The wake-up call to shake-up humanity

Q&A with Andrew N. Liveris

An illustration of globe among COVID-19 particles.

Image: Vithun Khamsong/Getty Images

Image: Vithun Khamsong/Getty Images

UQ alumnus and global business leader Andrew N. Liveris (Bachelor of Engineering (Honours) '75, Doctor of Science (honoris causa) '05) has joined the Australian Government's National COVID-19 Coordination Commission tasked with limiting the impact of the COVID-19 crisis on the economy.

The former Chairman and Chief Executive Officer of The Dow Chemical Company, whose generous donation helped establish the Andrew N. Liveris Academy for Innovation and Leadership at UQ, is one of eight commission members advising Prime Minister Scott Morrison on non-health aspects of the pandemic response, while identifying opportunities for growth in manufacturing to enable Australia to bounce back.

An image of Andrew N. Liveris.

Andrew N. Liveris

Liveris took part in a Q&A with Contact to share his thoughts on how Australia’s economy can recover from the crisis, and how the world as we once knew it will change forever.

Q: How have you been spending your time during the COVID-19 outbreak?

A: Family time has been a big bonus from this, but my work schedule has certainly taken an interesting turn with this assignment to help the Australian Government. My afternoons and evenings are occupied with meetings over Zoom, Microsoft Teams, Webex, you name it. These range from board meetings to annual meetings – all in different time zones – which I find fascinating. We’re learning how to keep things running, and big decisions have to be made. In this environment, it really helps that I know the other people in these meetings very well. It’s more difficult when you’re meeting and making tough decisions with people you’ve never worked with before. But, we’re learning how to make all that work and, in fact, learning that you can be quite productive at the end of a digital activity can be a habit-changing thing. I do think it’s going to transform the way we work in a very large way going forward.

An image of Andrew N. Liveris.

Andrew N. Liveris

Andrew N. Liveris

An image of Director of Andrew N. Liveris Academy for Innovation and Leadership, Professor Peta Ashworth with academy scholars.

Q: Tell us more about your thoughts on a remote workforce? Will this be considered the new normal?

A: We had the grand experiment, in the corporate sense, with the productivity era of the 1990s and 2000s. Basically those workers that didn’t need an office worked from home, and the advent of technology enabled that. We also went to lower-cost corporate structures via the concept of hoteling and shared office space. At Dow, we had started to reverse that wave, putting back physical structures and recreating sales offices. The reason was because there is power in having an identity and interactions with co-workers. We didn’t go all the way back to having everyone in offices and doing the nine-to-five routine – there was still the concept of shared office spaces, open working spaces and hoteling, etc. But, there was a seminal shift that made us all productive.

I think we’re heading for another one of those shifts. We’ve all learned that digital actually works. If everybody is participating digitally, and knows the company and the people they’re working with, then I think we’re going to find out we can do a lot more on digital platforms. The technology of our digital platforms has gone to a new level and we have privacy and protection of data being introduced in a very firm way. I believe we’re going to eventually work out that we can downsize white-collar office spaces permanently and this will have a profound effect on CBDs, which will in turn have a profound effect on property markets, especially commercial.

The other trend is ‘online everything’. If ecommerce had already permeated into humanity, this has taken it to another level. I think there will be less physical shopping than ever before and much more online shopping.

But humans are social animals, and what this means for events – like weddings, funerals, celebrations, sporting events and concerts – is unclear. The future of events depends a lot on the development of a vaccine.

An image of a woman walking through an airport with her suitcase.

Image: Martin Barraud/Getty Images

Image: Martin Barraud/Getty Images

Q: You used to travel a lot for work. In what ways do you think the COVID-19 crisis will transform the way we travel for work and leisure?

A: Mass travel as we knew it, and even mass business travel – which has a profound effect on the affordability of airlines and aircraft manufacturers – may never return. That discontinuity may tailor humanity to be more regionally focussed, and use digital technology for everything else. So, then you might ask, “why would I fly from Sydney to Melbourne for a board meeting? Why do I need to be physically present? We know everyone and digital meetings are working quite well, what’s so important about physically getting together around a boardroom table and having dinner that night? Let’s do that once a year, rather than six times a year."

