Stephen Poloz, author, economist and former Governor of the Bank of Canada, joins me on this very special episode for an exclusive interview to discuss the launch of his new book, "The Next Age of Uncertainty: How the World Can Adapt to a Riskier Future."
Welcome to the The Voice of Retail , I’m your host Michael LeBlanc, and this podcast is brought to you in conjunction with Retail Council of Canada.
Stephen Poloz, author, economist and former Governor of the Bank of Canada, joins me on this very special episode for an exclusive interview to discuss the launch of his new book, "The Next Age of Uncertainty: How the World Can Adapt to a Riskier Future."
Together Stephen and I talk about the major tectonic forces that are shaping a chaotic world. Among these forces are an aging workforce, mounting debt, and rising income inequality. Technological advances are quickening the pace of change, but Poloz argues the core fundamentals have always been there.
Stay tuned for the former Governor's perspective on the economic prospects for retailers in 2022, and find out why Captain Jean Luc Pickard makes a cameo appearance in the book.
Thanks for tuning into this special episode of The Voice of Retail. If you haven’t already, be sure and click subscribe on your favourite podcast platform so new episodes will land automatically twice a week, and check out my other retail industry media properties; the Remarkable Retail podcast, the Conversations with CommerceNext podcast, and the Food Professor podcast. Last but not least, if you are into BBQ, check out my all new YouTube barbecue show, Last Request Barbeque, with new episodes each and every week!
I’m your host Michael LeBlanc, President of M.E. LeBlanc & Company & Maven Media, and if you’re looking for more content, or want to chat follow me on LinkedIn, or visit my website meleblanc.co! Have a safe week everyone!
About Stephen
Stephen is a widely recognized economist with nearly 40 years of experience in financial markets, forecasting, and economic policy, including 35 years in the public sector.
Prior to joining Osler, Stephen was the 9th Governor of the Bank of Canada, Canada’s central bank. Stephen was Governor of the Bank for seven years after having previously spent 14 years there during 1981-95 occupying a range of increasingly senior positions.
Prior to joining the Bank of Canada, Stephen spent 14 years at Export Development Canada, as Chief Economist (1999-2008), Head of Lending (2008-2011) and finally as President and CEO (2011-2013). He also spent four years at BCA Research, where he was Managing Editor of the International Bank Credit Analyst, one of their flagship publications.
Stephen is a Certified International Trade Professional and a graduate of Columbia University’s Senior Executive Program. He has been a visiting scholar at the International Monetary Fund in Washington, D.C., and at the Economic Planning Agency in Tokyo, Japan. He is a frequent speaker and writer and has taught economics at the University of Western Ontario, Concordia University and Queen’s School of Business.
At Osler, Stephen provides clients with his significant expertise and strategic guidance regarding the financial system, trade, and economic policy both domestically and on a global scale.
About Michael
Michael is the Founder & President of M.E. LeBlanc & Company Inc and a Senior Advisor to Retail Council of Canada as part of his advisory and consulting practice. He brings 25+ years of brand/retail/marketing & eCommerce leadership experience and has been on the front lines of retail industry change for his entire career. He has delivered keynotes, hosted fire-side discussions with C-level executives and participated on thought leadership panels worldwide. Michael was recently added to ReThink Retail’s prestigious Top 100 Global Retail Influencers for a second year in 2022.
Michael is also the producer and host of a network of leading podcasts, including Canada’s top retail industry podcast, The Voice of Retail, plus the Remarkable Retail with author Steve Dennis, Global E-Commerce Tech Talks and The Food Professor with Dr. Sylvain Charlebois. Most recently, Michael launched Conversations with CommerceNext, a podcast focussed on retail eCommerce, digital marketing and retail careers - all available on Apple, Spotify, Amazon Music and all major podcast platforms. Michael is also the producer and host of the “Last Request Barbeque” channel on YouTube where he cooks meals to die for and influencer riches.
Michael LeBlanc 00:04
Welcome to The Voice of Retail. I'm your host Michael Leblanc and this podcast is brought to you in conjunction with Retail Council of Canada.
