Job Mobility And Segmentation In Australian City Labour Markets: Fill & Download for Free

DISCLAIMER: Individual experiences in various job 'micro-markets' and companies vary a lot. So this comment may be statistically incorrectWARNING: If you are from a moderately wealthy family and immigrated here when you were just 4 years old, your experience probably is going to be a lot different. A wealthy background can shield you from all sorts of discriminations including the racial ones.CONTEXT: Have robust software product engineering (& entrepreneurial) background, with experiences of working in Couple of US/SV product companies. PR-holder. Living in Sydney for last couple of years.Australia is wonderful country with beautiful beaches, great pub culture, fantastic outback adventure journeys, warm & friendly 'mates', great food diversity & restaurants, tropical weather (Melbourne weather is a bit mercurial :), great transportation (For example, Sydney has four modes of transportations) and road networks etc. I find Sydney as a wonderful city to live in (we'll come to macro-economic aspects of housing affordability in a minute). For people with entrepreneurial & creative bend, Melbourne may be a better option.However, IT culture and recruitments prevailing in Sydney seems a bit depressive. Yes, there are some fantastic companies (Atlassian is a great workplace), but I've seen enough bad ones. Successful immigration to a new country like Australia (esp. if you are married w/o kids) is not just about it's IT-environment. It's a complex interplay of following aspects -1. Local Experience: 'Cultural Fitness' is important for employers, but I think this whole 'Local Experience' thing have been played a bit too much. Without any racial connotation, I've seen this rule being bent often for people with European descent. While attending an interview for SDE position (from a pan-Asia recruitment) in Seattle, Microsoft never stressed on having 'local American experience' as a criteria to see 'cultural fitness'.As a fellow Quora-reader correctly pointed out, there exists an issue about quality of English spoken or practised by Asians. To some degree the complaint is justified. For example, I've observed extremely poor English (both spoken and written) standards while working with an Asian colleague holding Masters in IT from an Australian University. Again this observation mayn't be statistically significant enough to represent the entire Asian population (don't have data to justify). Understandably, Australian universities are under immense "selection pressure" as majority of the talented Asians typically choose US for their higher education due to a multitude of reasons, forcing most of the local Universities to keep the selection bar low enough to remain sustainable. Even then, at the very least, they should raise the minimum requirement (for students) of IELTS to 7. Although this suggestion may have a huge economic impact on Universities (difference between IELTS 6.5 to 7.0 may be few million dollars) and may crush dreams of many Asian students, this will certainly help to ease the communication gap, paving the way for better Cultural Integration.But unlike the innate IQ, English skills can be improved quickly as long as you spend enough time with native english speakers. Unfortunately, due to greater socio-cultural integration issues and subsequent asian-clique-formations, English skills do not improve for many Asians (even after a decade of residency).On the other side, I've worked with a Python (programming language) developer from one of the Eastern European countries. Though an excellent team-member, he didn't possess very good spoken English skills. And without having any "local experience", has been absorbed straight into a technical leadership role demanding expertise in a completely different technical stack.Technical folks (unless it's a client-facing IT consultancy or sales engineering or senior executive leadership role) typically works at back-office. And worldwide, programmers and technical folks are known to be introverts, focusing more on technology as opposed to human interactions. So quality of English doesn't matter too much as long as you communicate well in technical terms (in GitHub/BitBucket comments, algorithms, optimisations etc.) within the team. Interestingly, on average (there are outliers always), I've seen more extroverts dominating the tech-scene here as compared to other tech-hubs across the world. This dominance of extroverts in tech-scene, poor English skills observed among Asians (on average) and cultural stratification perpetuates that "local experience" requirement, perhaps.2. IT Market (Macro Economics): The overall IT market (dominated by service companies, consulting corporations) is shrinking and I know several 'Aussies' who are sailing for greener pastures elsewhere (Singapore, Valley etc.). One of the main reason for this dilapidated condition is lack of start-up funding (esp. in the Angel region of 1-10 million $) and increased tendency of bigger/mature Australian businesses to outsource IT to Asia. As a consequence, job creation (or opportunity creation) has been stalled.3. Work-Life Balance (WLB): With this economics, it's not too difficult to see why many businesses or business units have skewed the 'work-life balance' to the other, more "stressful" end of the spectrum (This again may depend heavily on the specific company or the