Analysis

Scenarios for the future of geopolitics

The balance of power is shifting. To understand events in the international arena, it helps to distinguish whether our current period is essentially stable or in significant flux. In an article written a quarter of a century ago, during another time of rapid and relentless change, my co-author and I described the former type of period as a plateau phase, and the latter as one of historical transition. A series of recent developments suggests that the domestic political situations of several key players in the international arena are undergoing significant shifts, as are relations between players. Everything seems to indicate that the world is in another period of historical transition. A shortlist of the developments that point in this direction include: the breakdown of the political centre in several advanced democracies; centrifugal tendencies in the long-prevailing regional and international structures, of which the Brexit vote is one example; the accentuation of authoritarianism in Russia and China; and last, but certainly not least, the collapse of American moral leadership. Against this backdrop, how might we expect strategic relations to evolve in the next 20 years? In the short to mid-term, the key issue is the relationship between those powers that have been largely responsible for creating the post-WWII order, and those that are challenging it, in an effort to erect a new paradigm calling that order into question. In which direction this relationship is moving should become clear within the next five to ten years, and perhaps much sooner. There are essentially three possible outcomes. One is that the current Western-dominated paradigm manages to overcome its current weaknesses and disunity, creating space for and movement towards a renewed democratic revolution. In the process, it forges an environment in which the challenging powers can be successfully encouraged to integrate. Call […]

The Innovators Dilemma

– by Clayton M. Christensen What do the Honda Supercub, Intel’s 8088 processor, and hydraulic excavators have in common? In The Innovator’s Dilemma they are all examples of disruptive technologies that helped to redefine the competitive landscape of their respective markets. These products did not come about as the result of successful companies carrying out sound business practices in established markets. In The Innovator’s Dilemma, author Clayton M. Christensen shows how these and other products cut into the low end of the marketplace and eventually evolved to displace high-end competitors and their reigning technologies. At the heart of The Innovator’s Dilemma is how a successful company with established products keeps from being pushed aside by newer, cheaper products that will, over time, get better and become a serious threat. Christensen writes that even the best-managed companies, in spite of their attention to customers and continual investment in new technology, are susceptible to failure no matter what the industry, be it hard drives or consumer retailing. Succinct and clearly written. The Innovator’s Dilemma is an important book that belongs on every manager’s bookshelf.

The word globalisation is out of date. This is what should replace it

The word globalisation has lost its relevance and lustre with the emergence of the new global economy of the 21st century. In fact, it’s become an anachronism. Its deficiency is that it’s not a new concept which creates nuances of confusion. Globalisation describes the international outreach of countries for the purpose of economic, social, political and cultural liaisons. Global linkages between countries through military conquest, colonisation, multilateral free trade agreements and cultural exchange existed in an uninterrupted continuum in the evolving history of humankind. Historically, however, the process of globalisation has taken different forms, and its meaning has changed and mutated since it was first used in English in the 1930s. For lack of a better word, the term received an extension to its lifeline until the end of the 20th century despite the profound structural changes and technological advances that began to take place in the 1980s. Therefore, globalisation has come to be used to represent “modern” 20th century economics and social processes, including the instant exchange of money enabled by internet technologies. Yet because of its varied historical use, it does not truly reflect the electronic and digital empowerment that has been unleashed by the information technology revolution. Therefore, globalisation is not an accurate descriptor of the 21st century and the internet-driven transformational change sweeping the international economic landscape. And so I have coined the term internetisation which I believe should replace the concept of globalisation. Internetisation: Time, geography are irrelevant Internetisation is the contemporary face of globalization. It includes the modern tools of electronic globalization and embraces the digital connectivity and empowerment of the internet and the World Wide Web. Although we could widen the term globalisation to include internetisation, I believe it is better to replace the word globalisation altogether because the long duration of its […]

Bali’s Mt Agung eruption shows how businesses should and shouldn’t react

Tourism businesses should start by communicating precisely what they are going to do about the situation to the customer – quickly and clearly, to reduce uncertainty and avoid confusion. Russel PJ Kingshott, Senior Lecturer in Retailing, School of Marketing, Curtin Business School, Curtin University There’s nothing like an erupting volcano to reveal who does and doesn’t have their crisis management plans sorted out. Sudden uncontrollable events are an inevitable part of any tourism operation. Businesses worth their salt should at least in principle have the capacity to remedy situations that go wrong, as part of their modus operandi. Conventional marketing wisdom says that when organisations react properly to uncontrollable events, it has positive consequences for their overall relationship with their customers. But for this to be effective, those affected customers need to have a quick response from businesses or it could simply be counterproductive. The closure of Bali’s Ngurah Rai Airport left many passengers stranded. And while the volcano and its ash cloud are beyond airlines’ control, how they respond to the needs of stranded passengers is completely within their remit. How to prepare and handle uncontrollable events Tourism businesses should start by communicating precisely what they are going to do about the situation to the customer – quickly and clearly, to reduce uncertainty and avoid confusion. This needs to be backed up by tangible actions, namely doing the specific things promised and making amends with the customer. Fail to do this, and businesses run the risk of further negative consequences. Speaking from recent personal experience during a short vacation in Bali, Jetstar Australia quickly communicated that relief flights departing from the island would come into operation immediately (weather permitting). They also made it clear to any inbound Bali passengers that there would be no flights bringing them to the island unless longer-term weather conditions were deemed […]

