20 minutes with Dr Matthews: The master of entrepreneurship
Professor Charles Matthews from the University of Cincinnati joined Public Accountant at the IPA Deakin Small Business: Big Vision event, where he discussed the steps we need to take to prepare for the changing nature of work.
Dr Matthews is an internationally recognised scholar and distinguished teaching professor of entrepreneurship and strategy at the University of Cincinnati. His teaching and research span strategy, innovation, entrepreneurship, family business, decision making and more.
He has engaged in economic development in China, the former Soviet Union and has co-authored a book on innovation and entrepreneurship.
Public Accountant sat down with Dr Matthews during his recent visit to Australia to discuss everything from the Australian small business environment to artificial intelligence (AI) and its impact on the nature of work.
What are your thoughts on the Australian small business environment? We have heard a lot about the entrepreneurial spirit flourishing in the US, how do we compare?
It’s an excellent question. It’s a little difficult to do a comparison when you have a large country, but 25 million people in that large country, versus a large country with 350 million people and multiple states producing goods and services. California being one of the largest, obviously.
Points of comparison usually lie along the positive scales. A great environment for innovation is usually fuelled by three things. Firstly universities, secondly the application of that knowledge, and thirdly the infrastructure and support, such as government and private sector support. Those three are very comparable.
Actually, the good news there is that because [Australia] is smaller, you’ve got greater opportunity for impact. The second positive is it is a very supportive environment.
There is a lot of good things going on in the entrepreneurship, MSME environment. While it can be difficult to navigate at times, it does exist. Finally, probably some of the lessons that carry forward are being able to replicate, duplicate some of the ecosystem processes that have occurred, from the government through to the private sector. Even though we’re a world apart, today communication technology, geographic travel technology, are better than ever.
You’ve got all these points of contact, there is more information available today at the ﬁ ngertips than has ever existed before. However, there is one danger I always like to mention when I talk about these kinds of comparisons – the Mount Everest model.
That sounds interesting.
I always ask my students, “How do you get to the top of Mount Everest?” It invokes a lot of discussion, and what they quickly discern is that they can’t just jump from point A to point B at the top. There is a lot of separate steps in between, including presteps. Sometimes you need to prep.
If you’re going to the top of Mount Everest you need to do some serious prep. So, you’re doing a lot of formulation before you can get to base camp and then you’re executing along the way. So, it’s a series of steps, not one big jump.
We have been talking about the importance of innovation at the Small Business: Big Vision conference, how important is innovation for small business and start-ups, especially in the current setting where we have digitisation and the evolution of AI altering the nature of work?
I think one of the key points there is, innovation can be both first level innovation where you are actually creating new and innovative products and services, or it can be the application of other developed, innovative products and services. For MSMEs, their innovation tends to be more around how they use that technology.
Today the changing nature of work is more complex than ever, there is AI, virtual reality, the internet of things, big data, data analytics… So, all of these things and more come together to influence how we think about how we’re doing business.
At the end of the day though we’re still delivering value, we still have to create and deliver value, because the driver of any successful business is the willingness of an individual to exchange value with that company. You won’t exchange value with anything that you don’t find valuable, so whether it is a carton of milk, whether it’s a new purse or a new computer, or just a service along the way, if it has no value to you, you won’t exchange value.
The most common exchange medium is money. So, we ascribe or attach value to that. That doesn’t mean that everything has to be cheap, what that means is that we are paying for the value we perceive – both real and implied?
There is a high-end automobile – a BMW, a Lexus etc – that will get you to do the same point and at the same time as a low-price car, so why would I spend $75,000 as opposed to $25,000? So, there are a lot of factors that play into that.
Today we see a lot of digitisation and electronics in cars, for example. A lot of people said there wouldn’t be a market for electric cars and you can’t make that claim until you recognise what that value exchange, or that value proposition, is.
And this changes the nature of work, too?
Yes, so the skills I learnt as an auto mechanic back in the ’60s and ’70s, while they’re not applicable to today’s cars, today you have the same model.
If I’m trained today as a mechanic, my role has shifted from a purely mechanical role to a mechanical and digital role. So today, I not only have to mechanically work on a car, I also have to plug it in and read the chips…
But a human is still required to do that?
Exactly… That doesn’t mean you can’t have artificial intelligence involved in that process, you can. And indeed, it may change to a point where you plug it in and the artificial intelligence capabilities are so advanced that they actually do the repair, that may occur. But again, that is called the changing nature of work, that is not worker displacement.
If I want to stay in the automotive industry today, what do I have to do? I have to get up to speed.
Should we fear the impacts of AI on small business?
Not fear. I think fear is not really the right emotion we want to have. Although, I think it does happen, people are afraid of loss and change.
Change is a tough thing. I don’t think that we need to be afraid of it, as much as we need to understand how it is affecting us, what we’re doing with it and what situations it’s applicable to and where it is not appropriate.
We saw this with genetics a number of years ago, with cloning. The whole issue of biomedical ethics is much different than it was 50 years ago or a 100 years ago. There are certain elements that stay the same, but there is change. So, again, the changing nature of work, we’ve done a pretty good job with that really.
We haven’t, however, always kept up with the changing nature of education. It’s tough. When online learning first came into focus, people said, “Oh, people can study whenever they want and listen to the lectures when they want”.
We saw pictures of people staying up at night and listening to whatever… No. That’s not going to happen, I don’t know what they were thinking.
Don’t get me wrong, it works, but you’re not going to just suddenly develop a 24-hour life cycle to stay awake and learn something.
So again, you have to manage that process. It’s not about fear as much as how we manage that process.