group you are employed with). If you are into Enterprise Systems (Adobe CQ, BizTalk, Oracle etc.) WLB should be lot better as compared with roles in Application Development (.NET, Ruby Rails). But it's important to remember that too-much-WLB and tendency to "laid back" work culture serves as a fantastic breeding ground for "Mate-o-cracy" (reverse of Meritocracy)4. Recruitment Practices: Barring some exceptional companies & startups, I found the technical recruitment process has a long way to go to catch up US (& even in some cases - Asian [Flipkart, Infosys, Baidu etc.]) standards. Believe it or not, many times recruiters conduct the 'First Round' of technical interviews with an understandably rigid structure. A joke often goes like this -One door never shuts down for an unsuccessful bloke - IT recruitment in Sydney :)Most of the companies will not ask any algorithms/puzzles as part of tech interview, as the popular belief is - "Anyway you are going to develop some Web apps with some stack/framework. Why bother?", as meritocratic practices are often limited to pedantic topics like - TDD patterns, design patterns, OOP etc, number of Github repositories etc. Just because you've spotted a suitable advert in SEEK, it doesn't necessarily mean you will be given an opportunity to appear for the interview, based on merit alone. It's all about the credibility of the channel through which you are approaching to the recruiter who will represent you to the company. Except few companies like Google Australia, recruiters often have deep relationships with your future direct manager or L+2 manager. Some companies have 'preferred' staffing vendors and only way to get a 'call' for an advertised position is to get represented by a recruiter from one of those preferred staffing vendors (ex. Robert Walters). The prevalent practices rest highest faith on the maxim - "It's who you know matters more than what you know". This poses new challenges in the form of "Cultural Integration" (see below - #11) issues.May be a bit sweeping generalisation, in Australia, especially at big corporations, jobs often do not end up at company's public job portal only to be manipulated by a section of managers who have their own 'preferred' recruiters and 'preferred' candidates without actually conducting interviews - pretty horrible recruitment practices. Also racial discrimination is pretty common in recruitment (over the years racism has moved from being explicit to subtle) industry. Checkout - The confessions of a Recruiter MUST READA recruitment agency's definition of screening is.... hit "delete" with Indian / Asian applications. Sad but true!For a more quantitative approach to labour market discrimination -‘After completing TAFE in 2005 I applied for many junior positions where no experience in sales was needed – even though I had worked for two years as a junior sales clerk. I didn’t receive any calls so I decided to legally change my name to Gabriella Hannah. I applied for the same jobs and got a call 30 minutes later.’...To get as many job interviews as an Anglo applicant, an Indigenous person must submit 35% more applications, a Chinese person 68% more, an Italian person 12% more, and a Middle Eastern person 64% more applications (Source).Ref: http://andrewleigh.org//pdf/AuditDiscrimination.pdfBesides racial discrimination, according to interactions with multiple recruiters there exists another perspective which may be a bit uncomfortable to digest. It's about quality of asian students opting to study here. If you are talented enough, on average, it's hard to justify an expensive Australian university degree (There are exceptions as always. ANU, UMELB, USYD ranks pretty high. Sometimes high CoL plays a decisive role) over a quality US one. During the absorption of these students into local workforce, thus, an obviously biased impression gets formed - which in turn feeds into the prevailing racial discrimination issue, making it particularly challenging for other asian (mature-age) immigrants (especially for those having a darker skin and without an Anglo-Saxon-looking name. In fact, have been made specially aware of my darker skin-tone multiple times, since I landed here).5. Minimum Jobless Tenure: Because of the mix of above and other factors, often MJT is random. Expect it to range anywhere from 20 days to a year.6. High Tech Market Maturity: Although 'hard'-engineering is highly paid (at least through the mining-boom days) and respected, software/tech market is yet to reach to a acceptable level of maturity. Without big successes (Atlassian is an exception rather than rule) at home (successes which are also scaled to other parts of the world), software engineering is often viewed as just another commodity expenditure, unlike Sales & Marketing. In fact many multi-national companies (Including Microsoft and others) has only sales & marketing front-end here without any significant software development.7. Attire: This is strange, but attire culturally plays a strong role in schmoozing the recruiter / hiring manager, ultimately getting a job (esp. in big companies), sometimes even in career progression. As long as meritocratic practices are not completely abandoned, this is probably an 'interesting' experience. This poses specific problems for software engineers who usually rests more weight on algorithms, coding, system architecture & performance as opposed to extrinsic attire.8. Business Culture: