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"Disruptive Reforms?"


GJG

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Govt job plan has long term unemployed focus - RTÉ News

This story on rte.ie previously had the term "disruptive reforms" in its now-changed title. The phrase has been retained in the first sentence, in quotes, but the meaning was not explained and it was not repeated in the article. There wasn't much in the article that could refer to this phrase either.

My ears prícked up when I heard the phrase, because I wrote a book about this. My understanding of the phrase "disruptive reforms" is very specific. It refers to reforms that remove the competitive advantage of incumbents and allow new market entrants a chance to compete, or to motivating existing businesses to be more competitive or better-behaved. It is a polite way of saying kicking the asses of vested interests. The café-bar idea from the mad Mullah (shot down by the mad Gombeen) would be a classic example, but there are thousands of other ideas that would cost the state nothing and dramatically improve performance.

One I suggested referred to requiring the display of a web address and smartphone code wherever the state has to inspect something, allowing the public to submit information. Then, say, health inspectors could use this information to make more targeted inspections of restaurants.

Of course there are many people who would not welcome this - health inspectors and dirty restaurants - but the whole of society would benefit; less hassle for well-run restaurants, fewer puking customers, lower cost of enforcement.

If the government has been converted to the benefits of standing up to vested interests, this is a big step forward. Am I hoping too much? Or did some functionary just happen across the phrase and stick it in because it sounded good?
 

GJG

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At a guess, they picked it up from speaking with tech companies, where the concept of technology disruptions leading to market success would be well understood, and common speak in the venture capital world. Think the Apple Ipad, and what it has done to the PC market.
I think that there is a real possibility that they picked up the phrase without understanding it. Nevertheless, I think that it is very interesting that they appear to be promising exactly what Ireland needs. Is it a coincidence? This was the buzzword that they just picked from their reform-bingo hat? Does anyone think that they actually understand what it means?
 

jmcc

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I wonder if some FGers could explain the concept of "disruptive reforms" where it applies to getting Irish businesses online?
 

feargach

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My understanding of the phrase "disruptive reforms" is very specific. It refers to reforms that remove the competitive advantage of incumbents and allow new market entrants a chance to compete, or to motivating existing businesses to be more competitive or better-behaved. It is a polite way of saying kicking the asses of vested interests.
...
If the government has been converted to the benefits of standing up to vested interests, this is a big step forward. Am I hoping too much? Or did some functionary just happen across the phrase and stick it in because it sounded good?
Well, what vested interests do you see being threatened by the proposals in the linked article? I can't say I see any.

Also, while I can see the obvious attraction of whacking vested interests, I can also see some hypothetical situations where it would be reckless to tackle some vested interests right now in the middle of the greatest depression ever.

Imagine there's an industry that benefits from over-regulation, that employs 10,000 people. Assume that by slashing lots of regulations, the existing industry would go bust, leading to the state being liable for €10 million in redundancy payments. Not only that, 5000 families will lose their main breadwinner and will fall behind on their mortgages, thus directly burdening state-owned banks. New businesses will take the place of the old ones, but because they're leaner and jobseekers are desperate and willing to do 10 extra unpaid hours a week, only 6,000 full-time positions will be created.

So by a gung-ho attitude to slashing vested interests, we'd make the depression significantly worse. Yes, it would make a small number of entrepreneurs very rich, but it would shift the very considerable costs straight onto the taxpayer.

On balance, going after vested interests is usually the best thing to do, especially when the economy is booming, but sometimes exercising a touch of discretion is actually wiser in the medium term, during periods when the economy is in deep crisis.
 

GJG

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Well, what vested interests do you see being threatened by the proposals in the linked article? I can't say I see any.
Exactly, that’s what I mean. They are using the vocabulary of very radical reform, but it’s not even clear if they understand the vocabulary, let alone intend to follow through on it.

Also, while I can see the obvious attraction of whacking vested interests, I can also see some hypothetical situations where it would be reckless to tackle some vested interests right now in the middle of the greatest depression ever.