Michael LeBlanc 00:10
Stephen Poloz, author, economist and former Governor of the Bank of Canada, joins me on this very special episode for an exclusive interview to discuss the launch of his new book, "The Next Age of Uncertainty: How the World Can Adapt to a Riskier Future."
Michael LeBlanc 00:24
Together, Stephen and I talk about the major tectonic forces that are shaping a chaotic world. Among these forces are an aging workforce, mounting debt, and rising income inequality. Technological advances are quickening the pace of change, but Poloz argues the core fundamentals have always been there.
Michael LeBlanc 00:40
Stay tuned for the former Governor's perspective on the economic prospects for retailers in 2022 and find out why Captain Jean Luc Pickard makes a cameo appearance in the book.
Stephen Poloz 00:49
The past 50 years will turn out to be the abnormal years. So, this is a return to a more long term normal. So, that's an important insight. The thing and other, other these things technology, they're always there, but they go in big waves. So, the first industrial revolution in the 1800s, the second one was in the early 1900s. The third one was more The Computer Chip.
Michael LeBlanc 01:15
Steven, welcome to The Voice of Retail podcast. How are you doing this morning?
Stephen Poloz 01:18
Well, thanks. It's good to be here. It's nice to be in Toronto. I'm doing fine. Thank you.
Michael LeBlanc 01:24
Fantastic. Fantastic. I was gonna ask where I'm finding it today, but today, we're recording this on Tuesday. I think today's the launch of your book, right? Today is the day, right?
Stephen Poloz 01:32
Yes, it is today's the day, so, a number of events today and I'm trying to do it from Toronto instead of from my home office in Ottawa.
Michael LeBlanc 01:41
Oh, very good. Well, I'm an Ottawa native, so say hi to Ottawa. For me, it's been a bit of an interesting time to say the least, in our hometown.
Stephen Poloz 01:48
Sure is.
Michael LeBlanc 01:48
So, we'll, we'll, maybe we'll talk about that in the world of uncertainty and turmoil later. And look, I'm really interested, really keen to get into the book, the next age of uncertainty just out just out this week, but let's start the beginning. You're certainly a familiar name to most if not all Canadians, and certainly my listeners, but for the sake of those who may not know you enough, or not know you at all my international listeners. Tell us about yourself and your personal professional journey.
Stephen Poloz 02:17
Yeah, well, in brief anyway, I mean, I grew up in Oshawa, close to Toronto, of course and when I became of age, I went to Queen's University and, and from there to Western to do my graduate work. I discovered economics when I was at Queens and fell in love with it and much to the chagrin of my parents who wanted me to become a doctor and so became an economist, it was in 1974. That's a long time ago, when I decided on the Bank of Canada as where I wanted to work and do monetary policy. So I was lucky to land a job there. I worked there for 15 years in the 80s and early 90s and I left to do a few other things, including working at Export Development, Canada, which is very exciting and then, in 2013, they talked me into becoming Governor of the Bank of Canada, which, of course, was my dream job from 40 years previous. So, that's my short trip for, for me. It's been a great ride. I can tell you that.
Michael LeBlanc 03:21
And today, I was reading your I think you're an advisor with Osler. And of course, you're now an author, is that, catch us up to date with what you're doing these days?
Stephen Poloz 03:29
Yeah, so I retired as Governor in, in June of 2020. And since then, I've been writing a book which, as you say, it's just, just been published this week and also joined Osler Hoskin Harcourt as a Special Advisor, which is really interesting, visiting clients and talking to them about their, their big strategic issues and also a corporate director for a couple of boards and doing some things at Western, my alma mater for, for the Lawrence National Center. So, a full plate but supposedly only half my time, but, but I can tell you, when you write a book, more than half your time gets filled up with just that and so I'm looking forward to as the COVID situation eases back that we'll get a chance to actually do some traveling, which we haven't done since, since I retired. Yeah.
Michael LeBlanc 04:24
Now reading through background pundits of what they had to say with your tenure as Governor, the common sentiments seem to be decisiveness. Would you be happy with that short version assessment?
Stephen Poloz 04:37
Well, there's lots of words I could pick but, but that's a pretty good one, I'd say decisiveness and, and certainly, I would say the situations that we found ourselves in were ones where in decisiveness would not have happened.