Business Culture usually represents a microcosm of the society in general and Australia is no exception. Here, it's a deeply class-based, un-meritocratic, discriminatory culture with a gigantic display of Peters Principle, utterly ignoring any modern management practices. Interestingly the prevailing business culture affects not just immigrants (by a greater degree), but pro-innovation local talents as well. Fuelled by mining-boom-driven complacency, singular focus on "leave office by 5" and "how to avoid office work" gestated a toxic work-culture with an alarming level of corporate politics, analysis-paralysis, stupid and convolutional policies, multi-layered decision-making, nepotism and an unfounded fear towards innovation-driven technological disruption. I've heard some corporate folks here literally whingeing - "Evil Google AdWords is killing our 'golden goose' - classified business - where we used to rob our users by charging an exorbitant price. 90s, where are you ?". With total sympathy for workers who have lost their jobs, I rejoiced when many un-innovative and arrogant local businesses (talk to Sydney people about how happy they were when they discovered Uber to dodge highly arrogant and unionized local Taxis) have to give up at the advent of ruthlessly meritocratic American capitalism and entrepreneurship. It will be much more fun when the oligopolistic Australian banking sector have to forgo a substantial part of their lucrative brokerage revenues (brokerage fees are unbelievably expensive here like pretty much everything else) at the face of brilliant execution from Robinhood (Loyal3 on its way as well. Although brokerage arms of big banks are lobbying against Robinhood in order to continue to rob retail Australian investors with insane brokerage charges). Another example of encroachment - Google and Fairfax playing a different tax gameThe paradox is that Fairfax shed so many staff that it found itself sub-letting the entire second floor of its Darling Island headquarters to none other than Google.A leading bank reported following concerning statistics regarding their Directors’ credibility -less than 3 per cent of our directors have a technology background and only 19 per cent have operational experienceSomebody or something has to wake up undeserving Australian corporate leaders (and plutocratic boardroom incumbents) that world has moved on since Office Space and corporations can no longer be run by an elitist group of bankers, lawyers and privileged class (Why Australian workplaces need much better leaders). Innovators, engineers and DO-ers rule now ! It's an age of technological innovation and entrepreneurial thinking (both intrapreneurship and entrepreneurship). Much-touted Australian Work-Life balance has to have its cost, after all. Yet, focus is still on cost-cuts and BAU (Business As Usual) as opposed to new value or business creation.In a risk averse socioeconomic setup, crowded by an army of institutional and individual consultants, it’s not surprising to observe the feeble presence of production or manufacturing segments (As a Blackmore shareholder I was taken aback when some investors toured the Blackmores facility on Sydney’s northern beaches — all they could see was packaging rather than manufacturing. “It’s just a bottling operation,” one investor told The Weekend Australian) of the economy (as the massive economic dependancy to China continues). Interestingly, among these consultants, I’ve observed a strange form of institutional collusion usually seen only at the upper echelons of management or executives. Before immigration to Australia, never heard (never encountered in US directly or through various casual interactions with numerous friends and contacts) of the term - “milking company X together” - a reprehensible practice where a ‘gang’ of consultants all hired as contractors (often high value, 800$-1000$/day) to the company X, intentionally defer a specific project by months in collusion with a management executive, against the interest of the company X. Without a whistleblower this type of corruption is extremely hard to catch and particularly flourishes in a ‘laid-back’ culture where almost everything is contracted out (see. agency problem) without giving much importance to transparent corporate governance, meritocratic recruitment and fair capitalism (and it’s usual motivational bells and whistles like - Employee Stock Options Plan etc.). In fact, based on my subjective observation, ESOP seems like a “mystical” remuneration here unless you belong to the Executive Management or C-suite.9. Housing Price: With Rent-to-Income ratio close to 50%, and Affordability Ratio (median house price divided by median income) close to 12x (unaffordability is defined at 6x), Sydney housing market is in a bubble. When it will burst, no body knows. (Housing 'severely unaffordable' as Sydney price to income ratio worsens) It's difficult to bear CoL expenses with your income alone, unless you have a partner/spouse/wife working. Raising kids is a whole different story altogether. My heart goes to many middle-class Australians who can't afford houses/units of their own, without taking staggering amount of debt for a house that have a high chance of being depreciated, if the bubble finally bursts.Median US house price is almost half of median Australian house ! (even after accounting for currency conversion).At past, many had purchased multiple