additional benefits to the community. It will provide an output of products which if properly planned, will be of value as it will provide jobs, both in the preparation of raw materials, sub-components, and the production process but also in the planning and sales and marketing and post sales accounting. It is anticipated that if this is performed appropriately, could be a major boost to the economy and address some of the identified issues.
There has been a strong push for on-shoring as the pandemic demonstrated that supply chains will be disrupted and that production of essential medical items was offshore and hence it was difficult to source these items. So the cry for ON SHORING went up. There is some substance to the attraction but there are challenges which come with it.
A walk-through Bunnings and Coles and then Uniqlo should be sufficient to convince the most ardent “on-shorer” that it is not possible to on-shore everything, and if we are to move further into it, we must be very selective on what we decide to produce locally. This is presenting a wonderful opportunity to refocus on our manufacturing capability, as the OECD has found that Australia has the lowest level of self sufficiency of any OECD country [reported in https://www.martinhamilton-smith.com.au/wp-content/uploads/2021/09/Australian-sovereign-capability-and-supply-chain-resilience-perspectives-and-options-AITI-2021.pdf]
We should avoid the temptation to target low cost, easily manufactured products, as this is the market for developing countries which have very low costs of production. We should take note of the success which some of the European countries like Sweden are able to amass, as it is a country of about half our population, not particularly noted for innovation nor entrepreneurship, but it has probably 20 companies which could be seen as global and are leaders in their sector. We must be aware of the OECD reports which show that Australia has the a ratio of imports to exports of 2.8, the highest in the OECD, whereas Germany, Ireland, Netherlands and Korea have a ratio of less than 0.7 [reported in https://www.martinhamilton-smith.com.au/wp-content/uploads/2021/09/Australian-sovereign-capability-and-supply-chain-resilience-perspectives-and-options-AITI-2021.pdf]
We should embrace the opportunity to export goods as well as services, as we have moved away from exports over the last 3 decades. The case for producing for export is compelling, the base market should be the home market, the opportunity to produce at higher volumes provides greater returns, the mixing with the competitors and other producers will ensure we are exposed to new ideas and other competitive opportunities. Not withstanding the benefits, the export market must be an extension of the home market.
There is the push to accelerate the move to produce high technology products, and we must be sure that we are producing for a customer or a defined market, and not just to satisfy the technologist within. It is very easy to become enthused about new or emerging technologies, but it must be remembered that the product and all appendages have to be paid for.
A robust manufacturing sector has considerable attraction when the supports for the sector are considered; the education both at the school level and the post school, technical & vocational education, university for the technology and the business management skills right through the process, the sales and marketing skills and the post production abilities.
One of the major issues we must face is the need for resilient and robust supply chains, and this is a major change from our previous chains. Originally our supply chains were designed to provide a low-cost answer to the need for low volume, just-in-time supply, and were designed for efficiency not for resilience nor disruption. That means that the very resilient inward supply chains will be required for those products which we will not be onshoring, and the outward supply chains will be required for those products which we will produce for the global market
We should start with the customer or consumer, who is the customer? what are those requirements? How can we best satisfy those requirements? Because if we cannot answer those questions, we should not be producing those products.
The changes which will be forced upon us as a consequence of climate change are yet to be finally determined, but we are beginning to get some hints in relation to the changes to electrical appliances, the changes to waste products, the changes to vehicles of all descriptions, the way our daily life is consumed as we reduce both the frequency and the distance of the travels we undertake, and many other factors which we will be faced with in due course. It is conceivable that even our daily food intake will be significantly changed. These changes plus the ones we cannot envisage let alone anticipate, coupled with the changes to our working life will be threatening to many people, but at least a nuisance to everybody.
Perhaps the issue which will have the biggest change is in the attitude of people, which is termed as political in the Introduction. We have developed or allowed to develop a dichotomic populace, where we are divided along lines, the most obvious is the geographic lines. Sydney is no longer a city, it is an amalgam of ghettoes, each with its own attitudes, economic status, political orientation, each with its own dialect or accent, and each with its own attitudes to the issues of the day.
