Paradigm Shift is used to describe a profound change in a fundamental model or perception of events. A radical change in underlying beliefs or theory. A changed attitude, or way of doing things.
What this means is that if the way we are doing things is not working, we must stop just piddling about at the edges making small, usually ineffectual alterations, and dig in and turn the whole thinking process upside down; we need to look at a problem or issue from a completely different angle.
What has changed in recent times that proves this rule?
The Sharing Economy
AirBnB is now one of the biggest accommodation providers in the world. It owns no hotels or any other properties and is entirely accessible on line. This is customer to customer business. A whole new way of finding and securing a place to stay.
Uber is now one of the biggest taxi providers in the world. It owns no cars or any other vehicles and is entirely accessed on line via an a computer browser or an 'app' on your smart phone or tablet.
Netflix and other movie sharing and streaming services have completely swamped Blockbuster and other bricks and mortar video stores. They no longer exist.
Travel. There is now a disruptive travel company that owns no aeroplanes, hotels, rental cars or offices in the high street. But it provides 5* travel experiences for members at 2* prices. And this is growing at an exponential rate overseas and now in Australia.
Even Skype deserves a mention. Paradigm shifts.
People are not reading traditional books as much now as 10 years ago. Cheaper publishing techniques, cheaper purchase prices, cafés and other community/social areas in bookshops and libraries, more book tours and launches, reading and writing festivals were tried, but still the reading public stopped buying paper based books.
Enter eBooks. Electronic books. A paradigm shift. Along came Kindle and other electronic reading devices; and programs for reading eBooks on your smart phone and tablet.
That's turning the issue upside down. Using a different way of doing things.
What might this paradigm shift business be able to offer a person living in the here and now in Australia? Someone not in the industrial revolution, or involved in the advent of printing, or the creating of The Internet? How does that work?
Change and The Paradigm
Author Earnie Larson is credited with the droll maxim "Nothing changes if nothing changes".
Let's look at this.
Australia is an island state far away from the 2 hubs of human life. USA and Europe.
As I write, the news is breaking that the Electrolux factory here in Orange in Central Western New South Wales, Australia is closing down with the associated loss of jobs, self esteem, and regular wages. Of course there will also be the domino effect rippling through the NSW economy as ancillary production diminishes and finally stops. Not to mention the probable decrease in the spending of the more than 500 people affected by this change.
Is this just the greed of an overseas parent company or is there something else at play here?
We, in Australia, are facing constant rises in prices for everything. Wages, Infrastructure, repairs & maintenance, equipment, raw materials to name a few.
Our manufacturing sector then has shipping and transport to take into account. Even if product is sold here in the big brown land; most towns and cities are many hours apart. Even by air. And this is expensive. Export is almost completely prohibitive.
If we look at a version of the economic equilibrium curve, (not supply V's Demand, but COGS (Cost of Goods Sold) V's Sales) we note, as mentioned earlier, that costs are rising sharply. On the other hand income derived from sales is falling due to among other things cheaper imports, online purchasing and changes in consumer demand. The crossover (equilibrium point shall we say) is racing towards zero faster than any time in our history.
Ostriches we are not. This can't continue. It is not greed to want to stay in business. If a limb is dying or dead we need to cut it off. Has to happen.
Supply V's Demand
Perhaps we can look, now, at the traditional Supply V's Demand curve but note that while demand is quite possibly still high for most manufactured goods although in a different model perhaps - our ability, in Australia, to produce / supply these goods at the required level and the necessary price is becoming less and less. So the equilibrium is unstable. Unpredictable. Other than the realisation that it is getting closer to zero here too.
Life Has Moved On
So, of course we complain. We tweak the edges of the problem, demand that Governments help, or that Parent Companies lose their investors' money or any number of completely ineffectual and traditional remedies. Nothing works. Funny that. The situation has changed. We have to change too. Yep. No longer much point in making large quantities of horse shoes or hansom cabs. Life has moved on. We need to catch-up.
While we cannot (nor should we) completely resile from a need for a manufacturing sector as such; we MUST reduce our reliance on it. We need a paradigm change.
Our Governments, of whatever persuasion, do not seem to be able to tax massive profits at the correct level, nor do they seem to be able to resist calls for assistance from companies making billions who figure a small handout of a few hundred million will help the country as a whole.
We need to look at how we can CHANGE things so our people can be strong again.
Yeah, But What?
Obviously, we will still need cars, fridges, washing machines, TV's and the like. Not to mention furniture and all the other major pieces of equipment required for a modern lifestyle. But is it possible that we can shift our way of living in a way that reduces our demand for such goods? Perhaps? In ways we have not thought of yet? With products that may not have been invented yet?
And with greater numbers of people arriving in our country from overseas and by the normal processes, we have, in my opinion, a huge and ever increasing need for enhanced service industries. See sharing services mentioned above.
Take for example the rise of restaurant food and grocery delivery systems in some of our bigger cities. Just one instance.
We could develop products that do not need to be mass produced, perhaps; nor transported by traditional means. Old ideas can be re-visited or new ideas generated. Stuff that is locally made, even Cottage Industries might be the way to go. (We moved away from these many decades ago, but perhaps we could revisit this kind of commerce). I believe there is now again a huge potential here.
What about Sport, Music and Theater? Performance and Static or Fine Art. Movies, Electronica and esoterica. All of these things can be ramped up and with the right marketing (another service industry) might be a new employment area for displaced manufacturers. Most of us have more leisure time now with a need to fill in the spaces. And everyone has untapped talent just waiting to be unleashed. Hidden gems. Think about it.
Change is inevitable. It is happening all around us. Now.
Life coaching as a service might pick up to the level of acceptance here, that it has in America.
And, of course there is the whole digital economy. Phone and tablet 'apps'. Computer coding. Commodities that can be transported free over the air so to speak. This market, largely untapped even now, is bigger than anything that has gone before.
The change is here. We have to stop bitching and get on with it. Embrace it. The same wind blows on us all. If we act like a child who says, “I'll turn my back, and if I can't see you – you can't see me,” the wind will still blow on us and likely blow us over. We cannot escape. We must deal with the consequences. We have to change ourselves. We have to adapt to what is happening around us. A paradigm shift is long overdue.