Could Covid trigger a new dawn for Australia's industry? – Leanne Kemp, Chief Entrepreneur of Queensland
"We spend a lot of time importing many goods and materials into Australia, but I think we do have all that we need in our own backyard now... We really need to consider our industrial distributed power position now."
From its pristine tropical wilderness to its seemingly inexhaustible mineral wealth, Queensland has some of Australia's most enviable natural riches. Yet its geographic enormity, sparsely populated regions, and exposure to some of the country's harshest climate extremes create a unique set of challenges for policymakers.
Leanne Kemp, Queensland's chief entrepreneur and founder of local blockchain developer Everledger, sees the Sunshine State's geographic and social pressure points as a wellspring for innovation and entrepreneurship, and a potential new dawn for Australian industry.
FST Government: Tell us a bit about your role as Queensland's chief entrepreneur. How in particular does the QLD Government reap the benefits of the OQEC’s unique entrepreneur boosting mission?
Kemp: Queensland's chief entrepreneur is a program of works that sits under the Advance Queensland initiative under the Minister for Innovation Kate Jones, with $755 million administered across the entirety of the state in innovation and entrepreneurship. We have about 35,000 innovators, startups, and scale-ups across the state that cover multiple disciplines of technology as well as travelling across many industries; suffice it to say, we have quite a strong employment base around those startups. Startups are often defined as less than five years old and they're not necessarily prejudiced by the amount of revenue nor the type or number of employees they have, but certainly the early aged or early scale in terms of their adoption of business model change or technologies.
So, how would a state advantage itself from such innovation? It's clear and examples of that are happening today: whether that be the pivoting of businesses in the manufacturing of ethanol to give us sanitisers during Covid-19; whether it's 3D printing and bringing together a bank of ‘makerspaces’ so that we can print masks in a pretty quick period of time – a turnaround time of around two weeks, going directly out to public and private hospitals to protect our health workers; or it’s platforms that enable the connectedness back into our shared data sources for the Great Barrier Reef, that is currently undergoing its third major bleaching event in the last number of decades. So, innovation really provides us with a set of rails that can be considered for the new economy. And no more defining is that time than right now, right in the middle of it.
FST Government: Queensland has proved itself somewhat of a vanguard in this space, becoming the first state in Australia to establish an office for chief entrepreneur. What unique conditions and pressure points within the state do you feel inspired its creation?
Kemp: I certainly think Queensland has adopted technology and innovation for quite some time – and testament to that was the Beattie Government’s embedding of its ‘Smart State’ slogan on number plates. We are custodians of some of the greatest natural resources and we export that in terms of our commodity backbone, and particularly in mining. But we're also custodians of the Great Barrier Reef and the Daintree Rainforest, so from an environmental perspective, we have a solid standing. We also have a cluster of universities that stretch across the entirety of the state. And, when I think about the perfect storm, it's the state that can probably advantage itself the most from innovation because it also has challenges from a disaster perspective, in terms of climate and environment. We have the tyranny of distance – around 45 per cent of our population sits in rural or regional centres. It’s a state that isn’t reliant upon just one central financial district; we do represent all industries to all people in all seasons. Queensland's also the largest exporter of goods and services – we export more than New South Wales and Victoria combined; we are the export state. When you consider that, we have entrepreneurs that can both act locally and enable growth globally.
FST Government: Now to what's currently blanketing the news coverage, Covid-19. Given the disruption being wrought by the pandemic – economic, social, and political – what impact do you feel this has had on the startup sector? Should there be more effort by government to step in and support a sector no doubt under considerable strain at the moment?
Kemp: We have some pretty good lead statistics. We know around 50 per cent of our startups are facing many challenges right now, particularly in their cash reserves. About 50 per cent of our startups hold only about two months’ worth of cash reserves, and there's only a small percentage, around 20 per cent, that have more than 12 months in cash holding. They are facing the same existential question as we all are as a small business.
And what more could government do? Well, two things in particular: one, signal what solutions need to be delivered, whether it be in the medical supply chain or in activating our ability to enable a telehealthcare system or access to food and supply chains – it’s a signal that we seek solutions, not ideas today; and, secondly, how can we enable government to link procurement as a part of this current pandemic? It's clear that there are certain essential services that need to continuously run for the sake of the health of the nation. But there are also economic downturns in some of those industries. A prime example might be tourism. If we think about tourism, particularly those parts of its workforce that have incredible customer service enablement – some of them might even be first aid certified. We need to ask, how can that workforce be re-allocated into the demand curve to help support frontline services, such as ‘shiver clinics’, rather than having patients going directly into full care ICU wards?