Imagine there's an industry that benefits from over-regulation, that employs 10,000 people. Assume that by slashing lots of regulations, the existing industry would go bust, leading to the state being liable for €10 million in redundancy payments. Not only that, 5000 families will lose their main breadwinner and will fall behind on their mortgages, thus directly burdening state-owned banks. New businesses will take the place of the old ones, but because they're leaner and jobseekers are desperate and willing to do 10 extra unpaid hours a week, only 6,000 full-time positions will be created.
Firstly, I agree that there is no valid reason to attack a vested interest just for the sake of it. The purpose of attacking a vested interest is to free up the market to allow innovative challengers the chance to compete. There would have been no valid reason to split up and open to competition in the telecoms market of the 1960s, for example, because the technology to facilitate that did not exist. By the 1980s, the thing keeping Telecom Eireann/Eircom strong was not their innovation or strength of offering, it was just their ability to choke off all competition.

But the general thrust of your comment is wrong. It would be possible to, for example, protect the VHS Tape market, or the fixed-line telephone market, or hand-loom trade by banning their successor products, or just making life so awkward for them that they can’t overcome the installed base of the existing operator.

That would give a short-term gain, but eventually all industries must move on, and if you live in a country where all legacy industries are given excessive protection from innovation, you will end up in an economy like North Korea. The cost of that action is greater than the benefit, although the cost is spread more thinly than the benefit, so those benefiting will no doubt have much louder voices in that debate.

On balance, going after vested interests is usually the best thing to do, especially when the economy is booming, but sometimes exercising a touch of discretion is actually wiser in the medium term, during periods when the economy is in deep crisis.
Can you give an example of where going after a vested interest turned out to be bad for the economy? Or where protecting them worked out well?
 

Mad as Fish

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I wonder if some FGers could explain the concept of "disruptive reforms" where it applies to getting Irish businesses online?
Alas though there is very little reward or incentive for many Irish businesses being online if their customers are not, or only to the extent of FB and Donedeal.
 

GJG

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For example, supermarkets and filling stations are required to tell consumers their prices, but only in a very C20 way, by printing it on a ticket on the shelf or a signpost outside the filling station.

If they were required to make their prices and locations publicly available in an online database, it would be possible to construct apps that would place those overpriced markets under considerably more competitive pressure, inform consumers and force down prices. I would regard this as a disruptive step with huge potential benefits and near zero cost.
 

Mad as Fish

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For example, supermarkets and filling stations are required to tell consumers their prices, but only in a very C20 way, by printing it on a ticket on the shelf or a signpost outside the filling station.

If they were required to make their prices and locations publicly available in an online database, it would be possible to construct apps that would place those overpriced markets under considerably more competitive pressure, inform consumers and force down prices. I would regard this as a disruptive step with huge potential benefits and near zero cost.
Sadly, experience suggests that simply waving a computer at things is not always the true path to wealth and happiness.
 

Didimus

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From the actual document
" Finally, with our new approach to partnering with private industry to support the implementation of these “Disruptive Reforms” I am convinced that our combined efforts working towards a shared goal will achieve more, with less and in a shorter time than would otherwise be possible. "
 

GJG

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Sadly, experience suggests that simply waving a computer at things is not always the true path to wealth and happiness.
I couldn't agree more, though that does seem to be the preferred m/o of successive governments. I think that well-thought out use of technology can have huge benefits though.
 

jmcc

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Alas though there is very little reward or incentive for many Irish businesses being online if their customers are not, or only to the extent of FB and Donedeal.
This is exactly the point that I made on the FG thread on Disruptive Reforms. Most people, especially politicians and civil servants and their advisors do not understand the nature of trading on the web. The key issue is a product that can be sold easily on the web and also, sometimes, delivered easily on the web or in real life. Anything other than that is just brochureware advertising and the web is mainly brochureware. You do have massive walled gardens like Facebook and Google+ but these are large skyscrapers in a very flat terrain.
 
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Mad as Fish

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I couldn't agree more, though that does seem to be the preferred m/o of successive governments. I think that well-thought out use of technology can have huge benefits though.
I can only see tears arising from this super new database they are planing for the house tax. They've already admitted that it's going to be wrong from day one and that's before it gets filled with all sorts of rubbish by the disgruntled of this country. Data that is incorrect is a often a lot worse than no data at all.
 