If we accept that as a massive discontinuity and become readjusted to a different type of travel, we might even change the way we vacation and do a lot more local or regional holidays. I think this is a profound discontinuity that could change the trajectory of mobility as a tectonic trend. In other words, those in the mobility business will have to rethink their value proposition. And that’s not just airlines. I haven’t used rideshare companies in weeks because of the hygiene aspect. When are you going to feel comfortable again to sit on a seat that someone else has sat on? This is an aspect of travel that we all have to get used to, including me. In fact, this is the longest I’ve gone without catching an airplane since I was a teenager. I haven’t been on a plane since mid-February, which is dramatic for me.

The only recent indicator that suggests humanity is very elastic and we might return to the ‘old normal’ pretty fast is September 11. There was a period of time after September 11 when people didn’t travel due to fear. But it didn’t take that long for normal travel to be restored. Maybe humanity is like that. Maybe we just have to be forgetful of the things that made us fearful or worried. The security at airports went to another level after September 11, so perhaps we will see a different standard of hygiene and sanitation, and will return to mass travel. Given the science suggests that this particular coronavirus may not have a permanent fix, I suspect we will go through a massive readjustment period, cut back on the intensity of travel and be much more discretionary about all sorts of things, like vacations and business trips.

An illustration of coins with graphs and charts, representing the health of the economy.

Image: Busakorn Pongparnit/Getty Images

Image: Busakorn Pongparnit/Getty Images

Q: So, how do you think the economy will rebound in Australia and around the world?

A: The scenarios we’re developing in all the corporate institutions I’m part of involve looking at a downside, such as a second outbreak or a delay in the development of a vaccine. In this case, I can’t see an economic recovery to pre-COVID-19 levels until well into 2021. You can look towards more optimistic scenarios, in which a vaccine is a silver bullet, but the probability of that is very low.

The economic pain that all global economies will go through will depend on how exposed those economies are to global supply chains. No more so than the one that relates to China. And because of that, economic stimuli have to be of the local kind. The band-aids being applied by the monetary policies, such as JobKeeper here in Australia, keep the consumer solvent and keep the household consumer employed, which is a good thing because the recovery from unemployment takes much longer.

But nursing that for a period of time has huge ramifications on national debt and doesn’t really create new economic paradigms. So, there is a need to create new economic paradigms quickly.

The best example of this is happening in China with infrastructure – roads, rail, bridges, apartment buildings, etc. They have considerable financial reserves, so they can do this without huge ramifications on their national debt. This will create a local economy that’s very different to the economy that went into the COVID-19 crisis, which relied on export markets like the US that were already being disrupted by the US–China trade war. That has accelerated China's desire to create a domestic economy based on government spending on infrastructure. This is being mimicked in other economies and I believe it will be mimicked to a large extent here in Australia. Of course, I hope the work we’re doing will do more than that, by creating entire new sectors that can help immunise the country. Other countries are doing this against global supply-chain disruptions, especially in key sectors like health care.

Those economic stimuli are going have a cost, such as mounting national debt, which will potentially have a second-wave effect on global economic recovery. One thing that is different now compared to the global financial crisis more than a decade ago, is that the banks have stood up pretty well and the financial system has stayed relatively strong. Because of this, we are able to do what we are doing to create economic stimuli. However, as more businesses fail, as consumption and government spending slow down, then debt will start to mount and the credit rating of nations will be put into question. Downgrades of corporate entities and businesses will occur, money will become tight and inflation can take root. We have lived without inflation for about a decade-and-a-half. If inflation returns and interest rates go up, it will be a double whammy on the economy and that scenario can only be overcome by gross domestic product recovery in a post-COVID economy. And that’s what governments everywhere are working on.

My role on the National COVID-19 Coordination Commission is to help craft an economic recovery plan based on key Australian capabilities, particularly technology and manufacturing, that will enable the economy to diversify its dependency on tourism and services, and even its commodity economy. One aspect that came up pretty quickly was a domestic energy policy that would enable the country to transition to a low-emissions economy in an orderly manner. It would be very hard for Australia to develop a case for scaling up factory capacity and capability if it has one of the highest energy costs in the world.

