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IT Companies as Catalysts in Creating the 21st Century Workforce

Monday, January 11th, 2010

The following is a high-level summary of a more detailed report that summarizes the findings of six months of research into the changing nature of U.S. knowledge work and the requirements for creating a generation of knowledge workers who will not just be able compete, but will not be able to add differentiated value in a global knowledge economy. For a free copy of the full report, click here.

We’ve all seen the statistics and the anecdotes surrounding the declining technical skills of American workers. Although unemployment is at record highs, many positions go fulfilled for lack of qualified applicants. U.S. student interest and skills in science, technology, engineering and math (STEM) education is plummeting relative to other those in other countries and the U.S. is making it increasingly difficult—and unattractive—for talented foreign students and professions to enter and remain in this country. U.S. manufacturing workers lack the skills to work in new-generation factories and promising green tech firms are leaving the U.S. in favor of countries with larger markets and more sympathetic governments.

Unfortunately, most signs suggest that things will get worse, before they get better.

IT vendors and service providers that are based in or have operations in the U.S. face particular challenges:

  • They will find it increasingly difficult to find sufficient numbers of graduates with appropriate skills and will either have to implement “remedial” programs or increase their use of offshore talent;
  • If IT vendors/providers will have trouble finding skilled people, customer IT organizations are likely to face desperate skills shortages;
  • A decline in math and IT skills among customer’s business professionals threatens to limit appreciation for, experimentation with, and adoption of new IT capabilities.

But while IT vendors face some of the greatest challenges from a U.S. skills gap, they are also the best positioned of any major type vendor to address the problem. These vendors, after all, created and will continue to create the tools that are revolutionizing work. They are also pioneering many of the organizational and business revolutions that transform the work environment of the future. IT companies, for example, have been among the leaders in transforming, automating and optimizing traditional business processes, in disrupting revenue models of traditional industries and in globalizing knowledge work and business processes that few ever dreamed could go offshore.

It’s only logical. Companies that are this involved in shaping and defining the future of knowledge work, are also among the best positioned to understand the skills that tomorrow’s workers will need. Although many such companies are already using their large, established training organizations to directly prepare some of their customers and their partners’ employees, a growing number are going much further.

They are forming increasingly innovative partnerships with universities (and to a lesser extent, all types and levels of schools) to help foster the educating of next-generation employees. Schools, including some that traditionally shunned such collaboration as an infringement on their academic integrity, are increasingly welcoming this help as a means of better preparing their graduates for jobs in one of the most challenging job markets in memory.

These types of partnerships, which can include access to free or low-cost hardware and software, help in designing curricula, courses and Internet-based delivery systems and joint research, are beginning to yield some big benefits to the companies and schools alike. In the end, however, students are probably the biggest beneficiaries.

We are, however, only early in to the second generation of such partnerships. The real benefits—to IT companies, schools, students and to the IT companies’ customers and communities—are still around the corner. So, as discussed in some of our recent articles and reports, some vendors and some universities are already beginning to reap some big strategic and financial dividends from their initial partnerships.

Posted in 21st Century Careers, Business Trends, Corporate Social Responsibility, Creating the 21st Century Workforce, Economic and Political Forces, Economic Forces, Education System and Institutions, Globalization, Immigration and Offshoring, Innovation/Entrepeneur, IT Industry and Companies, IT Industry Role in Education, IT Industry Trends, IT Industry's Role, Job and Career Opportunities, K-12, Skills Requirements, Societal Forces, STEM Careers, Technology's Impact on Job Skills, Workforce Trends | No Responses »
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Universities as Catalysts for IBM’s National Roadmaps

Sunday, December 20th, 2009

My December 13 blog, IBM National Roadmaps: Creating National Workforce Development Strategies, described the process by which IBM works with countries to create national roadmaps—detailed development plans that identify the types of services in which countries, regions, states or cities have the foundation for comparative advantage and the steps that must be taken to realize these plans.

Although these roadmaps provide detailed recommendations and timelines for achieving them, what will prevent the roadmaps from “enjoying” the same ignominious fate of so many other consulting studies? 

Two things. First, when the study is a prelude to a potential investment by IBM, the initiative is formalized in a Memorandum of Understanding in which each party commits to defined investments and schedules.

More importantly, IBM has at its disposal a not-so-secret weapon—its University Alliances Program. As discussed in my October 2009 report, IBM’s Effort to Create the Workforce of the Future, IBM has made a huge investment in and is actively partnering with universities. It draws heavily on these relationships to turn its National Roadmap visions into reality.

The Batteries of Nations

IBM sees universities as “the batteries of nations”—the primary vehicles for creating and storing a country’s knowledge. Therefore, it selects clusters of some of each nation’s top research universities and partners with them to help:

  • Create the talent required under the roadmap by helping sufficient numbers of students develop the required skills;
  • Pioneer the services systems that will insure that the services developed in the nation will be effective, efficient and sustainable in a global services economy; and
  • Facilitate the creation of the national infrastructure that will be required for the country to achieve its development goals.