Michael LeBlanc 04:50
Now your master's and PhD are from Western,I am a Rotman MBA grad, did you wince a little bit when it was announced a Rotman Business School dean was taking over from-, as governor?
Stephen Poloz 05:02
Well, no, no, actually, because actually, Governor Maclin was, was a longtime colleague of mine. In fact, I hired him to his first job at the Bank of Canada. So, we worked together for many years, and he's a graduate of Western just desire. Where he happened to be working in the last few years is not, it's a nice place anyway, so I don't wince
Michael LeBlanc 05:28
Well, you know, I just thought, I'd thought I’d have some fun with that. All right, well, I can't have you on the mic without having you spend a bit of time for listeners to understand the role of the Bank of Canada, they'd be familiar with it, certainly at a high-level setting interest rate, that's what you would be and the organization would be best known, but what is it that, what else should we know? What else should we know fundamentally about the Bank of Canada to understand its role in, in the economy and policy and, and even in the political process that governs our economy?
Stephen Poloz 05:56
Well, sure, you're right, the centerpiece is, is setting interest rates, and not just setting them, but doing that in a way that we hope smooths out fluctuations in the economy, you know, if unemployment is rising, while interest rates will fall, and therefore the unemployment rate will rise as much, and it will return back to what it was. So, that protects people. So, that's the power of monetary policy is what got me interested in it way back in 1974. So, all that but these days it's, it's around controlling inflation as the sort of the light house or the beacon, what we do, but smoothing out fluctuations in the economy is really what is going on.
Stephen Poloz 06:37
But we also make sure that you have a fresh supply of safe banknotes in your pocket. dollar bills, you know, by the way, some of them have my signature on which is, which is really neat, and the we're else the Bank of Canada is also the gov-, the banker for the government. So, all the government's transactions flow through that, including its debt program. So that is also managed by the Bank of Canada and overall, the bank also takes a very strong interest, even though it doesn't control the financial system, it studies and is responsible for maintaining a stable financial system, working with other, with other authorities. So, that's a multiplicity of roles, but you're right, the main thing that people know about is the interest rates pretty much everybody's got some, some money in their pocket, that's an important role.
Michael LeBlanc 07:28
Well, I love that point because you know, the currency is becoming a bit of a fungible definition. We have cryptocurrency now and cryptocurrencies, kind of in the spotlight these days with, yeah, you know, sometimes it's the currency for crime, sometimes people are all watching and sometimes it seems to flow around, what do we call feudal currencies or fetal currencies, I suppose the bank account must be looking at that very carefully and expanded, what is an expanded definition of currency mean, in the long, short and long run, yeah?
Stephen Poloz 07:57
Yeah. There's no question about that, in the Bank of Canada Act, currency is actually given the name banknotes and so it's even more specific and so this new world where, where that is dawning with, with various forms of, let's call it electronic money, if you prefer, or, anyway, crypto is a very specific class, but that, that digital money is definitely coming. What form it actually takes is a little unclear, the central banks are all very busy and collaborating and in designing what, what central bank digital currencies might look like, how they would be managed, and the idea is to be completely ready for the day when people really want one.
Stephen Poloz 08:50
You know, right now, central banks provide the money, the cash that's in your pocket, because people want cash in their pocket, whatever form of money they want, the central bank's job will be to provide it and I think digital money is going to have its day, it may not be a crypto currency, that's very volatile kind of thing. And I think it depends on what things come onto the market, those things, of course, will be regulated in one way or another and the central banks then will offer up their versions just like today, you know, there, your banknotes, you know, compete with other things, and you use you can still use banknotes and so I think in the end, the, the most reliable form of digital money will come from central banks and so that'll be the one that kind of is center of things, but there will also be these other payments mechanisms that will be in the marketplace. I think that innovation is terrific. It's great to see.
Michael LeBlanc 09:48
Well, it's a nice segue to, let's talk about your new book, The Next Age of Uncertainty: How the World Can Adapt to a Riskier Future. It's available now just released, where all books are sold, first of all, and you mentioned it earlier on in the conversation, let's talk about the tradecraft of writing the book, I talked to a lot of authors who say, you know, they locked themselves in a room or some authors kind of say I write the priestess first, some say I gotta hit a word count per day mean you writing for you would be kind of a natural state, but talk about the tradecraft of writing the book and why you thought there would be room on the shelf for another book about the state of the future of the economic world.
