“Everyone, whether they are blue-collar, white-collar, back office, middle office or front office will need to embrace a lifelong learning mantra.”
In 1970, the most common profession in the world was the typist. The advent of the desktop computer disrupted the typewriter, and the typist was extinct by the late 1990s. However, those who reskilled as computer literate secretaries continued to be employed.
In 2018, Arowana is working with RPA (robotic process automation) specialists to introduce robotic process automation software and tools into our companies. RPA will help them process menial, repetitive tasks faster, with zero errors and at much lower costs. In one case, an accounts payable robot can process in one hour what a human being can process in one week. The cost of this robot (who can also automate tasks in accounts receivable, payroll, management, and financial accounting) is less than US$15,000 per annum. For average small and medium sized enterprises (SME) in Australia, this potentially delivers savings of between US$250,000 to US$400,000 per annum.
Whereas it took 30 years for the typist to become completely redundant, Arowana’s view is that the robots and artificial intelligence tools of the Fourth Industrial Revolution will render a significant number of today’s occupations redundant within the next 10 years.
So why is this relevant to vocational and professional education and training (VPET)?
In March 2018, I attended a conference in Singapore, where the chairwoman of Bain & Co., Orit Gadiesh was a keynote speaker and was asked what the single biggest problem was facing businesses globally today. She nominated vocational education, referencing the fact that many employers are already struggling with a “skills gap” issue, despite there being a record pool of tertiary-educated graduates. As a result, youth unemployment and underemployment are a big issue in many OECD countries. Gadiesh talked about how the robotics, automation, and AI revolution combined with an aging population (where more skilled workers are retiring) will further compound the skills gap problem and pose a serious threat to a nation’s economic standing and prosperity. We concur with her that the solution to these issues is an effective, flexible, and agile VPET system. Furthermore, everyone will need to borrow a leaf from the world’s greatest learner, Tim Ferris, and embrace lifelong learning to stay relevant. In a rapidly automating world, the rate of knowledge decay is going to escalate, and everybody’s knowledge and skills “half-life” will become shorter and shorter. Professor Boris Groysberg of Harvard Business School estimates this to be 6% per annum. This means that everyone, whether they are blue-collar, white-collar, back office, middle office, or front office will need to embrace a lifelong learning mantra.
For the sake of clarity, vocational education and training (VET) encompasses the cohort of students who do not pursue an academic tertiary education following completion of compulsory schooling but instead pursue trades and technical training. On the other hand, professional education, and training (PET) cover the cohort of students who are already workers but are seeking to reskill and/or upskill through continuing education, often on a part-time basis. We have combined these two and called it VPET as it deals with the same issue: the need to embrace lifelong learning to stay relevant.
Gadiesh also talked about how existing education models, as well as government and societal mindsets need to change―to be more agile, more flexible, and more egalitarian with regards to non-tertiary education pathways. We also agree with this, given that a structural capability to rapidly reskill displaced employees so that they can be re-employed quickly is going to be vital for productivity, competitiveness, and social cohesion.
Importantly, we believe that to solve the skills gap problem and future-proof students and workers alike for the Fourth Industrial Revolution, there must be a focus on equipping students and workers with relevant skills first, and qualifications second. Effective VET tends to result in a faster transition into the workplace and countries that have it at the core of the curriculum such as Switzerland, Germany, and Denmark have been successful in maintaining low youth unemployment rates. Furthermore, augmenting an effective VET model with a practical PET model will provide a platform to close the skills gap and enable lifelong learning.
In this three-part series on VPET, we will provide an overview of the key VET models practiced globally and share our perspectives on what is the “gold standard” model for delivering VET.
We will also reflect on our experience of successfully scaling up and exiting via IPO a US$200m vocational education business, Intueri Education Group (Intueri). However, Intueri does not exist today because of abrupt changes to government regulation in Australia and New Zealand that triggered the breakup and sale of the group. We share the lessons we learned from this and how we are applying these lessons with regards to strategy and execution for EdventureCo, our new VPET platform.
We are proud to announce that Arowana International (Arowana) has successfully attained Certified B Corporation ® (B Corp) status.
B Corps are for-profit companies certified by the non-profit Philadelphia-headquartered B Lab body to meet rigorous standards of social and environmental performance, accountability, governance, and transparency.
The B Corp movement has gathered increasing momentum with the number of companies joining its ranks, growing 44% annually over the past five years. Today, there are over 2,500 Certified B Corps around the globe, including Danone, Patagonia, Laureate Education, Ben & Jerry’s, Etsy, Hootsuite, and Singularity University. On the ASX, there are currently only four B Corps, namely: Silver Chef, Australian Ethical, Murray River Organics, and now, Arowana. We are proud to join this group in broadening the definition of business success to go beyond shareholder value maximisation and encompass delivering long-term sustainable value creation to all key stakeholders.