The effects of the changes as a consequence of the physical changes caused by Covid and climate change are going to impinge significantly on the political landscape, and whether that is to expand it or to decrease it, cannot be determined at this stage, but changes will occur and this political dichotomy is going to contribute to the change, it will not be a passive observer, it will be an active participant, but on which team??
One of our political leaders was being interviewed on TV recently on the question of Methane and the common theme is that it must be eliminated from the atmosphere, our leader made comments like methane is produced by agricultural activity, beef farming and feed lots, and therefore cannot be prevented. There was no thought that with the new technologies already being developed that those activities can be continued but methane will not be produced. This particular politician has young children, and they will not thank him in later years for refusing to accept that changes must be made, and we have the capacity to make them in a productive way. In many cases the “new” way may be far more productive and beneficial than the “old “way.
It is most likely that the changes will occur in such a frenzy and with such frequency that the opportunity to design or plan the changes will not be available, it will be a rush as minor changes occur on top of other minor changes.
It is most appealing to ponder on the opportunity to identify the positive aspects which we desire and develop plans and actions to implement them, and we hope that does occur from to time.
Whatever the outcome, we are to be in a most interesting, adventurous and thrilling period..
Glen is a director of the Australia Thailand Business Council and a Councillor of the Australia Institute of International Affairs NSW.
The views expressed in this article are solely those of the author and not of any of the companies or organisations mentioned.
Oct 2021
Why will there be changes? Mostly these will be as a result of 3 factors: -
Firstly, the lingering results of the Covid Pandemic and unfortunately, we do not know for how long the effects will remain with us, nor do we yet know the severity or the physical spread of the disease, and of course it is impossible to anticipate the new variants which may develop.
Secondly, the effects of climate change are likely to be profound, and we have not yet begun to contemplate their breadth nor depth. But the international community have really taken the situation seriously, and unfortunately, we in Australia have not, so it is not possible to anticipate the specifics at this stage.
Thirdly, the changing political landscape which creates population dichotomy and includes factors not normally seen as political, and could include religious organisations, societal organisations, ethnic groupings and the like.
Those 3 factors will conflate to a degree which is impossible to predict at this stage but conflate they will, and significantly affect our lifestyle. Let’s take a closer look at each factor.
Covid
The effects of the Covid Pandemic have been profound in the disruption which occurred, the illnesses which it caused, and the deaths which resulted. Also, it was interesting to see the number of otherwise sensible people who objected, and some refused to take a vaccine which was designed to protect them and the people with whom they came in contact.The lockdowns were difficult to cope with, but most people recognised the reasons for them and grudgingly complied. Similarly with the masks and the very restricted movements, there was grudging acceptance. Even so, there have been 118,000 cases and 1378 deaths to October 5 which is compared to Florida USA which has a population of 22 million and there have been 3.6 million cases and 55,300 deaths up to October 1. So it could be said that we have survived quite well, to date.
[http://ww11.doh.state.fl.us/comm/_partners/covid19_report_archive/covid19-data/covid19_data_latest.pdf]
The case is quite compelling to accept some discomfort and disruption to our normal routines. The difficulty which has now to be faced is what restrictions, if any, are likely to be in place in the future, as it is most unlikely that the virus and its variants will disappear quickly and it is likely to be in place for a significant period, and unfortunately the time and the severity of the reaction cannot be anticipated at this time, but we must assume it will be around for a considerable time.
Climate Change
The effects of the actions to mitigate the effects of climate change have been very different across country and across the world, and they also will be around for a considerable time. The early actions are quite acceptable, but it is expected that over time the required actions will be much more stringent. But as an example of the divergence, the highest ratio of electric cars per 1,000 inhabitants as of 2020, with Norway leading the ranking at around 81, and with the USA at 5, Australia does not even get a mention.The most obvious effect of climate change in Australia is the debate over its authenticity, but not so in most of the world. There is a proportion of the population which dispute the existence of the phenomenon and there is a large number which dispute the actions being promoted to counter the effects.