investment properties with LVR (Loan-to-Value ratio) as high as 90% (and above) before government made a change in regulation. Government deserves accolades for this. Sydney house prices have surged 50 per cent in just three years, sending Australia’s total real estate assets to GDP upwards to 3.8 times. This is higher than experienced at the peak of the Ireland and Japan housing bubbles. Australia now have the highest level of household debt to household disposable income in the world and the country is expected to lose more jobs and opportunities as it prices itself out of the global market. It's too expensive to take risks and too unaffordable to build startups or buy apartments. Big 4 banks of Australia are neck-deep in their exposure to property loans (Australia's banking regulator is worried about the big four's level of exposure to property). Many greedy (and rest of the bystanders are trembling under FOMO - Fear Of Missing Out) investors are still banking on the demand fuelled by steady inflow of international immigrants like you to defer the inevitable - Great Australian Property Crash.Australia needs to diversify its economy, boosting services exports - primarily tourism, education and health - rather than continuing to depend on resources and debt-fuelled property growth10. Career Progression: Compared to US, xenophobia here runs deeper and manifests often in career progression (especially higher management) subverting meritocratic practices. Barack Obama (President of US : 2009-2017), Sundar Pichai (CEO of Google), Satya Nadella (CEO of Microsoft), Indra Nooyi (CEO of Pepsi), Shantanu Narayen (CEO of Adobe) - all are glorious examples where meritocratic practices has been honoured dismissing any discrimination based on race, look, cast, creed or religion. I will be interested to know how many big Australian corporations or companies have a CEO with an Asian origin (preferably 1G). Overall statistics portrays a dismal picture -Australians of Asian cultural backgrounds account for nearly 10 per cent of the country’s population but they only account for 1.9 per cent of executive managers, 4.15 per cent of directors and 1.3 per cent of federal parliamentarians.Forgot to mention that, for a majority of cases, your previous Asian (technical/IT) experiences and job-seniority will be discounted no matter how relevant or awesome those experiences were. Most probably, you have to literally start from scratch or accept a demotion at the least. One smart way would be to have a - "test the waters before you sail" strategy. Conduct a reconnaissance before leaving that secure job back home.Keeping racial discrimination aside, there is another interesting aspect of career progression - 'Mate-o-cracy' - where meritocratic practices are completely disregarded. Without passing a judgement on their unfathomable diverse skill-sets, I've observed a journalist promoted as Director of Software Engineering, a successful real-estate salesman working in a High Tech Patent Firm sifting through technical RFPs (Request For Proposals) and many such blatant labour market aberrations.11. EducationOne of the obvious ways to rise above discriminations and attain greater social mobility is Education. Australia has some top-class Universities (ANU, UNSW, USYD, UMELB - to name a few) with world-class research facilities and faculties. But the problem is - absorption of these students into the mainstream local industry utilising their massive talent-pool, focusing on innovation and job-creation keeping all sorts of discriminations (which cost a lot of money to the country, BTW) at bay. Over-focus on mining and few other ancillary industries, did not help to flourish other areas of the economy especially the High Tech market. This makes talent absorption difficult (a far-cry from US). In general, based on my observations, historically education had NOT been perceived as important (social aspect of "tall poppy syndrome" is partially responsible for this) by the local industry (ignore super-niche areas like Finance and Medical Research - which are tiny in size) focusing more on work-experience and on-job-learning. Although this seems meritocratic at first glance, because of rampant discriminations and 'Mate-o-cracy' syndrome described earlier, it hinders social mobility. Although some initiatives by government (National Innovation and Science Agenda) are indeed encouraging, social perspective will take longer time to change.12. Cultural IntegrationUnless you love to stick to your own specific Asian community, it will going to be extremely challenging to integrate or "fit in" (An example - Jason Yat-Sen Li: Being Australian is not about the colour of your skin ). Probably it will take an entire generation. Children of 1G immigrants suffer more to "fit in" compared to what I've seen in US. Bullying is like an epidemic here at school level (Schools 'should be ranked on bullying' to prevent mental health problems, psychiatrist says). Of course, like everywhere else, you can teach your kids to be tough on such circumstances. A good portion of those school bullying is racial in nature and let's accept that sustained bullying is pretty bad for kids.It's shocking to discover people, psychologically, still living in the Victorian era basking in the glory of mining boom days, ignoring all sorts of disruption and democratization technology is creating. Irrespective of endless denial (denying racism is a