Why we could all do with taking some Chinese lessons
What if, instead of expecting people to come to established businesses, we established businesses where they already are?
Anything truly successful, that endures beyond a fluke, you’ll find was part of a plan. It’s not always exciting, or even much fun, to adhere to a plan but it works. Living the dream is only possible if you’ve been living the plan.
Most plans with the benefit of hindsight are obvious in their foresight. They were obvious at inception too, but just too difficult to embrace – too hard, too unpopular, too long-term. Instead, in the name of popular promise, we move from simple but difficult, to complex but convincing. We find acceptance in the cleverness of confusion. We say “Yes, I get it” when we know it’s wrong, but we’re too scared to stand up and be counted for what’s right.
I believe that everyone wants to work, to be productive, but it’s not that simple – jobs aren’t just around the corner. You have to forsake the familiarity of your home town and head to the city to join the queue, get a job. What if, instead of expecting people to come to established business, we established businesses where they already are?I read an article in last week’s Financial Times about how Beijing takes the factories to the people: “We draw a circle on a map, and if there are enough villagers to employ there, we build a factory.” Now that’s a simple, clever plan.
Urbanisation is an obvious outcome (both cause and effect) of industrialisation and the need to create those economies of scale, only available in centralised capital projects of scale, that are required to compete globally. Such is the accepted conventional wisdom. Not only does this trend create “city problems” but it leaves in its wake the unintended consequences of rural desertion. Skilled, able-bodied workers head off to the city lights to earn the big bucks, often leaving behind absent-parent, generation-gap family structures with all of the problems that can create.
The Beijing notion of rural revitalisation is but one example of planned future equilibrium necessary to let the powerful, natural forces of supply and demand settle at the right price. A steady state is a necessary foundation for planned economic prosperity. We have to fill the holes before we can build the skyscrapers.
China’s policy of state capitalism (with all the reservations we must have) has worked. It has worked to create an economic superpower against the unmanaged, unbridled capitalism in the West, which seems to be coming second. However China now seems to be moving away from simple supply-push initiatives, towards consumer demand-pull strategies. Perhaps the sequence itself was part of the plan.A precondition for a successful plan is common cause on the end game. I thought we had that: A better life for all. We now only have to agree on the mandate so that the actions necessary to implement it are not continuously contested, particularly for purposes as transitory as political gain. It is clear and obvious that a policy of investing in capacity will outperform spending to entrench dependency.
We need to redefine the notion of employment. We need a mindset change, a move away from centralised employer power to decentralised economic enablement, right down to the individual. Ask of every job whether it could be more efficiently (and profitably) executed by the worker becoming an enabled entrepreneur. Owner-managed economic units, funded initially by the service user, paid on delivered output, must replace wage-dependent fixed-cost structures. Everyone is off balance sheet. A vast system of satellite business units, connected by common economic purpose, begin to redefine the government-business-labour accord. Employees become entrepreneurs. Decentralised economic power – we don’t just take the factories to the people, we take the jobs to the people. It’ll never work! What we’ve got isn’t working. People won’t accept that responsibility! I bet they will. You have to integrate to compete! Of course you do. It’ll take ages! Yes, it will.
It starts with planning what to teach and where to build. Satellite economic clusters will emerge where natural advantage already is, of whatever resource: location, mineral deposits, people, fertile land … a lot is in place already.
New cities can literally be created by economic persuasion. Make it easier, cheaper to do business locally. Replace corporate footprints with revenue-sharing service-level agreements. See state infrastructure as an enabling asset, a shared national resource.
The plan will require extraordinary common cause and foresight, and then oversight and intervention. We’ll have to listen and think more but if we do we could solve everything, even land.
Mark Barnes is CEO of the Post Office.