Human capital and technology

Published as ‘Battle of carrot versus stick’, Geelong Advertiser, Thursday 13 November 2008, p. 23.

Rupert Murdoch’s second Boyer Lecture on the ABC ‘Who’s afraid of new technology?’ was a challenging call to Australians to embrace the opportunities of the new rather than bemoan its collateral damage. But it harboured a contradiction at its very centre. Murdoch began with a tale about the Luddites, who destroyed stocking frames and weaving machines in the early nineteenth century in a violent protest against one aspect of the technological change of their day. He went on, ‘After a while, a number of the leading luddites were arrested and brought to trial. Some were hanged. Some were thrown into prison. And some were transported here to Australia, where they became among our first settlers. They were treated very harshly. But they were truly prisoners of the past.’

The lecture then addressed three subjects. ‘First, why technology is a good thing despite the unsettling changes it brings. Second, in business terms, how technology is putting a greater premium on what is awkwardly called “human capital”. Finally … what all this means for Australia’s future.’ It is that middle element which contains the contradiction, for Murdoch insists that what distinguishes progressive enterprise is not its equipment or its technology but the skills of its people. He quotes Bill Gates, ‘take our 20 best people away, and I tell you that Microsoft would become an unimportant company’.

Now my story about the Luddites is that they had the human capital of their day and so they were dumped on the scrap heap or hanged or transported for demanding that their skills should be valued. If they had been offered a clearly articulated alternative rather than redundancy and could see how they could adapt to the new world, then my guess is that they would have gone in that direction. But it is easier for those who want to change technology to junk those who resist rather than ensure that they have a chance to adapt to it in their own way.

If you do want a model of what is possible in the new world, then the little island of Samso in Denmark might be a better one to consider. In this windswept little scrap of land in the Kattegat, an inlet of the North Sea, the 4100 inhabitants have embarked on a renewable energy project that has cut their carbon footprint by 140 per cent and they now export millions of kilowatt hours of electricity to the rest of Denmark. Wind turbines along the coast, fields full of solar panels, biomass and wood chip power generators and efficient hot water distribution systems supply the people’s needs but with a substantial surplus which brings in revenue. Nothing was imposed on these people. They won a competition to take part in the experiment and everything is owned by local collectives or individuals. Sure there was significant public investment, from the Danish government and the European Union, but a substantial part of the average $US18500 cost per islander has come out of their own pockets. ‘The crucial point that we have shown that if you want to change how we generate energy you have to start at the community level and not impose technology on people,’ says Soren Harmensen, the former environmental studies teacher who helped get the Samso experiment under way.

Now Rupert Murdoch will quite rightly come back and say that this only reinforces another of his messages about the importance of education, resilience and risk taking by the people. It certainly shows that people can and do adopt technological and other changes when it is in their interests to do so. So the carrot might be better than the stick after all.