Innovation & chaos ... in search of optimality

Created by: Online Graduate Programs

How can we create ‘good jobs’?

This is the most urgent question New Zealand, America and all other nations face. According to Jim Clifton, the answer lies in the spirit of free enterprise — not central or local government policy-making.

In my opinion, this book should be compulsory reading for all political candidates and all those public servants busily preparing ‘Briefings to the Incoming Minister’ due for delivery after the forthcoming November election!

In his book ‘THE COMING JOBS WAR’, Gallup Chairman Jim Clifton argues that job creation happens when start-ups and young companies flourish in cities. Local and central government can assist job creation, but Clifton argues that primary attention should focus on local business and city leaders. He advocates these leaders must:

• Invest in entrepreneurs, not innovation
• Double the number of engaged employees
• Encourage small-business start-ups
• Be smarter at winning global customers than anyone else
• Put prevention at the centre of healthcare policy
• Wage war on the school dropout rate

The cities and countries that act first — that focus everything they have on creating good jobs — are the ones that will win.

Invest in entrepreneurs, not innovation. Reason: it is entrepreneurs (and intrapreneurs) who grow existing businesses and start new businesses. It is their businesses that create the wealth from innovation, research, and science. Furthermore, it is the wealth creation from these businesses that enables more people to be employed in ‘good jobs’, redeployed from low-contribution under-employment and unemployment, and enables re-investment in innovation and growth. A virtuous circle.

Double the number of engaged employees. Reason. Engaged employees add value to both new and existing customers through their creative response to customer needs. They help a business grow sales revenues, profits, and support the commercialisation of innovative ideas.

Encourage small-business start-ups. Reason: Most employment growth arises from start-ups and the growth of small-medium enterprise. Large businesses are often large employers, but they are not the source of employment growth.

Be smarter at winning global customers than anyone else. Reason: In New Zealand, we will never have the local market that provides the scale for supporting the specialised businesses we need to create for the jobs we need (See earlier postings on this blog by Paul Callaghan). America’s automobile industry rested on its laurels for decades whilst Japan, Europe, and Korea improved their product performance, process technologies, and productivity. The decline of Detroit and bankruptcy of well-known American motor companies was the result.

Put prevention at the centre of healthcare policy. Reason: Gallup’s data provides support for substantial deployment of ‘behavioural economics’ to reward those people who improve their health status and thereby work productivity through personal attention to diet and exercise.

Wage war on the school dropout rate. The recent report from the New Zealand Planning Institute (Boven et al, 2011)  highlighted how our country’s dysfunctional educational system fails in terms of both relevancy to emerging workplace skill requirements, and student engagement in the educational process. Both facets are crucial in providing young job-seekers with the correct skills with the correct talents and attitudes to undertake a ‘good job’.

What is a ‘good job’?

A ‘good job’ is a job in the formal economy. It is a job with security, with a pay check, good prospects, and a manager willing and capable of developing your job engagement and talents. A full-time good job is thirty hours or more.

Why do we need to create ‘good jobs’?

There are several reasons:

• There is a world-wide shortage of ‘formal jobs’. The shortage is estimated by Gallup to be 1.8 billion jobs. Currently, just 1.2 billion of the world’s 7 billion people possess formal jobs. See Figure 1.
• ‘Good’ formal jobs give rise to: improved income per capita; improved customer satisfaction, market growth, and profitability; and innovation.
• Persistent underemployment and unemployment reduces personal wellbeing, physical health, and reduces net national tax revenues. Excessive underemployment leads to social unrest, chaos, and ultimately revolution.
• If we fail to grow the number of good jobs in our business, or our city, then our most skilful and enterprising job-seekers and business builders will relocate else where. That relocation will contribute to a vicious downward spiral of rising unemployment, declining taxes and rates, and city-wide decline.

Figure 1: Distribution of available and required jobs (world-wide, billions of people). Based on Clifton, 2011.

The book Clifton, J. (2011). The Coming Jobs War: What every leader must know about the future of job creation. Gallup Press. http://gmj.gallup.com/content/147848/Coming-Jobs-War.aspx
Related articles

• Conversation with Jim Clifton, CEO of Gallup Organization: Part 1 (zanesafrit.typepad.com)
  Deepak Chopra: Why People Need Good Jobs (huffingtonpost.com)
  Jim Clifton, Author of The Coming Jobs War, Interview: Part 2 (zanesafrit.typepad.com)
  Jim Clifton, Author of The Coming Jobs War, Interview: Part 3 (zanesafrit.typepad.com)
• Cities: Where Good Jobs Are Created (corpperformance.wordpress.com)
• The Coming Jobs War (800ceoread.com)
• It Looks the Same but Something Has Changed (firedoglake.com)
• Students Want to Become Business Owners But Lack Training (usnews.com)

References Boven, R., Harland, C., & Grace, L. (2011). More ladders, fewer snakes: Two proposals to reduce youth disadvantage ( No. Discussion Paper 2011/1). Auckland, N.Z.: The New Zealand Institute. Retrieved from http://www.nzinstitute.org/index.php/ownershipsociety/paper/more_ladders_fewer_snakes_two_proposals_to_reduce_youth_disadvantage?utm_campaign=More+ladders%2C+fewer+snakes%3A+Two+proposals+to+reduce+youth+disadvantage&utm_medium=Email&utm_source=Mailout

Mellalieu, P. J. (2011, May 25). Sustainable economic growth for New Zealand: An optimistic myth-busting approach [Review of presentation by Sir Paul Callaghan]. Innovation & chaos … in search of optimality. Retrieved May 31, 2011, from http://pogus.tumblr.com/post/5810100473/sustainable-economic-growth-for-new-zealand-an
Courses at Unitec BSNS 5391 Innovation and entrepreneurship
BSNS 5550 Maori and Pacific Business