form of racism - which is pretty common here) institutionalized by public media, you will be repeatedly judged according to your British dining etiquettes, your attire, your skin-colour, your name, your origin etc. Australians place high importance on "humour" (which is great), but often the boundary is pushed too far, bordering with the tradition of "British dark humour" and "racist funny jokes".Chronic underrepresentation of ethnic minorities in public media has justified the existence of NITV (Home | National Indigenous Television | Australian TV | NITV). However, this is not unexpected from a country which upheld highly discriminative policies like White Australia policy till 1973. By the enforcement of Racial Discrimination Act 1975, there has been an effort to declare racial discrimination unlawful, but since then it has morphed into a "subtle" form (ex - police treatments, career progression, social interactions, faux interviews, property renting etc.). Hopefully scenario will gradually improve over time. Empirical evidence validates this. Based on my own Data Journalism study (data from: http://data.gov.au/dataset?q=discrimination), here is a heatmap of the trend in racial discriminations complaints as received by Anti-Discrimination Board NSW. Even though things are getting better holistically, much more improvements are needed in the crucial Employment and Good & Services sector.(Please keep in mind that these are just numbers of complaints serious enough to be reported to ADB-NSW, a tiny sample compared to the unreported ones).BTW, Sydney is the most multi-cultural and least racially discriminative city. Melbourne < Brisbane < Perth < Adelaide is my own subjective ordering (ascending) by racial discrimination. In general, smaller population and high crime-rate do correlate with increased racism. http://alltogethernow.org.au/racism/Observed strong Intra-Asian racism especially from my 2G (second generation) or 1G (immigrated at their early childhood with predominantly wealthy parents) Asian brothers and sisters. A little bit of forgiveness, empathy and tolerance can do wonders against all such hypocrisy. Intra-Asian racism is significantly stronger in comparison with US. Because of lack of importance of meritocracy at the foundation of the society, many racially diverse but talented folks regularly gets evicted out of the country perpetuating some kind of ‘Artificial Selection’, strengthening the myth of white supremacism. Akin to the social dynamics of colonial days, you may observe many (more than what I’ve seen in US; it may change now under Trump) situations of unjustified (and downright foolish) ‘worship’ of Caucasians and exploitation of Asian folks by their own elites. This, IMO, stems from the same root issue of lack of collective belief in meritocracy.The funny part is - all these silly discriminations are causing the country a lot of money - the economic impact of this is massive, especially when Australia is standing at the edge of an impending multi-year recession. As Haas Institute has found out -Of course, you can ignore all these with a typical banter. Unfortunately you will be overpowered (depends on your sensitivity OR how much you care about cultural integration beyond Asian cliques), unless you are lucky or retract back to your Asian community. Many asians dodge these discriminations with a combination of - clique-formation, "fair" skin, wealthy background/entrepreneurship and an Anglo-Saxon-looking name. Darker-skinned asians with a non-affluent background (including me) are not so lucky.US has it's own racial discrimination issues, but over the years it has been structurally weakened by a combination of - Civil Rights Movement (1954–68), "economy-of-scale", meritocracy, diverse job opportunities, true free-market capitalism, top-notch universities, vibrant StartUp culture etc.Update:Motivated by Brexit and resurgence of other extreme (far) right-winger parties across Europe, in the aftermath of Trump’s election, right winger parties are gaining traction here as well. So, it remains to be seen how the drama unfolds across the spectrum of world politics. Interestingly people here with strongest denial of racism are turning out to be biggest supporters of Trump. Hypocrisy unveiled ! It’s extremely frustrating to observe that the repackaging of old colonial technique of “Divide & Conquer” is winning.Overall ImpressionThough Australia (executives, entrepreneurs in particular) believes - Asia and an appropriate strategy for Asia is of utmost importance to its future economic growth prospects, there exists various invisible "glass ceilings" & "glass walls" (some of them are insurmountable) thwarting career progressions of Asian people (mostly 1G, less for 2G) residing here. Check this forum thread - http://forums.whirlpool.net.au/archive/1936071If Australians, on average, would have embraced meritocracy and capitalism more than racism & socialist-tendencies, the economy could have been much much more prosperous as opposed to the current state of affairs. If you are of European descent, have an Anglo-Saxon name and suffering from winter depression this is a great country to build your career.It may be possible to focus on your hourly pay-rate while ignoring the entire spectrum of socio-cultural issues described above. Personally, I've decided to go back. Thanks to Australia, I've attained a renewed vigour to combat racial discrimination and