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He begins
by describing all the economic forecasts post the 9/11 disaster,
and how most of them did not make sense, consisting mostly of
double-talk, and some just plain silly.
His conclusion "no one really knows what is going on out
there" .
He then sets
out to give his own construction of the economy, and what may
lie ahead, noting that business focus on technology indicates
that the US economy has now moved from the industrial era to the
technological era, and that few businesses fully understand what
that means.
For example, the buildup to the recent war in Iraq was thought
by US business to be able to turn a sagging economy around.
What was not understood was that with robotic assembly lines you
do not need to hire thousands of people to help underutilised
robotic assembly lines--you simply speed up the robots!
Simple thinking, but management perspective is often blunted when
you are too close to the assembly line, and you don't take the
time to look outside the square.
Australian pharmacists, please note that you may be in exactly
the same position, and may need to stop to re-orientate yourselves.
Bushko elaborates further and attacks the goal planning of universities
that plan for new buildings, because they are running out of space.
This is not considered the right response for the technological
era, or in instances where there are projected declines for future
student enrollments.
He argues that these institutions should be moving to online sites,
where it is possible to handle unlimited numbers of students,
while expanding their appeal globally at a minimal cost.
It is also one way of delivering a tertiary education at an affordable
cost to a student.
Australian universities are currently rethinking the way they
charge for their services, but it seems to the casual observer
that it is being done in such a way as to cause increased fees
to students.
It is thought that only students from wealthy families will be
able to pay the new fees, with murmurings of "underclasses"
being formed at a greater rate, as poorer students find their
way barred through these financial restrictions.
Perhaps Australian universities need to align with Bushko's thinking?
The "chilling" part of the author's dissertation is
in redefining economic principles in the framework of the shift
into the technological era.
He starts by defining "productivity" in the old industrial
economy as simply meaning to get humans to produce more at a faster
rate.
The same word in the new technological economy means replacing
human labour completely.
This shift
in economic fundamentals means that humans permanently lose their
jobs, and once a job is lost to technology, it never comes back.
While technology does create new jobs, they are generally "only
for the technologically inclined, the low salaried employee, and
the superstar. Everyone else becomes fundamentally useless."
This effect
is not tied to just one level of employee: blue collar, white
collar and executive employees are affected equally, because technology
allows consolidation on a very large scale.
Thus larger
and more disparate companies can be managed by fewer executives
and managers.
Australian pharmacists should consider this point.
We are seeing more technology entering pharmacy establishments
at the same time as there is a severe shortage of pharmacists.
Technically, if we apply Bushko's logic, there should be a point
in time where technology displaces enough human labour (including
a pharmacist's), that it becomes possible for a smaller group
of people to manage a much larger business entity i.e. the working
environment becomes more stable and tenable.
This is one reason why pharmacists should embrace corporate structures
as well as technology, to protect themselves and facilitate the
growth that will emerge from this process.
The fact is that your major competitor (Woolworths
Pharmacy Service) is so far down the track in technology innovation,
you may never catch up.
This process enables organisations such as Woolworths to crush
competitors, or grow at a faster rate through mergers and takeovers.
It also enables them to develop stores in areas with a lower population
base, because of their low cost operation.
So there is no respite for pharmacy in remoteness, which was once
thought as being secure.
The cycle of depletion in Australia's rural/remote areas will
also begin to turn in the opposite direction as technology overcomes
the tyranny of distance.
Through remote management systems corporations will be able to
extend their reach.
In pharmacy, we are already seeing the development of remote dispensing
machine technology, which Woolworths would love to own and control;
also in medicine, the "telemedicine" remote control
diagnostics is already a proven success.
When large companies displace employees through technology, these
people tend to move into smaller companies, until those companies,
are in turn, swallowed up by the larger companies.
This means the pool of unemployed executives, managers and employees
down the line gets larger, as time goes on, and this is evidenced
by the growth of networking and support groups for executives.
The next step
in the process is that a section of this unemployed pool becomes
"self employed" through contracting or consulting. Large
companies tend to want to only engage full time employees if they
are young and cheap.
With the gaps left through youthful inexperience, companies draw
from the "self employed", generally paying on a results
only basis.
However, the quality of the work deteriorates for the self employed,
because companies tend to keep the "thinking, analysis and
strategising" components, and only farming out the less fulfilling
work.
It also means that the work contracted out tends to be more short-term,
and that an individual may have to take on multiple tasks more
frequently, to survive economically.
As the unemployed
pool gets incrementally larger, the competition for this outsourced
work becomes more intense, resulting in discounting and diminishing
returns on effort invested.
Bushko
describes this as a "self-devouring economy, where the system
grows by devouring the consumer potential for which it has been
implemented."
The point
he is making is that if the fundamental aim of the system is to
eliminate human work, where do humans get money for food, clothing,
shelter and other needs?
Following the thinking further, as consumers deplete in number
or in disposable income, corporations begin to "deep discount"
their products and services, which extends survival but eliminates
growth.
As prices fall, so do salaries.
So the question
for the not too distant future is, how will Australia develop
a strategy to maintain the "good life" and to reverse
the disparity between the rich and the poor, which results from
this introduced technology?
This trend is definitely firming up within Australia and other
developed economies.
Are we to remain "The Lucky Country?"
Bushko has
searched for solutions to all the above, and no one has yet come
forth with the answers.
His suggestion is that a new welfare state may be just on the
horizon, one in which everyone below a certain salary level is
given a "living wage" to spend, to keep driving the
economy.
Meanwhile, there appears to be no other alternative for Australian
pharmacists, for the moment, except to embrace the new economy
to at least insulate yourself for the intermediate term, extend
your market catchment by developing a global strategy on the Internet,
and to learn to manage all elements of your business through the
use of technology.
Then hang on and hope some economist comes up with a solution
to the "self-devouring economy".
As someone once said: "Life wasn't meant to be easy".
Footnote:
I have just left the evening news program on our local television
channel.
One of the lead stories was how the number of people going below
the poverty line was sharply increasing.
A union spokesman said the problem could be "fixed"
with an increase in wages and the restoration of full-time jobs.
How far down the "self-devouring" economy are we here
in Australia?
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NEIL
JOHNSTON