To attain B Corp certification, Arowana and its operating companies underwent a rigorous and detailed due diligence review of several key business areas over a period of 15 months. These areas include:
Arowana has a long-term commitment to building strong, sustainable businesses that will have a positive impact on economies, industries, and the people they employ. Importantly, we understand that the work we do benefits more than the bottom line and we always strive to consider the wider impact of our actions. We want to see businesses and economies grow in a sustainable way and in doing so create value for our stakeholders. This aligns with our purpose of growing people, growing companies, and growing value.
About B Lab
B Lab is a non-profit organisation that serves a global movement of people using business as a force for good. Its vision is that one day all companies compete not only to be the best in the world, but the Best for the World® and as a result, society will enjoy a more shared and durable prosperity.
For more information, visit www.bcorporation.net
At Arowana, we consider it of upmost importance that our people not only stay relevant but also have skills and experience that are future-proofed to be able to help our companies to scale up, not just now but sustainably.
Dr Tara Swart is a member of our Advisory Board who is working with our team to optimise our mental resilience and agility.
We continually invest in best-of-breed learning programmes that cover leadership, technology, marketing, data science, and finance, among other disciplines. We want our people to be independent, outside-the-box thinkers, and in this regard, we encourage them to learn disciplines beyond their core competencies. We encourage our team to be curious and to be lifelong learners.
TRANSCRIPT
Dr Tara Swart:
At Arowana, we consider it of upmost importance that our people not only stay relevant but also have skills and experience that are future-proofed to be able to help our companies to scale up, not just now but sustainably.
Dr Tara Swart is a member of our Advisory Board who is working with our team to optimise our mental resilience and agility.
We continually invest in best-of-breed learning programmes that cover leadership, technology, marketing, data science, and finance, among other disciplines. We want our people to be independent, outside-the-box thinkers, and in this regard, we encourage them to learn disciplines beyond their core competencies. We encourage our team to be curious and to be lifelong learners.
TRANSCRIPT
Dr Tara Swart:
At Arowana, we consider it of upmost importance that our people not only stay relevant but also have skills and experience that are future-proofed to be able to help our companies to scale up, not just now but sustainably.
Dr Tara Swart is a member of our Advisory Board who is working with our team to optimise our mental resilience and agility.
We continually invest in best-of-breed learning programmes that cover leadership, technology, marketing, data science, and finance, among other disciplines. We want our people to be independent, outside-the-box thinkers, and in this regard, we encourage them to learn disciplines beyond their core competencies. We encourage our team to be curious and to be lifelong learners.
Find out more about Dr Tara Swart's work with Arowana in the AFR BOSS article below.
The team at Arowana have been working with Advisory Board member, Dr Tara Swart, a Neuroscientist and Leadership coach over the past week. Our diets have been recorded and our heart rates monitored with the aim of helping us achieve peak brain performance and mental resilience. With a mantra for lifelong learning, this is just one of the ways we help our people grow and future-proof our team and businesses.
Competition seems to be inherent to business and the market, but in today's technology-disrupted landscape, businesses would do well to consider collaborative competition. Also known as co-opetition, collaborative competition offers a unique approach to strategy: by collaborating with your competitors, you can reap mutual advantage and grow the value of your business. By understanding how co-opetition works in practice, you can make use of this strategy when the opportunity arises.
What's co-opetition and why is it important?
Co-opetition involves agreeing with an otherwise rival business for mutual advantage. This strategy of collaborative competition allows you and your competitor(s) to reap benefits through, for example, product enhancement and market expansion.
Co-opetition can be a vital strategy for businesses struggling in the current economic landscape, in which consumers are highly educated about goods and services. In the past, the zero-sum-game approach to competition meant selling the same quality goods and services at a lower price, and this allowed you to beat out the competition. However, in today's highly networked, information-dense marketplace, competition is increasingly between networks and ecosystems rather than individual companies.
For forward-thinking organisations, this is an opportunity. By bypassing the traditional confrontational competitive approach and instead building collaborative networks with your competitors, you and your new partners can enhance the overall value of your businesses by growing the overall economic pie.
Forms of co-opetition
Examples of co-opetition include sharing technological intellectual property, joint R&D schemes, shared distribution channels, merged production capacity, marketing campaigns, and even back-office capabilities. The goal of these initiatives is to grow the total value of your companies and so increase the value of individual firms. However, it could also strengthen your collective market share and prevent new entrants from gaining a foothold in the sector.
Giants like Amazon are early adopters of the collaborative-competition approach. Through initiatives such as Amazon Marketplace, Amazon Web Service, and Apple partnership, Amazon has been empowered to build platform businesses. This broadening addressable market has enabled Amazon to grow its capacity as an individual firm and expand its list of revenue streams.
Three key ways co-opetition enhances company value
The following three ways are possible ways co-opetition can drive higher company value.
1. Innovation
The right co-opetition initiatives can drive more efficient innovation, and Sony's partnership with Samsung is a great example. Although fierce rivals, the two technology hardware multinationals engaged in a joint venture to share technology and manufacturing capacity in South Korea. Sony brought to the joint venture its technological know-how, while Samsung contributed its production and marketing expertise. The outcome was lower production costs, increasing technological improvements, and both companies enjoying a leadership position in the LCD-TV segment.