social inequality back in my home country. Slightly digressing: we all can do better than our hunter-gatherer ancestors by declaring a crusade against racism. This Human Migration map is so unifying and inspiring -Source: The Human Journey: Migration RoutesBottom line: If you have a H1B, go to US. But having travelled to Bangalore & Singapore recently, I believe, as long as you handle the smog and congestion, the best place to be during 2015-2020 would be Asia, especially in Bangalore (lots of startups, lots of opportunities including social entrepreneurship, massive consumer-base hungry for innovative products and solutions, lots of funding from Asian and American Venture Capitalists/HNIs. Please refer to this excellent Quora answer - Siddharth Pathak's answer to What is going to be the next "big thing" in the next 5-10 years? ). West had their time; It's time for the East :) Anyway that's the content for another post.

“The future” is a big place. Tomorrow? Next week? 30 years? Anything could happen, given enough time. So the variables here are many and often quite large in both scope and impact. Rather than try to make sweeping educated guesses on what could happen, I’ll mostly stick with what we know and extrapolate a few key thoughts moderately. It will still get weird, I promise you.Of course it could all go out the window in one big hit. Britain could actually exit the EU, for example, and trigger all sorts of shakeups. Weirder things have happened. Trump may win the presidency. We may go to war against New Zealand. An asteroid may strike us all down. Who knows?More predictably and somewhat gradually at first, climate change will press ever harder on our lives. A big economic impact will be felt as we adjust our agricultural mix to new rainfalls and temperatures; and coastal cities will be reshaped we as begin to cope with regular inundation. If we get the timing wrong on our adjustments, especially if we leave it too late, then we’ll risk unplanned mass evacuations, loss of access to vital infrastructure (like seaports and airports) and a very big bill to pay.We could always retreat to the hills, of course.Which will happen globally, of course. We will likely see increasing numbers of climate change-related refugees. Regionally speaking we are are the biggest, wealthiest magnet in the area and for many of the threatened Pacific island populations Australia will look like a safe haven. We may also be attractive to other regional groups, most likely South East Asian populations forced to flee from rising sea levels. However any social or economic impact will be balanced by our knowledge that refugees tend to make good, highly motivated citizens who generate more wealth in the longer term.I won’t dwell on climate change, but just think of the ripples that it will send into the property market alone. Ripples that will build into waves. Increasing coastal erosion is a given, and dealing with that on its own would be hard enough. But rising sea levels combined with erosion will gradually cut major rail and road links if nothing is done. And expensive waterfront homes will find themselves surrounded by levees, isolated and inaccessible except by boat, or simply underwater. Managing the steeply rising insurance cost against the downward-heading market value of coastal property will be the least of our worries.Of course all of this value loss impacts on people and their ability to repay their now over-valued mortgages. There are social as well as economic costs to be borne, and a tsunami-like property “bust” would not be ideal. Deflating - slowly, hopefully - any current property bubbles sooner rather than later would be advisable. But we know this.At least that’s all very predictable and we can make decisions now to prepare for it. (Cast your votes carefully tomorrow, for example.)But much of what will influence and shape our future is not so clear cut. Nevertheless let’s stay on firm ground and not speculate too wildly.Economics is the study of people and their activities, in particular the exchange of goods and services. Now most such transactions, in Australia at least, are local. But we also exchange with the world, too, by exporting and importing. Add it all up and you get our national “economy”.Before I go on, yes, exports matter. We need to engage and trade in both directions for many reasons. Our floating exchange rate and our balance of trade also matters. It all interacts, influences and integrates with our domestic economy. And external conditions, what our trading partners do and say, will shape many of our own economic responses. But focusing on trade above everything else, is also a mistake.With 24 million people to provide for, most of our economy is focused locally. We have to feed, house, clothe and generally look after the health and well-being of everyone before we do anything else. We individually and collectively shop for goods and services and by those daily actions either directly or indirectly employ retail staff, administrators, transport workers, tradespeople, the police, carers, the defence force, educators, doctors, bankers, insurers and various others to keep things as we like them.That’s a lot of activity just keeping everything ‘ticking over’.Indeed this is all basic economic activity that happens daily. Now in an absolute crisis we could all lose the ability to pay for these goods and services; we’d certainly see a massive loss of