Stephen Poloz 10:25
Trade craft is an interesting term. I mean, I suppose that something that writers who are professional writers fall into a certain habits like, I know, I know, I know, of Bette McLaughlin for instance, told me how she wrote her, her books and in my case, I just wrote whenever I had time and for me, I had lots of time, because I retired in June of 2020 and in the right in the middle of the worst part of the pandemic, couldn't go anywhere, anything, right.
Stephen Poloz 10:57
And so, what I found was, if I was, especially if I was at the cottage, I could sort of sit down there at around nine in the morning, and with my laptop on literally on my lap with the view of the lake and next thing I know, it was dark out. It would be amazing, I could just sort of fall into a zone and a stream of consciousness would go in and I think to myself, well, I'll clean that all up later. Right, you know, and so, you know, a few days later, I go back and read those that's 6, 7, 8 hours of, of output and I think, yeah, this is all right, oh I need to tweak this or move this here and add another idea in there.
Stephen Poloz 11:37
So, I think my book is written in a, as a conversation almost. So, it's, it. I don't know, if you, you found that but what I find it, to me, it reads is if I'm speaking to you, and that, that just means it is a stream of consciousness, really, it's organized, but it's but it is that in terms of why, why I thought there was room for it on the shelf. I mean, I began by thinking about, while observing the companies were highly preoccupied with very short term things, you know, short termism is a thing and what could I do to add to that kind of conversation and help them think longer term, what things should they be thinking about when you say to a company think longer term, well, what are they supposed to consider and so I began to lay out the broad strokes of what would be the ingredients.
Stephen Poloz 12:26
And I realized that many of the things that I thought of as economists as basically constants, were not things like technology, we know intuitively it’s not constant, but I mean, it's slow enough moving, we can think of it as a constant when we're forecasting next year and same thing with things like aging population, those things. So, so once I got started, then I realized that the forces that are moving those things around in the economy, have been active literally forever and then you could examine historical episodes to help you get lessons for what the future might bring and some of these forces are really coming to a head and in the next few years, and so they realized that they could interact and cause extreme uncertainty, because in the past they have. And so that's where I got to, and now I'm hoping that the book is written in such a way that it can help people in conversations around the boardroom table, but also around the kitchen table.
Michael LeBlanc 13:32
Well, you talk about, you talk about these tectonic interacting forces and talking about taking the fork in the road to remind me of that Yogi Berra quote, ‘When you see a fork in the road, take it’. My perception is, and I've, you know, by the way, that it's a really well written book, as if your objective was to have a conversation with the reader, you nailed that objective, because I think it's a great book to read and it is nice, it's well structured.
Michael LeBlanc 13:56
Now, again, back to the, what I was going to ask you, that my perception is that you talk about, these forces have been around a long time, but my perception is that the forces move faster, the implications are broader, the pace of change is more relentless, and the forces are more powerful. Is that the case or is it just it seems that way because we're, we're awash in platforms, Facebook, Google, and all these platforms that just pushed for good or ill, a daily tsunami of information to us is, you know, can you parse out for us? Is it, is it truly moving faster than ever before, or does it just seem that way?
Stephen Poloz 14:30
Well, the, the short answer to that question would just be yes because you've got, you've got all the, all the ingredients, which I think matter. I do think that some things are moving faster. To illustrate, for example, population aging. Population aging is moving fast right now precisely because it moved fast 50 years ago. So, it moved fast, and you know, in the aftermath of the Second World War, the workforce started to explode higher, you know, about 15 to 20 years after World War II. And now those same people are rapidly exiting the workforce. So, working, global workforce growth is slowing dramatically.
Stephen Poloz 15:19
So quite a sudden change, the 50 years that we've lived through, though the past 50 years will turn out to be the abnormal years. So, this is a return to a more long term normal. So, that's an important insight. The thing and other, other these things technology, they're always there, but they go in big waves. So, the first industrial revolution in the 1800s, the second one was in the early 1900s. The third one was more The Computer Chip. So, it was more like around 1980 to '95, up to 2000. The fourth industrial revolution was just getting started.
