The transition from industrial to knowledge epoch has been marked by profound and significant changes. I had originally blogged about the macro level changes back in August of 2008 with posts: Forces of Change, Business Model Migration, Decline of the TV industrial complex and (from December 2009) Rise of the micro-multinatnional. At a national and micro level this has led to the following posts from October of 2011; The Winds of Change, the Gathering storm and Ottawa’s Economic winter. The following video provides IMHO a brilliant metaphor for where the economy is going … which I call catching the wave.

The trajectory of the economy is very much like that wave racing toward the shoreline. The adventurous entrepreneur types head out to sea in hopes of catching the wave early on and ride it to shore. Those people that are content with the status quo tend to bask in ignorance or worse wilfully ignore change or hope that it goes away, neither option is well advised.

In reality there are two choices;
- Take a risk and embrace change or, (catch the wave)
- Maintain the status quo and fight change (fight the wave)

The economic transition and momentum from the industrial to knowledge based paradigm shift is only going to increase. We see the early effects on industries like; entertainment (think Blockbuster), pulp and paper, media (print editions of newspapers/magazines will be gone in 5 years or at least be digital only). Great change is also a time of great opportunity.

IMHO there has never been a better time to become an entrepreneur, which leads us back to the next post in the “Transitioning to Entrepreneurship and what to expect series”. “Mental Change” is next Tuesdays post and there are some fundamental paradigm shifts in transitioning from employee to entrepreneurship.

Ian Graham

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The global economic outlook is very uncertain and there are those reading this post that would likely say: “This will strike many as a profoundly gloomy message.” which is a direct quote from the Drummond Report. However, the current economic reality is that we are in times of significant change that will be framed by very real and absolutely necessary austerity. I had blogged about this back in October of 2011 with posts “The winds of change” and “The gathering storm”. As the storm draws nearer “The crises of our time, it becomes increasingly clear, are the necessary impetus for the revolution now under way. And once we understand nature’s transformative powers, we see that it is our powerful ally, not a force to feared our subdued.” Thomas Kuhn

Photo Attribution: Reflections by Greensuitecase

As I gaze into my economic crystal ball the fog is starting to clear on the Ottawa outlook for the next two years as both the Federal and Provincial (Ontario) budgets draw near.

The most immediate impact on Ottawa it is becoming increasingly clear is the federal level job cuts are coming. The budget announcement has been pushed out until April … IMHO to prepare the necessary paperwork and options for workforce adjustment that will happen. The level of cuts will vary by department; however, the reduction in force will vary from 10% to 25% in the federal civil service. There is a report from the left leaning Centre for Policy Alternatives “The cuts behind the curtain” that delves into various scenarios regarding the details of how the cuts will be made.

Federal civil service cuts will affect Ottawa on a number of fronts. First and foremost will be the impact on the people displaced by the downsizing. The vast majority of these people will be knowledge workers with significant skills and talent. The challenge for Ottawa will be to retain these skilled people. Alberta beckons with high salaries a hunger for educated people and a great quality of life. Ottawa can easily match the quality of life aspects, however, where in the 1993 federal government cuts by Paul Martin Ottawa had a technology sector with a voracious appetite to absorb talent … that does not exist in 2012. Ottawa’s tech sector while rebounding does not have anywhere near the capacity to absorb the number of people being displaced. A key challenge for Ottawa in the short term will be to retain these workers.

Also on the near term horizon is the looming prospect of an even more significant cut to the provincial budget … rumours of up to 30%. The Drummond Report outlines 362 recommendations that if implemented will enable Ontario to meet its deficit reduction targets without a tax increase. The reality is not all of the 362 recommendations will be implemented and therefore there will be new taxes put in place.

IMHO there are some positive aspects to all of this in that the government is diligently looking for opportunities to save money without impacting service. There is talk of eliminating $345M in subsidies to horse track racing in Ontario … the more of these subsidy boondoggles they can find the better in my opinion.