value all along the chain. However there is a certain confidence and trust, misplaced or not, that we as a society can predict and manage our resources well enough to avoid such worst-case scenarios. That has been the recent case, anyway. So fingers crossed, eh?If you looked at the Australian economy as a layered thing, like a cake, you’d have the bulk of it being the daily exchange of those basic goods and services. And it’s pretty resilient, within limits. And it has what may be seen as having inertia, acting to dampen both accelerations and decelerations. (Which can be bad news if the direction is down when you want it to go up, of course.)It’s that reluctance to change direction that smooths out the regular bumps and smaller shocks. Of course the bigger the hit, the greater the impact on our economic direction (be it up, down or stable). When required the Federal and to a lesser extent the State governments take fiscal action to either cut back or increase spending, and in so doing will choose the areas where, if a strong effect is wanted, the biggest economic multipliers cane be found.Let me explain that in very general terms.If cash can be put directly in the consumer’s pocket then that’s best, impact-wise, although such spending may be deflected into personal savings, loan repayments or the purchase of imports, limiting or diverting the desired effect.Another likely target for spending is the building trade. It’s labour intensive, so it improves employment, and it again puts cash into people’s pockets, who then go and spend it in local shops for example. By targeting specific building types, be it grand infrastructure projects or home building, you can adjust to the impact you want.Local, smaller-scale building has a quicker, more powerful impact that can be fine-tuned to certain target areas, be they greenfields housing estates in outlying suburbs or public schools across a wider area. They also burn long and bright into the economic night. New houses satisfy a need, and they create a demand for builders, obviously, but also for other trades. And then support services (like hot meat pies) for the builders and tradies, and then later demand for whitegoods, electricals and other furnishings, and roads, shops and schools and every other service new families in their new homes need, onwards into the future. It can of course have undesired effects on housing markets or overall inflation, of course.I should add that our central banker, the Reserve Banks, monitors economic activity and fiscal stimulus overall and adjusts monetary policy to suit. They seem fairly adept at it, lately.Anyway, in contrast to the smaller scale cash-splash, the big ticket or “visionary” infrastructure is slower to kick off. It has a long gestation where money is spent on pre-work design and consultation, perhaps years before any dirt is turned. It’s more of a slow burner in economic terms, although the impact grows large over time. When the big project ends you are left with only maintenance, of course, so it can be a painful end. Which of course begets the next big project.And so on. What I’m saying is that Governments - and the Reserve Bank - are well aware of cause and effect and have good advisors to help keep the boat afloat, as it were, using what is variously a range of sharper or blunter tools.I’m also saying that the tertiary sector - and yes it blurs across a continuum between a mixed mode of real stock (like a sack of coffee beans) and pure service (like the value-add your favourite barista gives you) is both our “engine room” and our “inertial mass”. It’s big, it takes a lot to shift and it’s where you can make the biggest economic difference. It’s also tunable, if you take care and aim your spending wisely.Actually making things - the manufacturing sector - is a much smaller slice of our much-abused cake, and primary production, like agriculture and mining, is smaller again and very cyclical (in tune with overseas demand and supply and the weather, basically). Manufacturing is born out of but also threatened by new technologies, as it has always been.I wrote the above paras to help keep perspective. Whilst it’s not about just one thing, but as elephants in the room go, tertiary is a pretty big pachyderm.And then there’s the future, and any possible threats. Today’s big manufacturing unknown is just how great the impact of 3D printing will be, and how soon. Potentially everything could be manufactured bespoke, onsite and on demand.This not only impacts manufacturing itself but the transport and building trades as well. In a worst case (or is it best case?) manufacturing becomes more like architecture, a consulting design service that comes up with a product that you can order online. What gets delivered could be a mix of bulk injectable/liquefied materials and an industrial-strength 3D printer coupled with a team of “assemblers” or perhaps supervisors. All of the plumbing and electricals are formed into an integrated assembly that is “printed” onsite. The economic shift will be major, no matter what.Which segues into the “ideas economy” and internet connectivity, of course. Ultimately a much wider range of goods and services will be made available remotely, with human involvement shifting away from “hands-on” and onsite work to remote creativity and design from home or office, with a dash of coordination thrown in. The brawn as it were will shift towards highly skilled technical