Random Analytica

Outside of the Cloud and Big Data there is a word that is over utilised and often miss-purposed in modern employment (plus unemployment or underemployment) parlance.

That word is Disruption.

Looking at the modern meaning of the word via freedictionary.com

1. To throw into confusion or disorder.

2. To interrupt or impede the progress, movement, or procedure of.

3. To break or burst; rupture.

Having a look at some of the mainstream HR discussions taking place at the moment you would think that the disruption taking place in our modern workplaces only offers opportunities and that the liabilities of disruption and disruptive technologies can only ‘revolutionise’ tired industries.

Rachel Botsman will be discussing disruption at one of Australia’s largest HR conferences this year. Specifically she will talk about:

“Publishing, music, retail and travel have all been revolutionized by digital technologies. Who’s next in line? In this big-picture speech, Rachel explains the need and radical opportunity for industries, from education to finance to manufacturing, to reinvent their business model over the next decade to get ahead of the great disruption. As more industries ‘blow up hierarchy’ and move towards reaping the benefits of collaboration, how will it change the way employees think about work and what does this mean for the HR industry? Participants will be inspired by examples from all around the world that are challenging the status quo, and using technology internally and externally to stay relevant in an age of unprecedented change.’

What does disruption look like (macro-view)?

Malcolm Farr wrote an excellent piece about micro enterprises in 2011 titled ‘Australia shuts up shop: the effect the GFC has had on your local stores’. Although I would suggest that the GFC is not the major reason for the slide in Australian micro-business some of the interesting findings in his piece include:

• According to the Australian Parliamentary Library the amount of small businesses in Australia that employed 1-4 persons decreased from 528,669 to 497,191 between 2007 and 2011 (impacting between 31,528 to 126,112 persons or 0.2 – 1.2% of the participatory population during that time).
• During the same period small businesses which employed between 5-19 persons increased from 227,883 to 233,832 an increase equal in-line with economic growth.

This is what disruption really looks like (micro-view):

That photo, taken only this week was one of two DVD micro-businesses left in Gympie, a small regional city of around 20,000 souls some two-hours north of Brisbane Queensland. It’s been operating for around 20-years, is a family run business and employed around half-a-dozen first time workers in a part-time capacity. There would have been an extensive list of maintenance and supply-chain inputs which allowed this business to run and assisted other small enterprises who provided those services.

Next month there will be one less family run micro-business in this small regional town which can ill afford the loss of any business. That family will now be looking for other employment as will the part-time workers and all the inputs required to run will now be less one client.

What will replace this business?

If you believe Rachel the business has been revolutionised, much like Blockbuster UK was recently revolutionised! What is actually happening is that the model was expensive and out-dated and has been replaced by a number of options all requiring much less in cost input terms, including employment in source countries although there may be employment in digital supply chains. Options which are commonly replacing bricks and mortar micro-enterprises such as this one:

• DVD vending machines (same cost without the service);
• Bundled digital options (with bundled extended bill each month on your phone or pay TV carrier service);
• Online (PAYG, assisting global corporations while helping multi-nationals such as Amazon avoid their tax burdens);
• Outright piracy;
• Turning the telly off.

Final Thoughts

‘Peak Jobs’ is the idea that technology is replacing jobs faster than it’s creating them. For those more technically inclined it can also be attributed to the finalisation of the increased growth in average output (and income) per labour unit due to technological change since the 1820’s as put forward by Robert Solow (1956) or the commencement of technological unemployment as put forward by John Maynard Keynes (in the 1930’s) without the opportunity to transition into new roles as productivity increases but global employment declines.

For Australia this meant that not only was there a movement by larger businesses toward part-time or flexible work options but also a Darwinian attrition of small businesses. This was especially impactful on micro-businesses which employed 1-4 persons since the GFC and now is impacting on the next tier in the SME chain. All of this without a likelihood of same-for-same employment transition across the economy as disruptive (read technological) replacements are sourced, placed and deployed.

Publishing, music, retail and travel are just the tip of the spear.

Wait until disruption really starts to squeeze.

Note: My previous posts on Peak Jobs can be found at:

• Peak Employment (Part I): Australia; and
• Peak Employment (Part II): UK.