Talent and natural capital in Queensland holds a far greater density around what the future economy holds. And, from a natural talent perspective, that is where our entrepreneur and startup ecosystem can step up with government to enable that either fast-tracking of skills on a skills currency end and/or the re-pivoting or the recertification of skillsets into new economic reasoning.
FST Government: How do you rate the government’s response to the pandemic so far?
Kemp: Well, we certainly know they've got access to data and that data is being centrally stored as well as distributed across each of the states. They've acted in accordance with the World Health Organisation and, to a certain extent, Australia – when we think about the statistics per capita and our morbidity rate in comparison to other countries in the world – is faring very well. In fact, we could be the flag bearer for Covid recovery if this comes out the way that we believe it will. The curve is starting to flatten; it's not flat yet. We're still not even approaching the second peak. But government is doing all the right things in crisis management – they have a clear communications strategy, and they centralised that. They've enabled the power of the states to be formed and those Premiers are acting in a timely manner. And citizens, I believe, are as well informed as they can be and need to be at certain junctions of decision-making. So, from an Australian perspective, when you look out upon the backdrop of where the world sits, we're bearing up as a leader.
FST Government: Necessity, as they say, is the mother of invention. How could pandemic-triggered disruption prove the next wellspring of innovation and newfound opportunity for Australian businesses?
Kemp: We talk about the digital revolution and we talk about that transformation. Well, there's no such thing as transformation – it's here now and we're back against the wall. And, more than ever before, we're all managing to become quite dexterous in our use of technologies. It's also an even playing field in that everyone is equal right now. We're all facing the same physical invisible enemy over the world.
We desperately need life sciences to be able to solve some of the issues that we face in the vaccine. And that's testament to Australia and particularly Queensland being one of three lead universities in the world to first sequence Covid, and now the University of Queensland is working on a vaccine. So, with the med-tech sector, including telemedicine, how we get out to those far-reaching corners of our state and far-reaching corners of Australia will have a significant boost.
Digital infrastructure – and particularly around cybersecurity and our speed and our connectivity into the last mile into homes as well as offices – is going to be ramped up. And then, when I think about supply chains, how can we bring security, insurance, and a certification that the products being worn by our front-leading health providers are certified under the right certification measures, which could otherwise put lives at risk.
And, further, advanced manufacturing; we spend a lot of time importing many goods, importing materials into Australia, but I think we do have all that we need in our own backyard now. So, potentially, we really need to consider our industrial distributed power position now.
FST Government: In terms of our economic recovery, are you already seeing light at the end of the tunnel or should Australian businesses and governments ready themselves for what could potentially be a decade of downturn?
Kemp: I wouldn't say a decade – a decade's a long time. Certainly, when this has occurred previously, a decade was something for sure the tempo of pace. We do have activations and connections now digitally; we have globalisation in terms of supply chains. So I'm not sure that it's a decade to recover. But I do think that the current stimulus packages running federally and state-wide will see us out till September.
We know and understand on the backdrop of this that it is both a health pandemic as well as a significant downturn in the slowing of the economy. But China is already opening its doors to trade. And I do think that Australia will be one of the first countries in the world to reopen its international trade channels. We do have a trampoline advantage that will help us jump into the immediate future – we already have good trade relationships with China. What I would say is that we do know, and we've learnt from the Spanish Flu and smallpox, that the epidemics and the pandemic health concerns rise not just on the first wave – which is what we're all experiencing today – but a second wave. And if we look back to the Spanish Flu in 1918, we saw a huge rise that happened in the second year. And that's what we're yet to see. And we're hopeful that we can eventually bring herd immunity into Covid, but we have to rely upon social distancing, sanitisation being at the forefront of everyone's thoughts, a change in consumer habits, as well as our ability to run really fast towards a vaccine because we do need to solve this from a medical perspective. Otherwise, I don't think it's going to be mentally healthy or physically healthy to all be locked in our houses for six months. There will be a reshaping in the way that we communicate, live, and interact, and even how we work in our workspaces, how we walk to the front of the counter in a Woolworth shopping centre shows we have social distancing embedded within the cash register process, which one would never have thought of today.
FST Government: Moving on to your time at Everledger – a blockchain developer, initially working with diamond suppliers to create immutable digital records of a stone's origin, characteristics, and ownership history. What did this experience tell you about the value of distributed ledger technologies in enhancing the functions of government?
