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

Australian Centre for Innovation & International Competitiveness

The Context is the Global Knowledge Economy

Australian Centre for Innovation & International Competitiveness Globalisation - increasing development and deepening of world markets in capital, goods and services by the increasing occurrence of commercial exchanges across international boundariesGlobalisation - increasing development and deepening of world markets in capital, goods and services by the increasing occurrence of commercial exchanges across international boundaries

Australian Centre for Innovation & International Competitiveness Globalisation n Age of hyper-capitalism n Intangible assets increasingly important n Share price/net tangible assets grew by 50% in last 3 years. n Patent applications increased by 2500% in past 5 years

Australian Centre for Innovation & International Competitiveness Which Means n Doing business anywhere, anytime n Every market is a global market n Every consumer is a market of one n No company, no business is immune n Your most dangerous competitors are the ones you don’t know

Australian Centre for Innovation & International Competitiveness The critical difference between the old and the new economies is not dot.coms, nor e-commerce, nor sustained growth without inflation. It is that the old economy raised capital to invest in physical capital. The new economy raises finance to invest in ideas and innovation Knowledge Economy

Australian Centre for Innovation & International Competitiveness

Paradoxes of Knowledge n Using knowledge does not consume it. n Transferring knowledge does not lose it. n Knowledge is abundant, but the ability to use it is scarce. n Producing knowledge resists organisation. n Much of it walks out the door at the end of the day.

Australian Centre for Innovation & International Competitiveness In a knowledge economy the production, distribution and use of knowledge is the main driver of growth, wealth creation and employment across all industries. The knowledge required is cultural, social and managerial, as well as technological.

Australian Centre for Innovation & International Competitiveness n Because knowledge does not wear out it is a source of super- value and super-productivity. n Knowledge alone can add value to an otherwise closed, zero- sum system.

Australian Centre for Innovation & International Competitiveness n A knowledge economy is a hierarchy of networks, driven by the acceleration of the rate of change and of learning. n The opportunity and capability to join knowledge-intensive and learning-intensive relations determines the wealth of individuals and firms. (OECD) (OECD)

Australian Centre for Innovation & International Competitiveness n The innovation system is dependent on strong links between all players, government, industry and research performers (Australia’s Chief Scientist) n Linkages do not simply mirror a clear-cut division of labour in the production of knowledge. They represent an institutionalised form of learning that provides a specific contribution to the stock of economically useful knowledge. (OECD)

Australian Centre for Innovation & International Competitiveness Changing Knowledge Work “There is a shift from applying knowledge in a relatively stable environment to using and creating knowledge to comprehend and transform a rapidly changing environment” (Ron Johnston)

Australian Centre for Innovation & International Competitiveness 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

Australian Centre for Innovation & International Competitiveness Preparing the Knowledge Worker n Lifelong learning n learner-directed learning n learning to learn n contextualised learning n customised learning n transformative learning n collaborative/cooperative learning n just-in-time learning

Australian Centre for Innovation & International Competitiveness Some Major Uncertainties ? ?? ? ? ? ? ? ?

Australian Centre for Innovation & International Competitiveness Opportunities and Challenges n From sector to network organisation –Seamless learning –From structure to relationship –Structural barriers n Navigation through learning and work –From supplier to consumer-driven n Access to learning –Location independent –Regional learning hubs n Stratified learning opportunities –Role of learning in social change –Need for pluralism –Need for public funding

Australian Centre for Innovation & International Competitiveness Opportunities and Challenges 5.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 approaches 10.Demographic change 11.Changing nature of work Casual contractor versus knowledge asset

Australian Centre for Innovation & International Competitiveness Beware the Sixth Extinction! Global Warming & Environmental Sustainability

Australian Centre for Innovation & International Competitiveness Power of the consumer n Universal perceptions: –competition --> reduced customer service –globalisation --> reduced customer service –technology (computer systems) --> reduced customer service –economic rationalism --> increased inequity –economic rationalism --> greater unhappiness –economic rationalism --> loss of community

Australian Centre for Innovation & International Competitiveness The Yearning for Community n Anti-globalisation n Limitations of consumerism n ‘Give them circuses’ n Social and spiritual connection