Mad as Fish

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From the actual document
" Finally, with our new approach to partnering with private industry to support the implementation of these “Disruptive Reforms” I am convinced that our combined efforts working towards a shared goal will achieve more, with less and in a shorter time than would otherwise be possible. "
Which means exactly what?
 

Frank Galton

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Nicolas Sarkozy got a lot of mileage in 2007 out of the notion of a "rupture." But it's hard to say he delivered it, at least as it was intended. Of course, the slogan could come back in 2017 ....
 

jmcc

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For example, supermarkets and filling stations are required to tell consumers their prices, but only in a very C20 way, by printing it on a ticket on the shelf or a signpost outside the filling station.

If they were required to make their prices and locations publicly available in an online database, it would be possible to construct apps that would place those overpriced markets under considerably more competitive pressure, inform consumers and force down prices. I would regard this as a disruptive step with huge potential benefits and near zero cost.
It is called a "price comparison" website. ;) The problem is getting supermarkets to cooperate and there is a huge amount of data to process and compare each day. There was a problem with Ryanair a few years ago - some op was scraping their content and putting it on a comparison site. The other aspect is that many people don't use the web to do their shopping and those that do are locked into the supermarket sites. Their dataprint is a vaulable commodity to the supermarkets and the supermarkets have some of the largest supercrunching operations around.
 
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jmcc

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I can only see tears arising from this super new database they are planing for the house tax. They've already admitted that it's going to be wrong from day one and that's before it gets filled with all sorts of rubbish by the disgruntled of this country. Data that is incorrect is a often a lot worse than no data at all.
It could be done but it would require good database architects. One of the problems is that the data has a time context in that the address/valuation dataset might be easy to build but the ownership dataset is the one that creates the problem because houses are sold and or change ownership.
 

Carlos Danger

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It is called a "price comparison" website. The problem is getting supermarkets to cooperate and there is a huge amount of data to process and compare each day.
Living in the US, apps such as these are plentiful, and price comparisons are often incorporated into other, more useful apps. I do a lot of driving for work, and my $19.99 navigation app not only displays nearby petrol stns., but lists their prices also.
I feel that this is down to the shear number of consumers. I don't think there are enough consumers to support an app like this in Ireland. You probably know more than I do about how much it would cost to process the huge amount of data it would take to keep the app current.

On the OP; You have chosen a great example with the iPad. Love them or hate them, Apple have done a fantastic job. They didn't so much disrupt a market, rather, they created one.

Wayne Gretzky is the greatest hockey player of all time. When asked about his achievements, he replied, "The key was to be where the puck was going to be." Steve Jobs paraphrased him and said that Apple needed to be where the consumer was going to be.

When the iPod came out, not only did it change the hardware we used to listen to our music, it revolutionised how we buy music...and the whole music industry. A huge amount of legislation had to be written to facilitate said revolution. In most instances, I believe that governments are playing catch up with the private sector. I feel that it is the job of the government in these instances to create an environment where entrepreneurs will flourish. Maybe the disruption happens first and then they legislate the reform?
 

GJG

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It is called a "price comparison" website. ;) The problem is getting supermarkets to cooperate and there is a huge amount of data to process and compare each day. There was a problem with Ryanair a few years ago - some op was scraping their content and putting it on a comparison site. The other aspect is that many people don't use the web to do their shopping and those that do are locked into the supermarket sites. Their dataprint is a vaulable commodity to the supermarkets and the supermarkets have some of the largest supercrunching operations around.
Yes, exactly.

Insurance companies and some airlines are motivated to open their data to price comparison websites (and apps). But in more congested markets, the operators are not motivated to facilitate price comparison.

Supermarkets already have all their products and prices in a database - how do you think the tills work? Supermarkets are also required to tell their prices to consumers, but in a very archaic way - printing prices on shelves. This requirement should be extended to making the database available online so anyone who cares to make a supermarket comparison website or app has all the raw data available to them.

Of course the supermarkets wouldn't like it, they are profiteering and this is designed to stop them, so they will fight it like a bag of cats. But the point is that this is a free, regulation-lite way of encouraging competition and helping the consumer.

There is no need to shop on the web to check the prices on the web, and you only need a small portion of consumers to switch based on the pricing to exercise excruciating pressure on profiteering supermarkets.
 
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