Those New Zealand businesses who worry that our remote location, talent shortages and the brain drain are hampering their business growth should look at using technology to connect them to the "global brain", advises president and CEO of GE Australia and New Zealand, Steve Sargent.
In the past year, GE has twice used an open platform to engage with the developer community and data scientists to develop better practices for their aviation and health-care customers. In both cases, accessing the "global brain" led to breakthrough levels of efficiency and productivity, eliminating waste and significant costs.
Speaking at the recent GE Capital Building Better Businesses Summit in Auckland, Sargent recounted an example in which GE worked with Alaska Airlines to improve its on-time performance. On average, each jet engine on an airplane carries around 2,000 sensors measuring around 5,000 data points, collecting a terabyte of data every day, including take-off time, arrival time, weather and wind data, and latitude and longitude at frequent points along the journey. GE published two month's worth of this data to Kaggle, an open-source platform for data modelling and analysis.
"We had a competition where we said, 'Here is what we look at as aeronautical engineers, but what do you as data scientists identify? Tell us something we don't know about this data,'" Sargent said. "It was about accessing different brains - who may know nothing about aviation, who may know nothing about jet engines - to look at the data and analyse it."
Currently, flight arrivals times are off by an average of seven minutes across the industry - the winning algorithms showed a 40 percent improvement on this, saving passengers more than five minutes at the gate and substantial cost savings for the airline: for every minute in reduction per flight, an average-sized airline could save 1700 hours per year, reducing crew costs by US$1.2m and fuel costs by US$5m.
The ability to access the "global brain" is particularly important for New Zealand's Mid-Market businesses, 38 percent of which report that finding individuals with the right expertise and skills to grow their business is a key concern. The Mid-Market (businesses that turn over $2 million to $50 million annually) makes up just 6.6 percent of our country's firms, but is a big employer, accounting for 33.2 percent of our employment.
Click here to read more about the state of the Mid-Market in New Zealand.
The accelerating penetration of the internet means those companies troubled by the skills gap at home can simply go online to access expanded networking and labour pools. Sargent reported that internet users doubled over the past five years and is expected to hit five billion by 2020: "You are going to be able to have people from all over the world working on your project," he said.
To really innovate and stimulate new thinking, Sargent recommends businesspeople break old habits and look beyond their immediate circles, again using technology to access experts further afield with different backgrounds and skills.
"Ask yourself, how diverse is your professional network?" he said. "What are you doing to network with folks who are going to take your mind somewhere that you wouldn't take yourself?"
Businesses surveyed by Deloitte last year identified critical-thinking skills and problem solving as the skills shortest in supply, and expect their future teams will require higher levels of skill. The financial pressures that come from needing a skilled workforce will impact directly on the other end of the spectrum, with businesses likely to send jobs overseas that are highly-repetitive and can be done less expensively in other markets, especially in the developing countries that will account for 70 percent of the global population growth in 2030.
"Increasingly, if you have jobs that are high paid, low-skilled, you're going to be automated, you're going to be digitised, and you're going to be outsourced," said Sargent.
For more insights into New Zealand businesses in the Mid-Market and the issues they face, download the GE Capital New Zealand Mid-Market Report 2014 here.
To read the GE white paper on "The future of work", click here.