Kemp: We know that Australia has taken blockchain seriously. We've adopted a national blockchain roadmap strategy, adopted in January, thanks to Senator Karen Andrews. So there’s no more perfect timing than now to see the enablement of this technology, which I see as important as, if not more than, artificial intelligence, machine learning, 3D printing, and drones.
The applications of blockchain, of course, are far and wide. Everything from the enablement of digital money, the transfer of value, and then the work that we do as Everledger into supply chains. We've worked in the diamond industry securing that supply chain, bringing transparency, trust, and enabling certification to know that that diamond is real and to know where it's come from. It's clear that, from a medical perspective, that same technology could be applied to PPE or to ventilators, things that we need to ensure the integrity of a product is maintained; after all, more than a mineral diamond, we want to make our true diamond a promise for life. This is an assurance of life – true life: people will die if we're not providing for a secured and localised supply chain.
We also know that leadership is changing. No longer can we just sit to hierarchical orders – they can't and don’t act quick enough. That's not to say there isn't a place for government; there most definitely is. But building a systems-based leadership and a distributed enablement so that we can get, as the Premier has done here with the care army, the ability to ready the resources in a distributed fashion. And that's not only people, it's also materials and intellectual property that all come together to be able to solve a set of challenges.
Government is central by authority; they act in a centralised way and they get that blockchain is distributed and decentralised, so it's quite a psyche change to enable that to be wholly adopted within government. But Queensland is probably the best government to adopt it because it does face that ‘tyranny of distance’ problem: 77 local councils and regional facilities it needs to coordinate in a style and a manner, under the pressure of time and sensitivity of the moment, that it hasn't necessarily had to enact before now. So, blockchain’s yet to have its finest hour, but maybe it's just on the horizon to do so.
FST Government: There’s certainly been a lot of hype around blockchain. Though this has notably diminished of late, perhaps as promises of radical transformation have been slower to be understood or realised. At we still yet to see the technologies full potential?
Kemp: We still rely overwhelmingly on centralised structures. Until centralised structures are compromised and are at risk and/or are trustless, then we won't necessarily move to a distributed form. We’ve seen that – we saw that with the global financial crisis, the implosion of fintech and financial services that gave birth to Bitcoin, that gave birth to the underlying engine that is blockchain. And centralisation hasn’t been tested until now. We're seeing the centralisation of supply chains as a prime example – geographically the density is concentrated within China for our medical supplies. So, this is the challenge that will provide the best opportunity, because initially in blockchain we had a nail looking for a hammer. But now we’ve got this hammer that can easily bang in the nails of the challenges that exist.
FST Government: Australian governments, state and federal, have keenly pursued frontline service digitisation. Nevertheless, most still fall markedly behind the private sector's CX offerings. Is there a ‘silver bullet’ technology necessary for governments to meet the service demands of tomorrow's citizens?
Kemp: Government needs to start with a priority and the priority needs to be responsive, activated, and engaged government. Unless we have that as a priority within the state, of which Queensland does have – we do have one of the Advancing Queensland Priorities (AQPs) listed as a responsive and engaged government – then I think the tools can be deployed in whatever way. The types of technologies are really those that enable a direct and trusted source to the community. And if you're able to have a citizen identify themselves in the palm of their hand with authority that still provides for a backdrop of privacy and the respect of privacy of data, then that's really the first leap forward.
What is the technology stack for that? It's everything from cybersecurity to building through to artificial intelligence, machine learning, biometrics, censoring and even blockchain, to a certain extent. The tech stuff is quite far and wide and complicated. But, ultimately, I think that governments need to sit at the very top as a kind of ‘North Star’ – and that North Star needs to embed within its 100-year living policy its priorities as a state or federal government.
FST Government: The world has become ever-more reliant on remote working infrastructure to support us through the Covid shutdown. And questions are rightly being asked about the trust, reliability, and transparency of remote-working services, particularly for the sensitive institutions of government. How much trust can we vest in these systems?
Kemp: It takes trust in the central authority – a trust in the distributed nature of credentialing and substantiation of that data. You've seen a lot of front-line media grappling with concerns over teleconferencing service Zoom and it not having the right security and embedded technology processes within its engine. Sometimes, being a scale-up founder with front-leading technologies, it does take a moment of compromise for it to show up weaknesses or vulnerabilities. A lot of companies, though, should spend more money in ensuring that their quality assurance processes are in place, including more ready use of third-party, white-hat hacking. There needs, I think, to be a lot more investment not only in innovation itself but also in enterprise robustness and in bringing together more rigid standards globally and locally. ■