Stephen Poloz 15:55
So, these big ways have had big impacts on economies on people. They've caused depressions in the past or all kinds of major, major outcomes and so that's to say, you're right, that, it's, there's a sense in which technology or let's say what you say, platforms, social media seems to amplify everything now. So everything seems to be faster and bigger, perhaps because of our awareness, but actually, in fact, these forces are actually getting bigger and so and what I've talked about in my book is not just the forces, because some of these are very well understood, at least in as a slow moving thing, but like earthquakes, we all understand, you know, that the tectonic plates and the earth grass, they're moving. We all understand that. But you know, you don't, that doesn't allow you to predict that tomorrow, that's when we'll have that big earthquake.
Michael LeBlanc 15:55
It's really the complex intersection of all these things, which is really what jumps out, your point that jumps out, jumps out at me in the book and you know, I wanted to comment on this, the fourth industrial revolution versus the third, I was reading this great book, I can't remember the author right now, it talked about how electricity when it was invented, took 50 years to actually become part and actually move forward the economy. You know, nobody knew how to build a factory with electricity. At the end of the last industrial year, I think about that, with computers and technology. Is it the, is it the fourth industrial revolution or is it the third computers that are actually coming online and doing what they long promised, which was productivity because of the first 20 years you using a computer, as you would know, was not productive because it was just hard to figure out, they crashed all the time. They were, they were, they were terrible. That's not so much the case these days. So, is it a fourth revolution or is it, is it the blooming of the third and how do you think about that?
Stephen Poloz 17:44
Well, no, I think it is, it is the fourth and a why. So, what you're describing, you know, the steam engine, electrification, computer chip. These are what we call general purpose technologies. So, they're not like you invent something, and then everybody buys one, what they are, technologies that apply to all aspects of the economy takes time for it to spread and for you to realize all those benefits.
Michael LeBlanc 18:10
Right, right
Stephen Poloz 18:11
And so that's exactly right. And so, electricity was relatively slow, you can watch the, you can watch the progress on if you watch Downton Abbey on television, right? You get the sense oh they got the icebox and then we got this electric thing and electric lights and so on and the debates in the kitchen about whether it's better or not. It's really quite funny but, but the computer chip really was a late 70s phenomenon. You're right, the early 80s, not much happening and you remember economists during the 80s, were looking for the productivity.
Michael LeBlanc 18:43
Right.
Stephen Poloz 18:43
Where is it, you know, and when and when we found it,
Michael LeBlanc 18:46
Yeah,
Stephen Poloz 18:46
It was, if you remember, when Greenspan in the second half of Greenspan's time at the Fed, we had this long period from basically '95 to 2005. When inflation wouldn't go up, inflation kept going, actually going lower and interest rates stayed low for longer than anybody expected that, that was possible and the reason was, because that's when the benefits from the computer chip were being realized and that boosted total income in the United States, for example, by full 10 percentage points, over 10 years. That's a lot that's adding one percentage point to growth every single year for that period.
Stephen Poloz 19:28
And economists didn't predict it, they were looking for it, but of course, they wouldn't put a number beside it until it actually happened and so this was, this was kind of a mystery at the time and that's why industrial revolution, usually how it manifests itself is in lower prices, people getting displaced. Remember, we had jobless recoveries, and 90s in 2000. Well, that was people being displaced, but they're able to get jobs faster than they did in past industrial revolutions because we had a more astute monetary policy. We kept going interest rates low longer, and that allowed the economy to grow into that, that increase in capacity and create all the spin-off jobs and so that's what would happen in the fourth industrial revolution over the next, I would say, five to 10 years.
