Markets are off to the worst start in a decade. People are terrified of another 2008-style crash. The IMF just lowered their forecast for global growth. China is slowing. The oil price is at bargain prices. The commodities boom is over. There’s just not much to get excited about.
You might have had enough of all the doom and gloom.
Sadly, I’m going to give you more today. Except this doom and gloom is one not many people are talking about.
I think people just want to deny it, until it’s too late. But it’s such a huge risk that it could really end Australia.
This risk keeps me up at night. I worry about it because it will affect my future kids. And then affect their kids — and their kids’ kids.
This risk is far bigger than the market. Far bigger than a stumbling Aussie economy. Far bigger than oil, commodities or horrible markets.
This risk is even more worrying than ISIL extremists. This risk puts your entire future at stake. It puts everything at stake. In fact, if we don’t tackle this risk there might not even be an economy to invest in at all.
Five million reasons to wake up to the future
Bloomberg reports that,
‘Over five million jobs will be lost by 2020 as a result of developments in genetics, artificial intelligence, robotics and other technological change, according to World Economic Forum research.’
Technically the World Economic Forum (WEF) research says about 7 million jobs will be lost. However, they add that around 2 million new jobs will be added. The WEF goes on to explain this will all lead to a Fourth Industrial Revolution.
There is nothing ‘industrial’ about this revolution. This is an ‘Automated Revolution’.
The automated revolution has been underway for a while. Robotics and automated systems have been in use in manufacturing for decades. It’s not new technology.
However, those five or seven million jobs will include ‘white collar’ jobs. That’s what’s got people worried. It’s what has me worried.
It should terrify you. In fact it should terrify you more than the markets right now. If there’s no economy to invest in in the future, then no one’s making money.
Preparing workers divorced from the actual workforce
The authors of the WEF paper highlighted,
‘To prevent a worst-case scenario — technological change accompanied by talent shortages, mass unemployment and growing inequality — reskilling and upskilling of today’s workers will be critical.’
It’s that last point I’m most interested in.
‘Upskilling of today’s workers will be critical.’
Did you get that? Critical. If we don’t reskill the world and prepare tomorrow’s workers for the future, we’ll all be in dire straits. We’ll end up in that worst-case scenario.
The thing is, I think Australia is heading for a worse-case scenario. And it’s a bigger threat to our economy and markets than any other geopolitical of security risk.
Our education system isn’t doing enough to prepare for the future. Primary, secondary and tertiary all need a revolution. If nothing drastically changes, the workers of tomorrow won’t have the skills needed for an automated future.
Robert Holt, a Masters student at the University of Melbourne, spoke to the Australian Financial Review about his experience at uni.
‘We are learning the essentials but it’s the way in which we’re taught to work and the tools that differs [to the workforce],
‘For me to find a job from where I sit now is quite hard. It’s quite far flung and there is a need to offer students independent workplace experience.’
The AFR article with Mr Holt also explains that,
‘[Mr. Holt] said while he enjoyed his degree what he was learning was “very much divorced from workplace requirements”. Mr Holt said university curricula in the United States for software engineering courses were “more relevant to the actual field of work”.’
Australia is lagging. We used to be a country known for high standards of education. Except now we’re creating highly knowledgeable but irrelevant workers.
Sure, for the next five years things might tick along as usual. But things will start to change. Jobs will go. Unemployment will creep. Young people will head offshore for their education. Crucial industries such as science and technology will stumble. Business will slow. Confidence will fall. Australia will grind to a halt.
There is a way out. But it takes action. And it needs to happen now.
You think it’s bad now. What about 0% growth?
Australia must become a high-technology country. We need to attract big business tech to set up shop in Australia. We need to build a future workforce that will stay at home. A high skilled workforce that will help build ‘future Australia’. It’s the only way Australia can return to a strong economy.
The government’s ‘Innovation Agenda’ is a step forward. But it will come down to action. The idea is good but they need to do something about it now. Without positive change to the education system the Aussie economy is doomed.
Sure you could worry about the stock market today. But imagine Australia with an irrelevant workforce. Imagine an economy with 0% growth. Imagine an economy with no real plan. With no way out. What would the stock market be like then…?
That’s what I worry about at night. Not China, not the US and not the threat of extremism. Perhaps if we were all worrying about the right things then there would be sufficient groundswell to force a change. Hopefully Australia will wake up to the fact its future is in its own hands, not that of China, the US or anyone other than us.