Australian Centre for Innovation & International Competitiveness The Future by Professor Ron Johnston Victorian TAFE Association 19 May 2001 Swinburne

Australian Centre for Innovation & International Competitiveness

The FutureThe Future

by Professor Ron Johnstonby Professor Ron Johnston

Victorian TAFE AssociationVictorian TAFE Association

19 May 200119 May 2001

Swinburne University CampusSwinburne University Campus



The Context is The Context is the Global the Global Knowledge Knowledge EconomyEconomy


What is it?What is it?• Globalisation - increasing development and deepening of Globalisation - increasing development and deepening of world markets in capital, goods and services by the world markets in capital, goods and services by the increasing occurrence of commercial exchanges across increasing occurrence of commercial exchanges across international boundariesinternational boundaries


GlobalisationGlobalisation

Age of hyper-capitalismAge of hyper-capitalism Intangible assets increasingly importantIntangible assets increasingly important Share price/net tangible assets grew by 50% in last 3 years.Share price/net tangible assets grew by 50% in last 3 years. Patent applications increased by 2500% in past 5 yearsPatent applications increased by 2500% in past 5 years


Which MeansWhich Means

Doing business anywhere, anytimeDoing business anywhere, anytime Every market is a global marketEvery market is a global market Every consumer is a market of oneEvery consumer is a market of one No company, no business is No company, no business is

immuneimmune Your most dangerous competitors Your most dangerous competitors

are the ones you don’t knoware the ones you don’t know


The critical difference between The critical difference between the old and the new economies is the old and the new economies is not dot.coms, nor e-commerce, not dot.coms, nor e-commerce, nor sustained growth without nor sustained growth without

inflation.inflation.

It is that the It is that the old economyold economy raised raised capital to invest in physical capital to invest in physical

capital.capital.The The new economy new economy raises finance raises finance to invest in ideas and innovationto invest in ideas and innovation

Knowledge EconomyKnowledge Economy


0

50

100

150

200

250

300

350

400

1990 2000 2005

Knowledge embeddedin goods and services

Capital value ofknoweldge

Knowledge production

Value of KnowledgeValue of Knowledge


Paradoxes of Paradoxes of KnowledgeKnowledge

Using knowledge does not consume it.Using knowledge does not consume it.

Transferring knowledge does not lose it.Transferring knowledge does not lose it.

Knowledge is abundant, but the ability to use it is scarce.Knowledge is abundant, but the ability to use it is scarce.

Producing knowledge resists organisation.Producing knowledge resists organisation.

Much of it walks out the door at the end of the Much of it walks out the door at the end of the day.day.


In a knowledge economy In a knowledge economy the the production, distribution and production, distribution and use of knowledge is the main use of knowledge is the main driver of growth, wealth driver of growth, wealth creation and employment creation and employment across across all industriesall industries..

TThe knowledge required ishe knowledge required is cultural, social and cultural, social and managerialmanagerial, as well as , as well as technologicaltechnological..


Because knowledge does Because knowledge does not wear out it is a source not wear out it is a source of super-value and super-of super-value and super-productivity.productivity.

Knowledge alone can add Knowledge alone can add value to an otherwise value to an otherwise closed, zero-sum system.closed, zero-sum system.


A knowledge economy isA knowledge economy is a hierarchy of a hierarchy of networks, driven by the acceleration of networks, driven by the acceleration of the rate of change and of learningthe rate of change and of learning..

TThe opportunity and capability tohe opportunity and capability to join join knowledge-intensive and learning-knowledge-intensive and learning-intensive relations determines the intensive relations determines the wealthwealth of individuals and firms. of individuals and firms.

(OECD)(OECD)


The innovation system is dependent on The innovation system is dependent on strong links between all players, strong links between all players, government, industry and research government, industry and research performersperformers (Australia’s Chief Scientist)(Australia’s Chief Scientist)

LinkagesLinkages dodo not simply mirror a clear- not simply mirror a clear-cut division of labour in the production cut division of labour in the production of knowledge. They represent an of knowledge. They represent an institutionalised form of learning that institutionalised form of learning that provides a specific contribution to the provides a specific contribution to the stock of economically useful stock of economically useful knowledge. knowledge. (OECD)(OECD)


Changing Changing Knowledge WorkKnowledge Work

““There is a shift from applying knowledge There is a shift from applying knowledge in a relatively stable environment to in a relatively stable environment to using and creating knowledge to using and creating knowledge to comprehend and transform a rapidly comprehend and transform a rapidly changing environment” (Ron Johnston)changing environment” (Ron Johnston)


Knowledge work is...

Which requires individuals with...

And organisations that...

•Complex•Uncertain•Ambiguous•Unstructured•Difficult to observe and measure•High risk

-High pattern recognition skills-flexibility and tolerance for ambiguity•Teams-skilled at collective “sense making”

-develop knowledge worker novices into experts-rapidly build effective virtual teams-build a culture of improvisation-balance creativity with risk management


Preparing the Preparing the Knowledge WorkerKnowledge Worker

Lifelong learningLifelong learning learner-directed learninglearner-directed learning learning to learnlearning to learn contextualised learningcontextualised learning customised learningcustomised learning transformative learningtransformative learning collaborative/cooperative learningcollaborative/cooperative learning just-in-time learningjust-in-time learning


Some Major Some Major UncertaintieUncertaintie

ss

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? ?

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Opportunities and Opportunities and ChallengesChallenges From sector to network organisationFrom sector to network organisation

– Seamless learningSeamless learning– From structure to relationshipFrom structure to relationship– Structural barriersStructural barriers

Navigation through learning and workNavigation through learning and work– From supplier to consumer-drivenFrom supplier to consumer-driven

Access to learningAccess to learning– Location independentLocation independent– Regional learning hubsRegional learning hubs

Stratified learning opportunitiesStratified learning opportunities– Role of learning in social changeRole of learning in social change– Need for pluralismNeed for pluralism– Need for public fundingNeed for public funding


Opportunities and Challenges5. Information Technology

• Unimagined impacts• Coherent approach to develop capability, alliances• Flexible learning

6. Efficiency and effectiveness in learning• Diffusion of good practice• Programs and targets

7. Learning as a universal cultural value• Progressive removal of barriers

8. Resources for learning• Distinction between public and private good blurring

9. Quality management – new approaches10. Demographic change11. Changing nature of work

• Casual contractor versus knowledge asset


Beware the Sixth Extinction!

Global Warming & Global Warming & Environmental Environmental SustainabilitySustainability


Power of Power of the consumerthe consumer Universal perceptions:Universal perceptions:

– competition --> reduced customer servicecompetition --> reduced customer service– globalisation --> reduced customer serviceglobalisation --> reduced customer service– technology (computer systems) --> reduced technology (computer systems) --> reduced

customer servicecustomer service– economic rationalism --> increased inequityeconomic rationalism --> increased inequity– economic rationalism --> greater economic rationalism --> greater

unhappinessunhappiness– economic rationalism --> loss of communityeconomic rationalism --> loss of community


The Yearning for The Yearning for CommunityCommunity

Anti-globalisationAnti-globalisation Limitations of consumerismLimitations of consumerism ‘‘Give them circuses’Give them circuses’ Social and spiritual Social and spiritual

connectionconnection

Documents

Australian Centre for Innovation & International Competitiveness The Future by Professor Ron Johnston Victorian TAFE Association 19 May 2001 Swinburne