An image of Liveris Academy scholars sitting around a desk talking.

Q: The Andrew N. Liveris Academy for Innovation and Leadership at UQ attracts and develops the smartest young minds in engineering and science. What role do you see universities playing in helping the world recover from the COVID-19 pandemic?

A: The manufacturing and innovation sectors are completely connected, and Australian-based research institutions are world-class. The issue Australia has always had is commercialisation. We are definitely examining, on a sectorial basis, where Australia’s strengths are in terms of research capability and how we can help those sectors through a variety of different policy enablers. We take input from academia and universities, and we are building that capability and helping to scale it. We’ve got founder-based incubators and accelerators going around the country, which are seeing some success already. We have to ensure that we turn these into deep-tech and not just sub-tech. In other words, physical sciences of the biological kind. That’s where research-based universities can play a role. 

Q: Are there particular skills you believe will be most valuable going forward?

A: Skills based on workforce planning and talent development are important and are part of a demonstrated success model in the advanced manufacturing arena. You only have to look at countries like Germany, Singapore and the United States, where I was involved in two taskforces under presidents Obama and Trump to launch a national industrial strategy. We require vocational training and talent development for skillsets required in a digital era. Workforce development and training for a modern-day economy of the visual kind are needed to develop the industries Australia requires to compete globally in the 21st century.

Q: So, does that mean aligning education with industry in a stronger way?

A: I think Australia’s private-public partnerships lack what I call ‘active participation’ in the private sector. I think we need to get out of the ‘report-generating’ business and into the ‘recommendation-and-doing’ business, by allowing the private sector to play a bigger role in the skilling and education of the workforce.

An image looking up at the Australian flag at Parliament House in Canberra.

Image: Peter Pesta Photography/Getty Images

Image: Peter Pesta Photography/Getty Images

Q: Are there leadership lessons from the past that we can draw upon to help us get through this crisis?

A: Each crisis reminds us that values-based leadership – lending a helping hand – is the centrepiece of recovery. Having said that, the institutions that have to be formed to actually allow a recovery, and end corporate and government boundaries, have to be recrafted to suit the requirements of this particular crisis. And this particular crisis is global and multilayered. Governments have to lead but businesses and communities have to follow. I think it puts a premium on leadership and communication, and I give the Australian Government high marks for both of those right now. Good leadership requires courage, it requires taking a managed risk and sticking to your guns even though people all around you might be questioning you. This is where experience matters and these are the things I learnt during my time as CEO of Dow. As I watch government and businesses respond to flatten the curve and handle the pandemic, I see those qualities coming through all the time.

An illustration of hands holding the glove representing a sustainable future.

Image: Surasak Suwanmake/Getty Images

Image: Surasak Suwanmake/Getty Images

Q: Finally, how will the world be different, or better, post-COVID-19?

A: Philosophically, I think humanity has had a wake-up call. I think the planet has spoken and it’s saying, “you need to change the way your human systems are organised, change the way you treat this fragile planet and figure out better ways to create global institutions that can cooperate with each other.” So, we need to ask, “what can we do collectively to not let that happen again, and do we have institutions to get that done?” The answer is no. So, can we use this crisis and create those institutions, or do we go through a period of regression, economic nationalism and tribalism that brings us down to our local communities and makes us not want to relate to everyone else? If I had to put my chips on one of those two scenarios, I would put them on the second scenario lasting for the next four to five years, until leaders emerge. Maybe that’s a message to UQ’s Liveris Academy scholars: it doesn’t matter how old you are, leaders need to emerge to create institutions for the 21st century – a future that institutions of the 20th century have failed to secure.

An image of Andrew N. Liveris with UQ's Liveris Academy scholars at Customs House in Brisbane.

Andrew N. Liveris with UQ's Liveris Academy scholars at Customs House in Brisbane.

Andrew N. Liveris with UQ's Liveris Academy scholars at Customs House in Brisbane.

Visit the Andrew N. Liveris Academy for Innovation and Leadership website for more information about how UQ is building a generation of effective and inspiring leaders.

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