Chapter 1
A lesson about school

Ready or not … Go.

We are in the midst of a technological revolution. There is no doubt that our world is changing at a pace never before witnessed in human history. This is no longer controversial, or even debatable; it's a mere fact. We've seen it in our own lives. Innovations that would have seemed unimaginable even 10 years ago are now widely available, affordable and so much a part of our daily life that we imagine we couldn't live without them. But it's still early days. We're only 20 years into this, and let's not forget that the automobile didn't arrive until 150 years after the start of the industrial revolution.

This technological shift is impacting us all at a societal and economic level, changing the very nature of the lives we live, including of course how we earn a living. No one is immune. Incredible changes are being introduced in every industry, every business model, every job. This is because everyone is sharing the same core digital technologies.

This revolution is open to everyone who chooses to participate. But we need to reboot the entrepreneurial spirit every one of us was born with, because school, with all its good intentions, has not prepared us for this.

STEM is not enough

As the birth child of the industrial revolution, school taught us survival skills for a bygone era. Educators and governments have deftly moved to ensure the graduates of tomorrow arrive prepared for the technological era by focusing on what they call STEM subjects — Science, Technology, Engineering and Maths. The problem is that STEM is not enough. In fact, this re-emphasis, on its own, really won't help much at all, because it is just more of what we've been taught historically, with a different angle of approach. What we need to do is add the two missing E's of Economics and Entrepreneurship, so STEM becomes ESTEEM.

By adding the missing E's, we have a chance to build people's esteem. We give people an opportunity to become more human and to live an adventure as modern-day economic explorers carving out a new path for themselves. When we share the lost arts of entrepreneurship and self-reliance, a spark we all had as kids is reignited so brightly that it becomes a beacon to guide others.

ESTEEM recognises that we need each other, that some non-technical skills, as you'll see, create value that makes previously invisible STEM visible. They create more value than is offered by anything else we attempt, because without the spirit of exploration, even in an economic sense, we'd all still be living in caves. Building an economy around the idea of ESTEEM means appreciating the wide variety of viewpoints and natural faculties we have to offer. Tech Hackers, Design Hipsters and Sales Hustlers meet in the middle and make something great together. When we add the missing E's we give everyone who believes they have a chance a tilt at an independent future. If we want future-proof kids, and grown-ups, we all need ESTEEM.

For too long science and maths have been largely ignored in wider society. We glorify celebrity and sporting achievement, but technologists are rarely recognised. I've lost count of how many sports people have been named Australian of the Year; it really is ‘fall of Rome' stuff. But it does feel like the tide is turning. As end users of technology, society is starting to value science on a personal level, and it's about time. More and more kids are learning to code, to hack, to experiment with robotics — it feels like an exciting shift. But if we reconfigure their minds only to science, without addressing economics and entrepreneurship, we are still just teaching them to participate in someone else's game, and we all deserve more than that.

We need to be able to take what we know and convert it into income, to participate in the market not only to get a good job but also to create jobs for ourselves and others. Even better, we can look towards inventing new industries that don't even exist yet, and all the technology in the world can't do that, because technology without practical application, in the form of customers and a market, is just a discovery. The people developing the wizardry of tomorrow deserve to be the beneficiaries of what they create. In fact, anyone doing anything deserves the dignity of knowing how to manage their own future, and this is what The Lessons School Forgot is all about.

Time to unlearn

For the sake of collective progress, let's assume we're all late to the party. We probably should have started a little earlier on all this. Yes, there's always someone who knows more and started before us — so what? Let's agree that the second best time to start is now. And the first thing we have to do before anything else is unlearn the way we think. In order to reinvent ourselves, we need to wipe our human hard drive clean of all the useless files we've been carrying around since school. Some of them are heavy and slowing us down. We need to remember that our training to follow a linear path is obsolete. With some simple knowledge hacks, we can reframe what looks risky and pursue a new path.

Today's playbook can be learned relatively quickly, once we free our mind from what we have been told. It's low cost and has a high return on time invested. The least anyone willing to have a crack at reinventing themselves can expect is that they'll get a very nice ROH (return on humanity). Sometimes the having is in the doing, and by doing more than you've done in the past, you'll become more than you were and will feel pride at having had the guts to try. And some strange things happen when we invest in ourselves. We gain a great deal of self-esteem, and our own economics improves because we know, and others sense, we are the kind of person to make an effort. It's the same feeling you get when you've prepared well for anything: suddenly the outcome doesn't seem as important, although we are often happy with it.

You've already got the skills you need. If you can read, you can do it. I really mean that. This revolution is one that connects skills and people, and we all need each other. But if you can dig up some deeply buried desire for risk, some courage and a bit of the creative spirit you had as a five-year-old, then I know you'll seize the opportunity that being connected to everyone in the world can bring. It's an opportunity no generation before ours ever had.

The history of the present

Before we can unlearn anything, we need to know why we sometimes think the way we do. We need to be able to see through the system that shaped us. School is a good place to start.

The first thing you need to know about school is this:

SCHOOL WAS NOT DESIGNED WITH YOU IN MIND.

They designed it for them. You might be wondering who ‘they' actually are. Well, ‘they', in the developed world at least, are the governments and the industrialists and business leaders who own and control the factors of production. School as we know it was designed to create competent, compliant workers who could fit into the rapidly industrialising world.

Before the industrial revolution there was a very high probability that people would simply do what their parents did, especially if it involved agriculture or a craft. They would follow family tradition, the required skills usually handed down from parents or close relatives. Or they'd work in the family business, most often eking out a living with the primary focus of providing for the food, clothing and lodging to sustain their family. There wasn't much excess for the working classes, but there was a fair amount of freedom.

