Tuesday, October 16, 2012

Demographic threads & the need for a new view, plus a taste of geology

Congratulations to Northern Rivers Geology on turning one. How to emigrate from the Northern Rivers provides an explanation for the strange coastal rivers patterns in Northern NSW. They used to flow west. It also suggests a geological way of achieving self government for New England!

Neil Whitfield has been revisiting some past stories. Past and future–Surry Hills to The Gong made me feel a tad ancient, at least in blogging terms, for it includes a story from October 2006 where our two blogs in combination put old friends back together. Oh dear, six years!

I love it when people find the time to do some research.

Greg Jericho's Australia’s Unemployment Rate Increases to 5.4% looks in detail at some of the recent and not so recent Australian employment statistics. In a piece the day before on the ABC's The Drum he looked at the changing role of women in the workplace. Then in another piece, again on the same site, Michael Janda wondered Has Australia already passed its labour force peak? In the meantime on a different track, a global report finds Australian women to be the most economically empowered in the world. Then on what must seem a completely random segue, Armidale Hospital has been left with just one general physician after three resigned in one month, affecting medical training. Meantime, in the Australian Parliament, Government and opposition combined to pass legislation moving those receiving parenting payments onto the lower newstart (unemployment) benefit once dependent children reached a certain age.

All these stories are interconnected because they are all linked to fundamental demographic change measured not just by age cohorts or by gender balance, but also by changes in education and skill mixes distributed between genders and age cohorts and over geographic space. They are also linked to and interconnected with economic change that in its turn is linked to demographic change.

In discussion, me included, we tend to look at at the immediate present. However, things like demographic change are long term and indeed often inexorable.

As it happens, at just the time that Neil and I were uniting old friends, I was musing over some of these issues. At the end of October 2006, I wrote: 

Over the last decade the Australian economy has grown rapidly by world standards. We have accommodated this growth largely through improved productivity aided by skilled migration. Part of the productivity growth has been real (working better), but another part has simply come from working harder as measured by increased working hours.

After a decade of fast growth, skilled labour shortages have emerged across the Australian economy from skilled trades through para professionals and professionals. In some cases, engineering and dentistry are examples, these have reached crisis point requiring urgent corrective action.

There is a further factor. Skilled people are increasingly mobile in a world marked by global skills shortages and increasing competition for particular skills. Something over 800,000 Australians now live abroad. In the words of a Senate Committee (here) that examined the expatriate issue, "Australian expatriates increasingly tend to be young, highly skilled and highly educated", that is just the group the professions need.

Australia clearly has a problem. If we now track forward, you have to ask how we are going to sustain growth in the face of stagnant student numbers combined with growing global competition for good people. Worse, over the next decade an increasing number of baby boomers will retire, so we have to find replacement people as well as people required to carry out new activities.

I have painted a fairly stark macro picture. If my analysis is in any way correct, then individual firms are going to be struggling to get and hold the people they need. They will also be facing another challenge as well in that attitudes within the professional work force towards work have changed, a process that continues.

I know a fair number of Australian senior professionals. I find it disturbing that so many of them are to greater or lesser extent unhappy with their professional life. They are, quite simply, tired of the constant pressure. In the words of one person I know well, "It's just not fun any more."

When you look at younger age groups, you find an increasing proportion that are no longer prepared to pay the price associated with traditional career success. They, and especially the women, want a different life style.

I am writing from an Australian perspective. However, I do not think that this is a uniquely Australian problem. The demographic patterns that I have talked about are wide spread, while my monitoring of global discussions suggests that the attitudinal issues I am talking about are also wide spread.

This brings me to something that puzzles me. If my analysis is correct, the people challenge is going to be the single most important strategic issue all firms will need to address over the next decade. Why, then, is there so little apparent interest in it? The discussion is there, you only have to look at David Maister or Bruce MacEwen to name just two to see it, but it does not seem to be getting the traction it deserves.

Is it because individual firms think that they can deal with it themselves? Are people just too busy to focus? Have I simply missed the discussion?

I don't know, and I find it very frustrating. There are so many things that firms could and in my mind should be doing now to set themselves up to manage the issue, things that would improve performance anyway. How do we get the story across?

I was writing in a particular context and at a particular time, but it introduces one of the elements at the back of my mind when I wrote Economic threads & the need for a new view. And what, if anything, does this have to do in another theme, Indian Mutiny 1 - trouble at Meerut?  Nothing really. The Mutiny is a distraction. Mind you, I am struck by the fact that it marked the end of an old India and the creation of a new. Perhaps there is a link after all.


In a comment, kvd said:

Jim (re changes in demography) it would be interesting to see the change in mix over the years between 'native born' Aussies and immigrants? It just seems to me that our immigrants are almost pre-qualified to do better in our rapidly changing job market than 'the locals'. Just a thought.

Actually, that's an interesting one, for the mix of native and overseas born has varied greatly across Australia's history. Further, so has the composition of the migrant mix, as has the economic and social environment that the migrants entered into. There have also been significant shifts in patterns down the first few generations after migration. The current mix is not the same as twenty years ago. That affects Australia's future. 


Anonymous said...

Jim(re changes in demography) it would be interesting to see the change in mix over the years between 'native born' Aussies and immigrants? It just seems to me that our immigrants are almost pre-qualified to do better in our rapidly changing job market than 'the locals'. Just a thought.


Jim Belshaw said...

You raise an interesting point. It's not just the mix between native and immigrant born, but also the changing mix between migrants relative to the job market plus the effects of the generations - children, garndchildren etc of migrants.