Stephen Poloz 20:16
That's my guess, of the timeframe, a repeat of what we saw during that time. And that includes a World Economic Forum suggests that around 15% of global workers will be disrupted by the fourth industrial revolution and so, you know, we talked about the K shaped economy, those folks ended up in the bottom part of the K and the top part of the K grows fast. And what we want is to help people find their way from the bottom part of the K into the top part of the K,
Michael LeBlanc 20:47
Or at least into at least into the middle, right, I mean, I've read some economists talk about the, the death of the middle class, which is really troubling to retailers, right because very, very rich people don't buy a commensurate amount of jeans like they don't buy 1000 pair of jeans, because they're a billionaire, they buy three, and this does feel some days like this hollowing, you know, it's a bifurcation, right, you've got a very, very, you know, as you said, you particularly accent accelerated, perhaps are highlighted by the COVID era, this K recovery, do you, is capitalism broke, can this be recovered and how do you, how do you put that together?
Stephen Poloz 21:27
Well, what you put your finger on is, of course, one of the one of the five forces, which is rising income, and wealth inequality around the world, more than 70% of global citizens have seen income inequality rise during their, during the last 10 years, the biggest moves have been in places like the United States or the United Kingdom, Canada has actually had a decline in income inequality over the last 5, 6, 7 years because of changes to the tax system. So, we're a little bit of a different, different case but generally speaking, that's going on.
Stephen Poloz 22:08
And the question is that you asked, is capitalism broken, well, no, this has happened before. We've had big cycles in the share of total income going to people as opposed to capitalists throughout history, that's what Piketty his book was about the book Capital. It was about that really long history and so we are now at a stage where the share of income going to workers is the lowest it's ever been and so that can lie behind some of the thing, the things you're mentioning, like I've been left out, or I've been left behind
Michael LeBlanc 22:43
Yeah, political instability. I mean, people, eventually people get very frustrated by this.
Stephen Poloz 22:48
Yeah, what matters to people matters to politicians, it becomes political, and it actually is producing I think, a degree of polarization of politics, because it's kind of a us and them kind of, kind of concept and then of course, it only takes an unknown catalyst to really get people worked up about it.
Michael LeBlanc 23:12
It also takes the what's called the rage algorithm from some of the platforms too
Stephen Poloz 23:16
Yeah, well that's, that's, exactly, magnified or amplified by, by these [inaudible]. So is it broken, well, no, I think it is evolving, as it has always evolved in the past. It is evolving now; capitalism will evolve further. I think that the ESG trend, which I've talked about in the book, has this substance behind it, which is that, you know, as we go through the next 10 years, companies are going to find that they're short of workers, okay, they're, they're going to be disrupting workers with new technology and not able to find the workers that they really want, because of the slowdown in the global workforce. So the power in the marketplace is going to shift from the employer to the employee, we may even see a resurgence of, of union, unionization and in this context.
Michael LeBlanc 24:09
You see that happening, that shift happening now, right,
Stephen Poloz 24:13
Yes, yes
Michael LeBlanc 24:13
because, you know, I want to, it's a nice segue into my next question, you know, we've gone through one of the almost three years of the COVID era and I wandered through the lens of your powerful forces, if you can parse for us how you think about accommodations and changes that were made during a very unusual period of time versus, you know, structural changes.
Michael LeBlanc 24:34
So, when I think of structural changes, I think of this work from home work anywhere movement, which feels to me a structural change, like something culturally is really changed in the workforce. Anything else like we couldn't have gone through three years of this or that something changing. How do you, how do you think of that?
Stephen Poloz 24:51
Well, you've put your finger on the one I think is the most important, which is the, the work arrangement, and also I was alluding to a moment ago, is that the power in that equation between employer and employee, the power is shifting towards the employee because there'll be in short supply they're, they're going to be, have to, have to be an adaptable workforce because of all the changes going on and I think that companies are going to embrace ESG even more the yes and ESG.
Stephen Poloz 25:21
Even more, which is too, if they say to their shareholders, I wish I could have maximized my profits this past quarter, but I couldn't find the right people or enough people. So, I didn't do a very good job. Well, that's not going to be very satisfactory to our, to your shareholders, shareholders will, we'll see that repeated performance like that, and we'll, we'll sell that stock and so a company that does a really good job on retaining the workers, helping workers move from the bottom part of the K to the top part of the cake, technologically speaking, and then being very conscious of the risks that they face focused on S will be the ones that keep the right workers and are able to perform for their shareholders and that's how there's no inconsistency between, you know, ESG, and the maximize of your profits, your financial performance. I think that's where we're going.