What is of even more interest is the news being released about the changes which may be necessary in the future, and this relates to the possible need to change the electric power specifications, which also means the need to change all the devices which run on that power, also the different foods and preparation methods will require a change, but apparently one of the biggest changes will be in the agricultural industry, including the type of crops, including those for food, the cattle industry and the feedlot process. That has not yet been considered.
The climate change requirements are largely unknown at this stage because the effects and subsequent actions which may be required have not been fully investigated. We are in for a shock.
Population Dichotomy
The third factor is much more difficult to define and describe, as it is related to the dichotomy which is developing in our communities. Probably the best description is the political one, where in the olden days, a person was evaluated on the performance which was presented, whereas it is moving quite quickly to evaluating the person on the basis of their linkages, and the quality or otherwise of the issue is all but irrelevant. This is moving through the community not just within the political parties.Another way to describe it could be to relate it to the situation in Sydney, which it is said it is no longer a city. It is a series of ghettos, each with its own geographic area, its own economic base, its own dialect or accent, its own view on the issues of the day, and not necessarily related to the views held by those in the adjoining or related ghetto.
It is a trend which is only relatively recent and is very pronounced in the difference in the treatment of geographic areas during the Covid 19 lockdowns, but it appears to be gathering traction and increased relevance.
These three factors will almost certainly be in the community as we come back to “normal” or more correctly, the new normal. They will be in the community at various concentrations, probably with variable concentrations, and it will not be possible to separate them in order to deal with them, it will be more productive to deal with the “mix” of the three as their individual concentrations will be varying, and not attempt to deal with the individual issues. Consequently, a course of action is anticipated which should deal with the conflated issues.
POSSIBLE ACTIONS
There are a number of action steps anticipated which could address these issues, but as the issues are ill-defined the action steps are very prospective.The manufacturing and processing industry which produces goods may be an excellent activity as hopefully it will be designed to encompass a wide range of the issues simultaneously and provide additional benefits to the community. It will provide an output of products which if properly planned, will be of value as it will provide jobs, both in the preparation of raw materials, sub-components, and the production process but also in the planning and sales and marketing and post sales accounting. It is anticipated that if this is performed appropriately, could be a major boost to the economy and address some of the identified issues.
There has been a strong push for on-shoring as the pandemic demonstrated that supply chains will be disrupted and that production of essential medical items was offshore and hence it was difficult to source these items. So the cry for ON SHORING went up. There is some substance to the attraction but there are challenges which come with it.
A walk-through Bunnings and Coles and then Uniqlo should be sufficient to convince the most ardent “on-shorer” that it is not possible to on-shore everything, and if we are to move further into it, we must be very selective on what we decide to produce locally. This is presenting a wonderful opportunity to refocus on our manufacturing capability, as the OECD has found that Australia has the lowest level of self sufficiency of any OECD country [reported in https://www.martinhamilton-smith.com.au/wp-content/uploads/2021/09/Australian-sovereign-capability-and-supply-chain-resilience-perspectives-and-options-AITI-2021.pdf]
We should avoid the temptation to target low cost, easily manufactured products, as this is the market for developing countries which have very low costs of production. We should take note of the success which some of the European countries like Sweden are able to amass, as it is a country of about half our population, not particularly noted for innovation nor entrepreneurship, but it has probably 20 companies which could be seen as global and are leaders in their sector. We must be aware of the OECD reports which show that Australia has the a ratio of imports to exports of 2.8, the highest in the OECD, whereas Germany, Ireland, Netherlands and Korea have a ratio of less than 0.7 [reported in https://www.martinhamilton-smith.com.au/wp-content/uploads/2021/09/Australian-sovereign-capability-and-supply-chain-resilience-perspectives-and-options-AITI-2021.pdf]
We should embrace the opportunity to export goods as well as services, as we have moved away from exports over the last 3 decades. The case for producing for export is compelling, the base market should be the home market, the opportunity to produce at higher volumes provides greater returns, the mixing with the competitors and other producers will ensure we are exposed to new ideas and other competitive opportunities. Not withstanding the benefits, the export market must be an extension of the home market.