Why change hurts

If you're wondering why change is so hard for us to cope with, it's because we've been programmed for stability, indoctrinated from the age of innocence to believe in a system that is now obsolete. From the moment we are capable of comprehension, we are shaped into little industrialised robots awaiting instructions from the corporate or governmental algorithm. It's not our fault that change is so uncomfortable. The 200 years of the industrial era, despite its world wars and depressions, led to a long period of systemic stability and unsurpassed material prosperity. For many generations we have had the formula for living an increasingly prosperous life, and the industrial revolution delivered against this promise big time.

As I wrote in my first book, The Great Fragmentation, we now live better than royalty did before this revolution, and anything that threatens to upend that comfort is fearsome. We fret at the possibility of change not only because we've never had it so good, but because we've been told all our lives to leave the big important stuff to the people in charge of the systems in which we obediently participate. Economically we have been coddled, so much so that we have come to believe our system was designed to serve us in perpetuity. It's now clear that is not going to be the case. The system is changing dramatically, and we need to change our personal business models to recognise this. We have a choice:

1. We can wait for the system to get better.
2. Or we can reinvent ourselves, redesigning our lives and in the process helping reshape the system (which I go into in detail in Part III, ‘Reinvention').

We've been treated like economic outpatients waiting for the government and our once reliable institutions to provide for us, believing they will provide us with the opportunities we need, and all our social and economic needs, so long as we work hard. It's not surprising we think like this — they trained us to think they would continue to provide jobs and security. Well, they're not going to. The incentive structure of management tells the simple tale of why it can't and won't happen.

Incentives shape behaviour

Nothing indicates what people will do more clearly than their incentives. These days our economic lives, which can be loosely equated to ‘the market', are an aggregation of short-term interests. Government and corporate leaders simply aren't around long enough to care about the impact of the major decisions they make. In Australia, where I live, the federal government has three short years in which to allocate the resources at their disposal to improve the country for their constituents; in the USA it is four years, ending with a full year of campaigning. The average reign of a Fortune 500 CEO is 4.9 years¹, yet the average annual pay for the said CEO is now US$13.8 million, which is 204 times the median wage of the workers they lead.²

Leaders are incentivised to make decisions that maintain their position. Even if they have shares in the company, which is meant to align their interests, invariably they'll focus on making the balance sheet sing while they're in charge. So they'll avoid long-term, financially painful shifts in favour of short-term maintenance. If it makes it worse for the company later on, they won't care, because they'll be sitting under a palm tree somewhere with their multimillion-dollar severance ‘go away' money. Wouldn't that be nice! Some other overpaid CEO will happily have a crack at cleaning up the mess.

And, you guessed it, the average politician makes the same play. They throw good money after bad in declining industries to keep people in jobs and their approval ratings high. In Australia we've experienced the same industrial upheavals most developed nations have gone through as low-cost foreign labour markets have improved their penetration of the manufacturing sector. This year (2017) the auto industry as we know it finally shuts down completely. It was of course inevitable. Australia, with its high wages, relatively small population and geographical remoteness from its main trading partners, could not continue to compete in a rapidly globalising market where trade barriers and tariffs are being reduced. But here's what our local government did: they subsidised the industry. When the gig was clearly up, they paid wealthy global corporations to keep the pretence of manufacturing in Australia.

Up until 2013 the auto industry in Australia received an annual $550 million in subsidies.³ Car maker Holden, a wholly owned subsidiary of General Motors, has a market capitalisation of $50.5 billion, but received from our government an equivalent of $50 000 per employee per year in subsidies.⁴ In the long run, the money invested on behalf of taxpayers becomes a sunk cost that could have gone into retraining and facilitating the development of future-proof industries more suited to the Australian (insert your country here) economic setting.

Hack the system!

I believe our education system won't and actually can't change fast enough. Given this, and the fact that probably everyone reading this has already completed their formal schooling, I wanted to write a book that brings together a way to hack the system. Something that pulls together some of the important lessons we have to teach ourselves, lessons that may have more social and economic value than our formal education gave us. This is not a book about what modern education could or should look like; it is about how to get what you want in life despite the system's failings. It gives you a bunch of tools to take your future into your own hands, things that blew my mind when I discovered them and wondered why they had never appeared on the blackboard. I want to start you on a process of re-education so you can grasp the fundamentals of life, the economic system and how to manage them to shape your life in whatever way you choose. By the end of the book you should be able to better understand the system you live inside, the way this system has shaped you and how to unlearn its bad bits. You'll understand some fundamentals about money, and how to future-proof yourself and any company in which you have an influence. Embrace what this book has to offer and you'll put yourself in a great position to leverage the technological era we are entering.

The little history lessons in this chapter are important because they help us understand why so many questions about economic and life issues go unanswered when we venture out into the world. Grasping the basic design principles of the school, it becomes clear why there are so many lessons that school seems to have forgotten — lessons that are vital to a happy life, lessons we have to teach ourselves and those we care about most. I want to provide short cuts and offer a template with which we can teach ourselves and, importantly, to suggest a survival philosophy.

When we discover the methods that once led to success have become obsolete, it's time to question everything we know in life about economics and technological reality. So strap yourself in for the ride. The industrial age is over; it's time we reinvented our future in a way that suits us, not them. We sure as hell can't rely on ‘them', those who got us into this mess in the first place, yet they did pass on some pretty radical tools for those of us with a positive mindset. And the good news is we can choose to change our minds on what is possible for us.