The truth behind big bubbles and crashes

When Katherine Hunt’s dad asked her whether or not he should invest in Bitcoin, alarm bells rang, first she thought “he’s a musician”. Hunt is a lecturer in accounting at the Griffith Business School, and as someone who knows the five stages of a bubble and crash, she was worried when it seemed everyone was thinking they needed to “get in on” Bitcoin. “The stock market is a manifestation of the psychology of everyone who is investing, so of course there is going to be these crazy stages,” Hunt says. There is a boom, as momentum behind a new stock or asset speeds up and the media starts to cover it, fuelling its price rise. Then the euphoria sets in, the value of the asset skyrockets and people start to make a profit. But looming around the corner is the panic. Investors feel the last phase of a crash far more than they do the elation of the price rising, Hunt says. Panic breeds more panic and the price falls. Hunt is seeing this pattern play out with the stocks of the more well known gig economy businesses like Airbnb and Uber. These businesses now enjoy the privilege of being the only, or one of a few of their kind, in the marketplace. But Hunt says this can’t last. “In an open market that’s not the case at all, there’s always going to be competition and these companies will fall. It’s just probably that they’ll fall in 30 or 40 years, not necessarily tomorrow,” she says. Of course this is all easier to see in hindsight. Remembering the global financial crisis John Crosby, now a senior lecturer in finance at the University of Technology Sydney, was once working as an investment banker at Lloyds of London in 2007 when he […]

This is how a universal basic income can end financial exclusion

A customer withdraws money from a Bank of Baroda automated teller machine (ATM) in Mumbai, India The main argument for a universal basic income (UBI) is that it would reduce poverty and income inequality. Yet UBI advocates often overlook a range of other potential benefits. Digital UBI payments can bring people into the financial system and build their financial capability, unlocking a range of development benefits for citizens and governments alike. Take Mongolia for example. In 2014, 92 percent of adults had a bank account—by far the highest share in the developing world. (By comparison, only 43 percent of adults are banked in similar lower-middle income countries.) Young adults, a population often financially disenfranchised, see some of the most impressive usage of financial services; account ownership among Mongolians aged 15-24 years old is 93 percent. Smart policies, digital payments, and greater inclusion of traditionally marginalised groups all helped Mongolia achieve nearly universal account ownership. The Mongolian Human Development Fund (HDF) distributes revenues from the mineral and mining sectors with the objective of redistributing wealth. A flagship program funded by the HDF is the Child Money Program (CMP), launched in 2012. As part of CMP, the government makes monthly electronic deposits into savings accounts opened in children’s names, helping to ensure that all Mongolians will eventually be banked. The program pays about $10 a month to all children aged 0 to 17, thus ensuring that the parents of every newborn open an account in their child’s name. Alongside South Africa, Mongolia has one of the developing world’s largest shares of adults receiving government transfers—35 percent—with two-thirds of these payments made directly into bank accounts. Seventy percent of account owners in Mongolia make or receive any payment through their account, while in East Asia and the Pacific as a whole the share is 50 percent. These accounts […]

What China’s soccer spending teaches us about globalisation

On 4 June 2002, the national football team of the People’s Republic of China took to the field for its first ever match in the FIFA World Cup. For the few thousand Chinese fans in the stadium, and the 500 million or so watching at home, the fact the team had made it there at all was considered the greatest accomplishment in China’s football history. ‘The Great Wall’ would go one step further if they were able to score a goal during the tournament. They didn’t. Playing against Costa Rica, Brazil (the eventual tournament winners) and Turkey, China finished bottom of their group and conceded nine goals. They haven’t been back to a World Cup since. Failing to qualify in 2006, 2010 and 2014, the team could still make it to Russia in 2018 – but even if they don’t, there’s still plenty of time for China to realise its ambition of winning a World Cup by 2050. If they were to achieve that lofty goal – some cynical followers of the England national team might even bet on China lifting the trophy before the Three Lions do so again – they would very likely be thanking their current President, Xi Jinping. A professed football lover, President Xi wants the country to become a global leader in world football, and has pledged the money to make it happen. This includes setting up soccer academies, hiring coaches from abroad, and even offering citizenship to foreign players. But Chinese football fans might also be thanking globalisation. Globalisation, the process by which markets, people, goods and culture become more integrated, is already exemplified in European football. The Dubai-based airline Emirates sponsors some of history’s most decorated teams, including in England, Spain and France. More than 20% of Premier League teams are run by American owners, and over […]