Talent development is the most fundamental of universities goals. IBM’s role is in helping these universities identify the types of skills that will be most required for tomorrow’s jobs, helping them create the curricula for teaching these skills and, where appropriate, volunteer IBM domain experts as advisors or adjunct professors. (See How IBM is Helping Universities Develop 21st Century Workforces for a specific discussion of IBM’s University Alliance program and its talent creation efforts.)

Developing the people required to man a world-class services center is a necessary first step. However, as mentioned, producing service delivery providers (and eventually managers and executives) for these centers provides little real value if the center is not capable of maintaining a long-term advantage relative to other countries with lower cost structures.

IBM, therefore, also helps local universities develop the skills required to design and continually upgrade the processes, technologies and organizational models surrounding the services that will be delivered in the country. It works with these universities to create Services Science, Management and Engineering, or SSME curricula, helps prepare professors to teach and lead research projects around these areas and helps the universities create the type of interdisciplinary research centers required to coordinate and drive research around these systems. And since no university (or even cluster of universities) is an island unto itself, IBM also helps create links among universities in other countries with complementary research focuses.

IBM also helps these universities address the host country’s infrastructure requirements by identifying the region within the country that will be most appropriate for a large service facility—typically an urban center with a critical mass of top universities, talent and the foundations for the required IT, communications and transportation infrastructures. 

It helps them identify the infrastructure enhancements that will be required and works with the universities to create research centers (such as around energy, communications or transportation) to focus on these needs. It even participates in programs designed to help countries implement such systems, as with India’s Great Mind Challenge, in which students (under the guidance of professors) donate time to help local governments automate traditionally manual functions.

Conclusions

IBM provides all these services worldwide and uses the same type process for helping design SSME curricula and services centers in all countries, including in the U.S., as for its new Iowa service center.

However, while IBM does appear to have more formalized models than most other companies for handling more of the pieces for helping countries execute on national roadmaps, it is certainly not alone. Many leading management consultancies perform similar analyses for national and regional governments and for corporations. Meanwhile, any large vendor preparing to make the huge investments associated with creating a large service center in a new country or state, will perform similar analyses and establish similar (albeit typically more narrowly focused) alliances with local universities.

Some such studies have even been performed for the U.S. A few have gone beyond studies, generating bi-partisan support and culminating in laws, such as the National Innovation Act of 2006. But given the incredible level of partisan controversy surrounding the last such study and law (The American Recovery and Reinvestment Act of 2009), it is unlikely that we will see many more such studies, not to speak of broad-based support of any type of meaningful plan, in the near future.

That’s a shame. While the U.S. is currently preoccupied with the need to create jobs, it appears that in our current state, we will be satisfied with virtually any job. We can worry later about whether that job will yield high value, provide a viable career path or be sustainable in an increasingly global economy and workforce.

Oh well, perhaps it is better not to have a plan. After all, if we don’t have a plan or a specific goal, any path will get us there. 

Posted in 21st Century Careers, Business Trends, Corporate Social Responsibility, Creating the 21st Century Workforce, Economic and Political Forces, Economic Forces, Global Forces-General, Globalization, Immigration and Offshoring, IBM, IT Company Strategies, IT Industry and Companies, IT Industry Role in Education, IT Industry Trends, IT/Business Consulting/Outsourcing, Job and Career Opportunities, Political Forces, Skills Requirements, STEM Careers, Universities and Grad Schools, Workforce Trends | 1 Response »
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IBM National Roadmaps: Creating National Workforce Development Strategies

Sunday, December 13th, 2009

I’ve written a lot about IBM workforce development efforts over the past few months. My July 27 blog, How IBM is Helping Universities Develop 21st Century Workforces, specifically examined the company’s Academic Initiative. My October 11 blog, IBM’s Role in Creating Tomorrow’s Workforce, as well as in a more detailed report, I assessed the company’s broader approach to workforce development.

IBM’s workforce development efforts, however, extend well beyond helping universities and its own employees prepare for the careers of the future. The company’s National Roadmaps, and associated Innovation Roadmaps, help entire countries develop and jumpstart broad, national workforce development programs.

National Roadmaps

National Roadmaps (and their state, local and regional corollaries) are government-backed economic development plans that define specific development objectives and identify the requirements for achieving them.

Although government bodies can create their own roadmaps, IBM’s Governmental Programs office can help. This integrated corporate group draws on resources from across the company to help governments create and lay the foundations for achieving long-term economic and societal strategies.

These roadmaps, on which IBM has worked with more than 15 countries (including the U.S., U.K., India, Brazil and Australia), can be initiated as a means of addressing current or anticipated needs, as part of an integrated economic development strategy or, more tactically, as a means of attracting IBM and other technology companies to increase hiring in their countries.

