South Australia faces “a clear and present danger” of eroding its intellectual capital if the best and brightest young people continue to migrate to the eastern States, according to kwp!’s Strategy Director David O’Loughlin.
O’Loughlin says it’s time for a cultural shift in South Australia in which people stop looking to Government to solve problems and start investing in the State’s human capital, even if it comes at a the cost of a short-term reduction in business profits.
Business InSight approached the five senior executives who participated in Business SA’s recent ‘Back to Business’ forum and asked them to address the question: ‘What keeps you awake at night?’
David O’Loughlin’s view was emphatic: we must stop the brain drain to the eastern states.
“It strikes me that there has been a lot of rhetoric but not a high priority about creating a business environment in South Australia that young people can walk into once they leave university,” O’Loughlin told Business InSight.
“What these young graduates are automatically thinking now is that their only options are interstate. That movement of people is a clear and present danger to our future. It troubles me greatly, and is the thing that keeps me awake at night,” he said.
“I think there has been a focus for a long time in the South Australian community, be it business or otherwise, on how is the Government going to solve this problem? The Government can’t and won’t solve it while it has such a heavy burden of responsibility to the public sector.
“The private sector has to start creating the opportunities, even if doing so places an extraordinary burden on their profitability in order to generate the chance for young people to work in a business environment in South Australia.”
Reflecting on Adelaide and drawing on his experience of living in innovative and successful cities in the US, UK and Canada, and Sydney and Melbourne, O’Loughlin suggested the State had “an unusual profile of board and management that seems to be fairly top heavy when it comes to the boomer generation, and I notice fewer Gen X and virtually no Gen Y in positions of influence, particularly on boards in South Australia”.
“So I think that creates an environment where there is less emphasis and less reward for new thinking – young thinking and innovation. And I think the result of that is slower generational change when it comes to innovation and the nurturing of young ideas. It’s quite a different situation in NSW where the circle of influence crosses many generations.
“In NSW, entrepreneurism and taking risks is cherished and rewarded whereas here I think sometimes opportunity and risk are seen as having negative connotations. The owners of risk and innovation seem to be the younger people, so Adelaide has ended up with a different paradigm.”
O’Loughlin said it was possible the lower turnover of directors in South Australia related to the fact there were fewer board opportunities existing in the State – but he also offered a solution.
“Sometimes you have to positively discriminate in order to make change as opposed to waiting for natural attrition to take its course,” he said.
The views of other ‘Back to Business’ panel members on the reasons they stay awake at night included:
Jody Burton: Managing Partner, Deloitte
“I’m awake with excitement as I contemplate the potential that South Australian business has to capitalise on the transition in our economic landscape that we’re seeing both locally and globally. We should be constantly questioning how active our SME’s are in South Australia in transforming existing operations to be agile enough and at a pace that will allow us to maximise the potential of global and national demands for the future.
“The key for our professional services industry will be to help local business seize the window of opportunity we have before us, whether that be repositioning existing businesses to slipstream new growth sectors, challenging business models and leveraging the power of technology and innovation to drive productivity to meet global demands that will present opportunity for our state’s economy.”
Sally Powell: Chief Executive, Bedford Phoenix Group
“The greatest challenge facing the disability sector is the National Disability Insurance Scheme. Under the NDIS, people with disability will now be able to choose the services and providers to make their lives better. This significant change means that the entire sector must reposition their businesses to move from a supply driven, government regulated model to an open, competitive and demand driven market.
“The sector will need to develop new service models, launch competitive marketing strategies, respond to skill and labour shortages and all while continuing to provide great service to our current consumers. The challenge is great, but so too is the opportunity.”
Damien Kitto: Chief Executive, Adelaide Convention Bureau
“Business Events are the highest yielding sector of the visitor economy. In 2014 the Bureau secured $144 million of future business that will generate 1,400 jobs for South Australians. This is delivered at an amazing return on investment (ROI)to government of 180:1. Business events are low hanging fruit, and with further investment so much more success can be achieved.
“The Bureau is a membership organisation, these 200 members form part of a very important supply chain that service business event delegates. Many are SMEs and do it tough in a highly competitive environment. The sheer cost of doing business is a significant challenge. The growth of business costs outstrip the growth in revenue. To lower business costs will ultimately produce greater prosperity that in turn will generate investment and business attraction for the state.”
Vincent Tremaine: Chairman, Business SA
“Red tape is the issue that not only keeps me awake at night but ties up myself and Business SA members throughout the day as well.
“Business SA recently conducted a survey of its members on State based red tape. The top three issues for business were the red tape associated with Work health and Safety codes of practice, taxation and licences and permits. Governments need to first consider self-regulation. But if regulation is necessary it should be minimal and easily understood. And for every new piece of legislation introduced there should be at least one piece of current regulation abolished.”
After such a successful event Back to Business event this year, Members can anticipate a similarly interesting and informative event next year at this year’s prices. Please book now to save this date.
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