Stephen Poloz 26:14
And one of the things you mentioned is hybrid work. It's right there in front of us today. So, so some workers would love to work at home all day, all those workers want to work at the office all day and then and then what does the company want, it depends on the business and so they might, they may prefer the workers be at the office, but they know, well, it works out for them. So, it's more productive because they can juggle their lives better and so they have to find a new place.
Michael LeBlanc 26:37
And cost savings too, right, I mean, I talked to retailers all the time and A: I'm struck by the cultural change, like retailers who would never business leaders in this cross a sector who would never have you have hired a senior executive or a senior marketing person or analyst or IT person that wasn't showing up at their doorstep every day and then second, I think it started to dawn on them. If I don't need this much office space, isn't that good like, I think that they're receiving huge productivity gains. There's concerns about culture and adhesion to the, to the workplace but it feels like you've got huge productivity gains that aren't going to be clawed back, yeah.
Stephen Poloz 27:16
Well, that's what I think, too. I mean, anytime you take something on an economic arrangement, which is constrained in some way, and are in the old case, let's say by a standard five-day workweek, for example, and you unconstrained it, I think the result is more happiness and higher productivity, but it doesn't apply to every single firm. It depends on the operational demands, and so on.
Michael LeBlanc 27:41
Yeah.
Stephen Poloz 27:41
But technology is making that a blurred thing and making it much more possible. So, there's a lot of implications of that one. So, for instance, on any given day, perhaps there'll be half or two thirds the number of people commuting downtown in any given city on a given day. Say it's half for sake of argument that affects your decisions around infrastructure, roads, bridges, public transit, it affects the housing market, we've already seen that people are willing to move further away because they only have to commute once in a while and having more space of course and a different lifestyle and one of the consequences for commercial real estate downtown. My expectation is that we'll continue to see growth in demand because of population growth Canada has got ambitious immigration policy
Michael LeBlanc 28:30
Well and big, big cities, will and always will attract people, right, exciting big cities will all attract-, will always attract people for different reasons and they're attracted to the smaller towns like, like Oshawa or in our parts of the world, Niagara or wherever you want to live that's, that affords you all those kind of all those benefits within, within a bit of a reach of where you need to be. You, you know you end your advice or you’re in the book, with advice and prescripts the future. You find wisdom and leadership lessons in a big someone I follow extensively Jean-Luc Picard from Star Trek, lots of great lessons to be learned from Jean-Luc. Discuss that for a second. Why did you, are you a big Star Trek fan and did that, what struck you about his particular character's leadership style that jumped out at you to put it in the book?
Stephen Poloz 29:18
Well, I'm a big Star Trek fan since the very beginning and I bet you can't make that claim. So I mean, when appreciate-
Michael LeBlanc 29:24
Well, I can, I can actually
Stephen Poloz 29:26
Well, anyway, never mind, but anyway, there, there, there and also, Jed Bartlet, President Bartlett from the West Wing and those are my two favorites and when I, when I coach my leaders, I suggest they watch the first season of West Wing, and I suggest that they read the book Make It So which is a drawing of Jean Picard's leadership secrets.
Michael LeBlanc 29:54
Yeah.
Stephen Poloz 29:54
But I think the, to take them together, really what we're seeing are visible examples. What, what they call values-based leadership, it's leading with your values. This is what, what they teach you at Columbia University in their, in their leadership program.
Stephen Poloz 30:12
So, putting your values out in front of you like they do, they all, it's obvious that their people come first. You know, it's better those leaders are concerned about their people and in return, their people will lay down in front of a train for them if that's what they need, you know and so for me family first, you know, hard work, humility, and take the high road, I always say take the high road, because the view is always better from the high road. You know, if you just leave with some basic principles like that, what you find is the people, they, they agree with that and then they know, they can anticipate how as a leader, you will react, as you see on Star Trek, I mean, when, when the, the Enterprise or Blauer star is about to blow up and ruin everything.
Michael LeBlanc 31:00
As it is every second episode.
Stephen Poloz 31:01
That's right, you're going about 30 seconds left on the timer and they know Jordi is working away on something and the, the suggestions start flying around from the team, right?
Michael LeBlanc 31:12
Yeah.