supervision and design teams coupled with less skilled delivery and assembly “supervisors” who will make sure everything goes as planned.The way such teams may come together could be more like a movie crew, specialists brought together only as needed, and just in time; only to disperse and move on to another job afterwards. They may never see the finished building or design, they just do their specific segment and move on.If you think this through far enough, Australia could develop the full package and deliver - export - it globally. It’s one big niche that we could be good at.It does mean rethinking how we form teams and deliver products. But such things impact how we survive as an economic entity, too. You could throw in “sustainability” as well, just to make it all the more meaningful and challenging!You may have noticed that the dominant right-wing Australian political spin has changed in recent times, moving from aggressively championing the miners, who apparently were so vitally important to the Aussie economy and yet were willfully and mortally threatened by both a left-wing tax on “super” profit and a ‘wrecking ball’ tax on carbon emissions, to a recognition that small business is in fact the engine room of our economy. Well at least the rhetoric is closer to the mark now!Small business and the “ideas economy” is indeed where it’s at. If only we had decent broadband to go with it.Anyway, back to our cake.Sadly, it’s not a cake after all. It’s more interconnected than that. Economic signals ripple and reflect around like a neural net. And yes, the economy is modeled a little like that, down to very fine detail. Questions are asked, like if X sneezes, what catches a cold? If primary sector exports collapse, what happens to overall employment levels, or to inflation? It’s not a secret that “things happen” or that think-tanks probe the possibilities.Politicians may act surprised at times, or over-state or underplay some sector’s importance for their own purposes - as in getting elected - but they are actually well briefed. The climate change briefings are known to have started at a federal level in the early 1980s, for example, if not even earlier. Ideology may or may not get in the way of these things, and cause delay or missteps, but they can’t say that they weren’t warned.Whilst the manufacturing and primary industries are significant, they used to play far bigger roles in the now-receding medium-distance past. Instead services - the tertiary sector - has stepped up and taken the lead role in the economy overall.Just go and look outside, at all of the life coaches, tutors, exercise trainers, website creators, dog-walkers, lawn-mowers, naturopaths, carers and what have you small businesses that are out there today that were unknown or hardly to be seen 30 years ago. And then factor in the burgeoning ranks of human resources staff, the occupational health consultants and inspectors, the internet providers, the mobile phone companies, the professional indemnity insurance market and the umpteen hidden businesses that provide specialist services in the health, financial and education and pre-school sectors.Let alone all of the baristas in the coffee trade.Whilst the secondary and primary sectors are indeed very export-focused, the education and financial services sectors have grown to rival them in export earnings, too. Which is good, because we need a diverse range of export earners to balance out the cycles. Of course if all of the cycles came together in phase at the same time we’d have a problem. But again that’s worst-case.Whilst tourism is a significant part of today’s service economy and also brings significant foreign currency into the country, it could and most likely would collapse in a world-wide economic “hit”. So we really do rely on regional and extra-regional economic health to keep the wheels turning there. Again, even global downturns seem to leave some people with enough spare cash to come visit. Fingers crossed, then.There are so many possibilities and so many challenges ahead. I would propose that essentially, barring the catastrophic, Australia’s economy is well placed to withstand most shocks and even a few big knocks. It will continue to be reliant upon the vast mass and inertia of day to day basic transactions and as our population grows that will become even more evident. However there are vulnerabilities, areas where we have lagged in taking action, that do expose us. Planning for and addressing climate change is one such area, broadband rollout (or connectivity, to be more specific) is another.We have seriously let both of those slip, after a promising start.Technology will advance with or without us, and manufacturing in particular but many other areas as well, will reshape and collide and dissolve into new forms over time. So prepare to re-skill. Quickly.Above all education, creativity and connectivity will be paramount in the new economy and our need will be great: we must maintain effective, bankable differentiation - a real competitive edge - if we expect to maintain our living standards in the face of increasing global connectivity and decreasing barriers to trade. Get all of that happening, add in diversity and sustainability and we’d have some insulation when any crunch comes along.I’m optimistic. Just.Further reading:Robert K. Russell's answer to What is special about the Australian economy and Australian way of business?