2. Expand addressable markets while transforming growth trajectory
Collaborative competition enables firms to grow their addressable market and, in the process, change their growth trajectory for the better. Instead of focussing your resources on eliminating competitors, organisations can direct more attention to redesigning their business models to enlarge potential markets.
For example, in the Sony-Samsung case, the two firms were able to lower costs and focus on servicing the lower-priced LCD-TV market. This allowed them to expand the number of consumers who could afford their cheaper TVs.
In expanding your addressable market, you could reduce the likelihood of new entrants gaining market share at your expense. At the same time, the widening addressable market boosts the potential growth trajectory of all firms in the sector.
3. Higher valuation multiples and profit margins
A co-opetition strategy could lead to higher valuation multiples as well as maintaining or raising profit margins. Consider the reversed scenario where years of price-based competition has led to razor-thin price margins and goods and services that are effectively commodities. Come trade-sale or IPO time, these firms will achieve valuations that are much lower than those in high-profit-margin sectors.
On the other hand, if firms can maintain or grow their profit margins through smart co-opetition, they could, for example, re-engineer themselves into platform businesses and obtain a much higher valuation.
In a highly networked, information-dense marketplace, firms should look to new strategies like co-opetition to stay competitive. Though it can appear counterintuitive, collaborative competition could be the key to maintaining or growing your profit margins. By successfully working with your competitors, you could boost innovation, expand your addressable market, and achieve a higher valuation for your business. Arowana is an operator of small and medium-sized companies and specialist asset manager. To find out more about how we work with entrepreneurs and leadership teams to grow strong, sustainable businesses, explore our website or contact us for a discussion today.
The Board of Arowana International Limited (ASX: AWN) is pleased to announce the appointment of Mr. Eduardo (Ed) Fernandez as a Non-Executive Director, commencing on 2 April 2018.
Ed has subject matter expertise in the areas of artificial intelligence and machine learning and extensive practical experience in the application of such tools to help companies to scale. Importantly, Ed shares the same entrepreneurial spirit and core values of Arowana, and his domain expertise will help us to deliver on our strategy to future-proof and scale up our various operating companies and investment funds. His engineering background complements the existing skills of the Board, which comprise legal, software, technology, accounting, and corporate finance experience.
Ed’s appointment retains a 3:1 ratio of Non-Executive to Executive Directors on the Board. It is also part of the Board’s succession planning, with the Honourable John Moore AO retiring from his position as a Non-Executive Director on 30 June 2018. John has been a board member across various Arowana businesses since our inception in 2007 and will remain on other Arowana related Boards that are Australian-based, including the Arowana Contrarian Value Fund (CVF).
Arowana would like to thank John for his contribution to AWN over the years and look forward to continuing to serve with him on other local Boards.
The cost to build solar has declined so substantially that it is now economically superior to pursue renewable energy strategies. Find out how Arowana is taking part in the clean energy sector globally.
Investing in solar (Part 3 of 3)
TRANSCRIPT
Tony Seba: Nothing will be able to compete with solar come 2020, nothing! That's why an investor wants to get into because you have 100x to grow and that's gonna happen very quickly. It's going happen in 13 years, at this point by 2030 is pretty much over.
Rahim Chunara: The cost to build solar has declined so substantially that it's now far more economically superior to pursue renewable energy strategies.
Tony Seba: Every residential user, every commercial user, every factory, every mall, will have their selfish best interest in mind when they adopt solar. So, because basically self-generation will always beat central generation because of the cost of transmission. So that's when the tipping point is going to happen.
Rahim Chunara: It's from the sun. It's running all day, it's cheap and it's essentially free, in terms of sunlight and solar is an unbelievably efficient and simple form of power generation to build.
Tony Seba: Solar has been doubling, the infrastructure, the installed base every two years since 1994. So, I see an acceleration of the adoption of solar power starting around 2019-2020 and accelerating. And by 2030 it is pretty much over.
The countries that delay their shift to clean energy will be stuck with a more expensive, dirtier, and unhealthy infrastructure for energy generation. Find out how Arowana is taking part in the clean energy sector globally.
The dangers of delay… (Part 2 of 3)
TRANSCRIPT
Tony Seba: The countries that delay the energy disruption are essentially making their people poor. Essentially, they're saying you're gonna be stuck with a more expensive, dirtier, and unhealthy infrastructure for energy generation.
Rahim Chunara: After some time, we're really gonna miss out because the rest of the world is moving forward and it's important for us to embrace things which are cheaper and more efficient.
Tony Seba: So, there's no reason why you should build a coal plant, there's no reason even today. Unsubsidized solar is already the cheapest form of energy.
Rahim Chunara: Environment and the world climate is very important, but this is a story of economics as well.
Carl Weatherley-White: There's nothing more secure than power from the sun. We don't import it; it costs nothing and if we can turn that power of the sun into electricity at a low cost, we've solved many of the security questions that people have. So, I think rather than be a problem for energy security, solar is really the answer.
