Catherine Livingstone, chair of the Business Council of Australia, has joined the ranks of those heralding the Internet of Things as a bigger force for disruption than the Internet, in an address to the National Press Club, an edited version of which appeared in the Financial Review. (Livingstone is also chair of Telstra, but the FR did not acknowledge this role in the article).
She said: “We thought that the connectivity enabled in the mid-nineties by the fixed line Internet and browser technology was disruptive; that was before 2007, when the mobile Internet became a reality with the first smartphone. But that is nothing compared with the disruption we will see with the advent of the ‘Internet of Things’.”
In justification she use the oft-cited forecast: “By 2030 there may be 50 billion devices connected to the internet, and the average home is expected to have more than 20 such devices.”
She went on explain that this connectivity was disruptive: “Because innovation happens most powerfully at the interface. The more interfaces, the greater the potential for innovation; and the more connectivity the more interfaces.
“These interfaces can be human-to-human, human-to-machine, and now even machine-to-machine. Connectivity is changing the power relationships between consumers and companies; it is fragmenting supply chains and disrupting business models.”
As one example she cited: “In America, 40 percent of the work force of 53 million people, are now freelancing through new business models like Airbnb, Airtasker and Uber.” That did not sound right, unless you take a view much broader than the tradition of ‘freelancers’. So I checked up and sure enough it’s not, according to what is claimed to be “The most comprehensive measurement of [the US] independent workforce in a decade.” The study “Freelancing in America: A National Survey of the New Workforce,” published in September 2014 was conducted by the independent research firm Edelman Berland and commissioned by Freelancers Union in partnership with Elance-oDesk.
First off the number of freelancers currently is 53 million, that’s not the figure for the total US workforce. Secondly it represents 34 percent of the total workforce, not 40 percent and, not surprisingly, it includes all of the following.
Independent contractors (40 percent of the independent workforce / 21.1 million professionals) – These ‘traditional’ freelancers don’t have an employer and instead do freelance, temporary or supplemental work on a project-to-project basis.
Moonlighters (27 percent / 14.3 million) – Professionals with a primary, traditional job who also moonlight doing freelance work. For example, a corporate-employed web developer who also does projects for non-profits in the evening.
Diversified Workers (18 percent / 9.3 million) – People with multiple sources of income from a mix of traditional employers and freelance work. For example, someone who works the front desk at a dentist’s office 20 hours a week and fills out the rest of his income deriving for Uber and doing freelance writing.
Temporary Workers (10 percent / 5.5 million) – Individuals with a single employer, client, job or contract project where their status is temporary. For example, a business strategy consultant working for one startup client on a contract basis for a months-long project.
Freelance Business Owners (5 percent / 2.8 million) – Business owners with between one and five employees who consider themselves both a freelancer and a business owner. For example, a social marketing guru who hires a team of other social marketers to build a small agency, but still identifies as a freelancer.
In other words, ‘traditional freelancers’ account for only about 14 percent of the total workforce and those who, in many cases out of necessity, have multiple jobs and/or temporary work account for over 15 million. Interesting the examples quoted are not those of low paid and unskilled workers but of skilled professionals: “a corporate-employed web developer who also does projects for non-profits in the evening,” “someone who works the front desk at a dentist’s office 20 hours a week and fills out the rest of his income deriving for Uber and doing freelance writing,” and “a business strategy consultant working for one startup client on a contract basis for a months-long project.”
And while the press release on the study described ‘moonlighters’ as being ” Professionals with a primary, traditional job…” the detailed study results stated that this represented 14.3 percent of “all workers with a primary employer.”
This a very different situation from Livingstone’s claim that 40 percent of the US workforce is “freelancing through new business models like Airbnb, Airtasker and Uber,” but the question she asks is valid nonetheless: “What is this doing to patterns of demand where income security is uncertain and long-term expenditure commitments cannot be made?” She lists a few examples, saying: “No business model is immune from impact.”
– Growing momentum in the sharing economy
– Machines are now learning
– Google announcing that its search algorithm will prioritise ‘mobile friendly’ websites
– Seventy percent of global trade now in intermediate goods and services and capital goods, not in finished goods.
Her central point is: “Given the disruption of a hyper-connected world, many of our policy settings are simply not fit for purpose. They have exceeded their design tolerance limits.”
Unfortunately Livingstone gave no indication as to where the policy shortcomings lay or what direction they should take.
A blog post on IoTAustralia from Jennifer Mulveny, director of cloud policy and government relations for Intel Australia/NZ also flagged the need for policy change for the IoT era and while it did not canvas a full range of issues it did make some suggestions; “Governments need to collaborate with industry so they can identify the most pressing social problems, such as population growth, and work with the experts on what is technically possible in a one, three, five or 10 year timeframe. … When it comes to policymakers pondering the regulation of IoT, it is critical that there is a sensible balance between oversight and overregulation.” It also noted “The US Congress recently held hearings on a bipartisan resolution calling for a national vision for IoT.”
Australia needs something similar, and it would have been helpful if Livingstone could have concluded her commentary with some definite suggestions along these lines.