Stephen Poloz 31:12
And Jean-Luc, is there calmly watching his team, you know, and he says, that sounds like an idea, make it so.
Michael LeBlanc 31:18
Yeah.
Stephen Poloz 31:19
And you know, I mean, that's not what a leader does is it, you know, you know, you see very different leadership styles.
Michael LeBlanc 31:26
Yeah.
Stephen Poloz 31:26
And I think this, this, this more volatile environment that we're heading for, will be one where people are going to be uncertain and afraid of that uncertainty and the employer is in a position to actually help calm that down and help mitigate some of those risks for them without a great deal of cost, and therefore encourage them to stay with the firm and be productive for a very long time. So, I think that that's the kind of leadership that fits the kind of world I'm describing in the book.
Michael LeBlanc 31:56
Last quick question for you, I want to bring it to current events, speaking with retailers, they look at two things, and trying to suss out what's going to happen in 2022. So, I'm bringing your, your lens right back to short term, they look at inflation, on the one hand, and on the other hand, they look at a huge stockpile of cash that Canadians have that they might consider, you know, dry powder for the economy that and these two things will work together. It's not their grandparents, you know, inflationary environment, that's a different playbook. How do you see it in, in, kind of, you know, 30 seconds, do you see the economy continuing to grow because, yes, there's inflation, but there's enough dry powder in the economy to power through it is, would that be your assessment or am I way off base?
Stephen Poloz 32:39
I think you're really close there. For the first time inflation, contemplate prices in the economy went down before they went up, they went down in the first six to eight months of the pandemic, and they recovered in the spring of 2021. Okay, which is, much, by the way, is a year ago and so that base effect, what economists call a base effect is going to, is going to cause inflation to be a better, a fairer comparison over the next six to eight months. So, the big run up was in January to, to, to June of last year. So, January to June this year, we'll see it level off and probably roll over and we're going to fix those supply chain issues. There's too much money at stake for that not to be the case. So we'll get that roll over this year.
Stephen Poloz 33:25
In terms of the money that people have to spend, it's true. People have saved money, not everybody, of course. Some people barely made it through the pandemic, but others are able to save money and so that stock of savings is a big question mark, for forecasters. What's going to happen with that money and I think that the next stage of uncertainty is as period when people would be a little bit more conservative financially, and probably are going to carry a higher level of savings on average, and not spend all that money, but I do think they're going to spend some of it because I know people can't wait to get out there, they for sure can't wait to travel. They can't wait to get, you know, to come to, come to Toronto and stay in the hotel and eat in restaurants and all those things.
Michael LeBlanc 34:09
Yeah.
Stephen Poloz 34:10
And so this is going to happen and so that, and of course the retail experience is fundamentally altered by this, but it's still better in person hasn't. So, I think people are ready, ready to go.
Michael LeBlanc 34:23
Well, my guest is Stephen Poloz. His book is out today, available at all great bookstores where you buy your books. The Next Age of Uncertainty: How the World Can Adapt to a Riskier Future.
Michael LeBlanc 34:34
Stephen, thanks so much for being my guest. It's a real treat to, to talk to you. Thanks for, for sharing your wisdom. It's a great book. And I wish you to live long and prosper as you continue to educate and ruminate on these things. So, thanks again for joining The Voice of Retail.
Stephen Poloz 34:49
It was my pleasure. Thank you.
Michael LeBlanc 34:51
Thanks for tuning into this special episode of The Voice of Retail. If you haven't already, be sure to click subscribe on your favorite podcast platform so new episodes will land automatically twice a week and check out my other retail industry media properties, the Remarkable Retail podcast, Conversations with CommerceNext podcast and The Food Professor podcast with Dr. Sylvain Charlebois.
Michael LeBlanc 35:11
Last but not least, if you're into barbecue, check out my all new YouTube barbecue show, Last Request Barbecue with new episodes each and every week.
Michael LeBlanc 35:20
I'm your host, Michael LeBlanc, President of ME LeBlanc & Company and Maven Media and if you're looking for more content or want to chat, follow me on LinkedIn or visit my website at meleblanc.co
Michael LeBlanc 35:32
Have a safe week everyone!
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