Climate change plays havoc with Pacific weather

Climate change is already delivering more extremes of wet and dry to the Pacific region. AUTHORS: Scott B. Power,Head of Climate Research/International Development Manager, Australian Bureau of Meteorology; Brad Murphy Manager, Climate Data Services, Australian Bureau of Meteorology;Christine Chung, Research Scientist, Australian Bureau of Meteorology; François Delage Assistant scientist, Australian Bureau of Meteorology; Hua Ye, Climate IT Officer, Australian Bureau of Meteorology This research was supported by the National Environmental Science Programme and the Australian Climate Change Science Programme. Global warming has already increased the risk of major disruptions to Pacific rainfall, according to our research published today in Nature Communications. The risk will continue to rise over coming decades, even if global warming during the 21st century is restricted to 2℃ as agreed by the international community under the Paris Agreement. In recent times, major disruptions have occurred in 1997-98, when severe drought struck Papua New Guinea, Samoa and the Solomon Islands, and in 2010-11, when rainfall caused widespread flooding in eastern Australia and severe flooding in Samoa, and drought triggered a national emergency in Tuvalu. These rainfall disruptions are primarily driven by the El Niño/La Niña cycle, a naturally occurring phenomenon centred on the tropical Pacific. This climate variability can profoundly change rainfall patterns and intensity over the Pacific Ocean from year to year. Rainfall belts can move hundreds and sometimes thousands of kilometres from their normal positions. This has major impacts on safety, health, livelihoods and ecosystems as a result of severe weather, drought and floods. Recent research concluded that unabated growth in greenhouse gas emissions over the 21st century will increase the frequency of such disruptions to Pacific rainfall. But our new research shows even the greenhouse cuts we have agreed to may not be enough to stop the risk of rainfall disruption from growing as […]

The environment needs billions of dollars more: here’s how to raise the money

Paul Martin Director, Australian Centre for Agriculture and Law, University of New England Amy Cosby Researcher, Centre for Agriculture and Law, University of New England Kip Werren Lecturer in Law, University of New England Extinction threatens iconic Australian birds and animals. The regent honeyeater, the orange-bellied parrot, and Leadbeater’s possum have all entered the list of critically endangered species. It is too late for the more than 50 species that are already extinct, including bettongs, various wallabies, and many others. Despite international commitments, policies and projects, Australia’s biodiversity outcomes remain unsatisfactory. A 2015 review of Australia’s 2010-2050 Biodiversity Conservation Strategy found that it has failed to “effectively guide the efforts of governments, other organisations or individuals”. Insufficient resourcing is one cause of biodiversity loss. The challenge is impressive. Australia must tackle degradation and fragmentation of habitat, invasive species, unsustainable use of resources, the deterioration of the aquatic environment and water flows, increased fire events, and climate change. This all requires money to support private landholders conducting conservation activities, to fund research, to manage public lands, and to support other conservation activities conducted by governments, industry, and individuals. So where can we find the funds? How much money is needed? We have estimated that Australia’s biodiversity protection requires an equivalent investment to defence spending – roughly 2% of gross domestic product. Of course, such estimates are up for debate given that how much money is required depends on what we want the environment to look like, which methods we use, and how well they work. Other studies (see also here and here point to a similar conclusion: far more money is needed to achieve significantly better outcomes. Apart from government funding, private landholders, businesses, communities, Indigenous Australians, and non-government organisations contribute significantly to natural resource management. We were unable to quantify […]

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Saturday in the park

The women’s march in Washington and in other American cities and towns was focussed on messages for a better way of being for all people. Around the world they marched as well and, by golly, The Donald, sitting in The Whitehouse must have wondered what the next four years will be like. Totally lacking in credibility with all the charisma of a snake salesman, The Donald has somehow become the most powerful, single individual on the planet. Although I am wondering how many people will actually believe that to be true. The position is the power and The Donald can’t be left alone with any switches! They say that the only thing to change in the U.S. since 1968 until now has been the years of Obama’s presidency. Everything else has been business as usual for the decisionmakers who hold the balance of power, control the money and have only been threatened by civil rights actions and marches against the Vietnam war. That’s getting to be a long time ago if you are really serious about change and fairness for all people With interest, we can follow if the weekend marches will bring about a new energy to the people, the Democratic party and the betterment of society. Can action now take place that brings about real change? Or was it just another stroll in the park? We can also be part of the change. -Doug Green, Publisher

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