Chapter 11 of the Drummond Report is dedicated to Business Support … my key take away from reading this section is that the Innovation Ecosystem in Ontario will be shifting from job creation to productivity. This is a significant paradigm shift and I am somewhat unclear on what “job creation to productivity” means but it sounds like far less direct support for business. The concern would be adding more business taxes on an already sputtering economy will limit or even reverse any economic growth. The second aspect of this I find somewhat concerning was talk of removing a $15M subsidy to buy Senators hockey tickets. Which on the surface sounds good but, if you consider the value of the Senators to the Ottawa community the loss of the organization could take much more than the $15M out of the local economy. We live in interesting times.

Short term outlook:
2012 will be a challenging year for Ottawa on the human capital front

Mid-term outlook:
- 2013 will be more challenging for Ottawa than 2012
o Transfers from the province will be significantly reduced
o The City of Ottawa will need to implement an austerity budget

Long term prognosis
- Depends most on how the city deals with the short term

“once we understand nature’s transformative powers, we see that it is our powerful ally, not a force to feared our subdued.” Thomas Kuhn

Next Post – Surfing in a Tsunami or more importantly finding the opportunities … If life gives you lemons make lemonade.

Ian Graham

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How does one decide to leap and become and entrepreneur?

Well … I’d say there are a few ways to decide;
- you decide right after graduation to jump right in, (these are natural entrepreneurs)
- Sometimes you gradually migrate that way, (these are people with entrepreneurial tendencies)
- Other times maybe life decides for you and you suddenly find yourself an entrepreneur. (Accidental entrepreneurs)

Whatever path you take the destination is roughly the same and you are on your own. This post series will focus more on the latter group of entrepreneurs … those where entrepreneurship found them. The challenges with the employee to entrepreneur paradigm shift are significant and not to be under estimated.

The next three posts in this series will deal with the mental change of employee to entrepreneur. IMHO most of the paradigm shift can be grouped under one of these blog topics;
- “All in” this is the only way to approach starting a business.
- “You’re the boss” The double edged sword, yes it cuts both ways.
- “Not 9 to 5” Freedom has its price.

Next post will be “All in”.

Ian Graham

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I’ll be speaking toward the end of February on transitioning to entrepreneurship and what to expect. The presentation will be turned into an ~15 part blog post series that I’ll start writing today.

So … where to begin … well at the beginning of course. I like to use mind maps and find for a visual learner like myself mind maps are a great way to remember a presentation. This post will give a bit of an overview of the mind map. Basically the presentation flows clockwise around the mind map; A bit about me (in green), THE Leap (in red), Being an Entrepreneur (in yellow) and Entrepreneur test (in grey).

What qualifies me to speak on the topic? Well to start with I have personally made the transition and have many lessons learned for others thinking about taking the leap. I have worked for a variety of technology companies, large ones then going to progressively smaller companies until venturing fourth on my own. I kind of migrated toward entrepreneurship and then decided to jump right in. More on this in a future post.
The first part (in red) of the mind map highlites the leap to entrepreneurship and the associated mental challenges … this is perhaps the biggest adjustment for most people moving from employee to entrepreneur.

Transitioning from being an employee to an entrepreneur is a huge leap and a significant challenge for someone that has spent their career in a large enterprise or government. As an employee (the larger the company the more appropriate) your domain knowledge is a thin deep vertical slice … as an entrepreneur you need a very broad horizontal base of knowledge with domain spikes. This is a huge paradigm shift. Perhaps the most significant challenge is the mental change associated with this vertical to horizontal knowledge transition where you are your own boss and free from the 9 to 5 routine. On the surface being your own boss and freedom sounds great but, there are challenges too.

The second part of the presentation (in yellow) deals with what it is like to be an entrepreneur, how to prepare, planning and then execution. Then of course there is what to expect as you are going through the process of starting your business. Ian draws much of his insights from the experience in starting up TheCodeFactory and the many bumps in the road along the way and of course the many small victories too.

Finally, (in grey) How do you know if you have the entrepreneurial right stuff. Ian has a very simple 3 step process to see if you might be suited to the entrepreneurial life.

Next post a bit more on my experience transitioning from employee to entrepreneur.

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