There is the push to accelerate the move to produce high technology products, and we must be sure that we are producing for a customer or a defined market, and not just to satisfy the technologist within. It is very easy to become enthused about new or emerging technologies, but it must be remembered that the product and all appendages have to be paid for.
A robust manufacturing sector has considerable attraction when the supports for the sector are considered; the education both at the school level and the post school, technical & vocational education, university for the technology and the business management skills right through the process, the sales and marketing skills and the post production abilities.
One of the major issues we must face is the need for resilient and robust supply chains, and this is a major change from our previous chains. Originally our supply chains were designed to provide a low-cost answer to the need for low volume, just-in-time supply, and were designed for efficiency not for resilience nor disruption. That means that the very resilient inward supply chains will be required for those products which we will not be onshoring, and the outward supply chains will be required for those products which we will produce for the global market
We should start with the customer or consumer, who is the customer? what are those requirements? How can we best satisfy those requirements? Because if we cannot answer those questions, we should not be producing those products.
The changes which will be forced upon us as a consequence of climate change are yet to be finally determined, but we are beginning to get some hints in relation to the changes to electrical appliances, the changes to waste products, the changes to vehicles of all descriptions, the way our daily life is consumed as we reduce both the frequency and the distance of the travels we undertake, and many other factors which we will be faced with in due course. It is conceivable that even our daily food intake will be significantly changed. These changes plus the ones we cannot envisage let alone anticipate, coupled with the changes to our working life will be threatening to many people, but at least a nuisance to everybody.
Perhaps the issue which will have the biggest change is in the attitude of people, which is termed as political in the Introduction. We have developed or allowed to develop a dichotomic populace, where we are divided along lines, the most obvious is the geographic lines. Sydney is no longer a city, it is an amalgam of ghettoes, each with its own attitudes, economic status, political orientation, each with its own dialect or accent, and each with its own attitudes to the issues of the day.
The effects of the changes as a consequence of the physical changes caused by Covid and climate change are going to impinge significantly on the political landscape, and whether that is to expand it or to decrease it, cannot be determined at this stage, but changes will occur and this political dichotomy is going to contribute to the change, it will not be a passive observer, it will be an active participant, but on which team??
One of our political leaders was being interviewed on TV recently on the question of Methane and the common theme is that it must be eliminated from the atmosphere, our leader made comments like methane is produced by agricultural activity, beef farming and feed lots, and therefore cannot be prevented. There was no thought that with the new technologies already being developed that those activities can be continued but methane will not be produced. This particular politician has young children, and they will not thank him in later years for refusing to accept that changes must be made, and we have the capacity to make them in a productive way. In many cases the “new” way may be far more productive and beneficial than the “old “way.
SUMMARY
In summary, we are going to be participants in massive changes in the new normal, some of these changes can be seen as positive and will address undesirable issues, and others will be detrimental to our society. It is possible to address the undesirable issues which are currently in society and take action on them, however we must be vigilant to identify new ones as they begin to develop and take remedial action.It is most likely that the changes will occur in such a frenzy and with such frequency that the opportunity to design or plan the changes will not be available, it will be a rush as minor changes occur on top of other minor changes.
It is most appealing to ponder on the opportunity to identify the positive aspects which we desire and develop plans and actions to implement them, and we hope that does occur from to time.
Whatever the outcome, we are to be in a most interesting, adventurous and thrilling period..
About the Author
Glen Robinson Glen Robinson is a co-founder and director of Asean Focus Group with Peter Church which was formed in 1990 to provide advice and assistance to those organisations which wished to take a commercial presence in ASEAN and other Asian countries. A number of years ago the company entered into a joint venture with the Venture Group and now both jointly trade as AFG Venture Group.Glen is a director of the Australia Thailand Business Council and a Councillor of the Australia Institute of International Affairs NSW.
The views expressed in this article are solely those of the author and not of any of the companies or organisations mentioned.
Oct 2021