Reviewed by Peter Mellalieu. Peter teaches innovation and entrepreneurship at Unitec Institute of Technology.
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 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.
References
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