The first step in preparing these roadmaps entails working with the government body to identify the country or region’s unique advantages, their primary development opportunities and their highest-payoff approaches for developing sustainable jobs. IBM then uses its Global Business Services’ Component Business Model to identify the region’s current assets, gaps, hotspots (in which investments will yield the greatest benefits) and key performance indicators (with which to measure and assess progress).

The next step is to reach agreement on three primary requirements for achieving the roadmap’s goals. These requirements are the:

  1. Talent, people and skills that will be required;
  2. Infrastructure, including the educational, IT and communications requirements; and
  3. Investment, to ensure the availability of funds to address the agreed upon talent and infrastructure development commitments.

Innovation Roadmaps

An Innovation Roadmap is the necessary first step in any National Roadmap. It specifies the types of services that the country is aspiring to develop, the number of people that must be trained, the “services systems” that will be required to effectively and efficiently deliver services and the role that the government, IBM and other corporations and local universities will play in developing these service systems.

Services systems are the critical component of any effective service-based model. These systems consist of the combination of people, processes and technologies (either within individual, or across multiple organizations) for producing and delivering a service. It ensures that each service process is specifically defined, consistently performed and measurable.

This type of “scientific” service design ensures that each service instance (wherever, and by whomever it is performed) is consistent and that deviations can be immediately detected and addressed. Just as importantly, it allows each service to be continually evaluated and optimized to improve effectiveness and efficiency. This creates the potential for a type of continual improvement (something of a Moore’s Law of services) and for allowing individual countries to maintain comparative advantage relative to competitors with lower cost structures.

Where’s the Beef?

Interesting concept, but what keeps these Roadmaps from being just another academic study—a presentation to which all participants eagerly nod their heads and a nicely bound report that sits on the shelf to collect dust?

That is the subject of next week’s blog.

Posted in 21st Century Careers, Corporate Social Responsibility, Creating the 21st Century Workforce, Economic and Political Forces, Economic Forces, Education System and Institutions, Global Forces-General, Globalization, Immigration and Offshoring, IBM, IT Company Strategies, IT Industry and Companies, IT Industry Role in Education, IT Industry Trends, IT/Business Consulting/Outsourcing, Job and Career Opportunities, Other Schools, Political Forces, Skills Requirements, STEM Careers, Technology's Impact on Job Skills, Universities and Grad Schools, Workforce Trends | 1 Response »
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Right-Brain Skills for 21st Century Jobs

Sunday, November 29th, 2009

In previous blogs, I’ve written extensively of the needs for tomorrow’s employees to combine quantitative and qualitative skills (articles including Business Analytics as a High-Value Career Opportunity) and the needs to become an interdisciplinary “T-shaped” generalist, rather than a narrowly-focused specialist. (IBM’s Role in Creating Tomorrow’s Workforce among other articles).

There is absolutely no question that the high-value white-collar jobs of the future will require a boarder range of increasingly deep knowledge and left-brained analytical skills. This is a given. But while deep knowledge and strong, increasingly interdisciplinary analytical skills will be a necessary for capturing tomorrow’s jobs, they may not be sufficient to keep these jobs. They certainly won’t be sufficient to command the world-class compensation, security or prestige associated with the type of world-class skills that will be required to succeed in a world in which:

  • Increasingly sophisticated IT capabilities automate (or at least significantly reduce) the amount of relatively routine, “lightly analytic” labor that is currently associated with many business processes; and
  • The rapidly growing number and expanding skills base of hundreds of millions of low-cost developing country white-collar workers (combined with ever higher-speed networks and improved IT-enabled communications and collaboration capabilities) who are capable of performing the type of increasingly sophisticated tasks that have been traditionally reserved for developed country workers.

Just what are the additional requirements for capturing and retaining the high-value jobs of tomorrow? As Tom Friedman explained in his October 22nd New York Times editorial “The New Untouchables”, the experiences of the current recession may provide some important lessons for the future. As Friedman explains, the people who are receiving pink slips during the current recession are “the average practitioners”—those people who perform routine tasks and those that wait for work to be handed to them.

Those who are too valuable to layoff—those that Friedman calls “the new untouchables” are “those with the ability to imagine new services, new opportunities and new ways to recruit work”. These people have the “imagination….to invent smarter ways to do old jobs, energy-saving ways to provide new services, new ways to attract old customers or new ways to combine existing technologies.”

I totally agree with Friedman. Companies, and virtually every other type of organization, need—and will do all in their power to retain—people with:

  • The imagination to identify new opportunities;
  • The initiative and the skills to build compelling business cases around them; and
  • The interpersonal and communication skills required to sell these ideas.

It is true. A small percentage of people—those with truly exceptional analytical skills and/or with exceptional understanding of  particularly important areas—will continue to be sought after, retained and rewarded for their analytical skills alone. The vast majority of us, however, need more. They need varying combinations of the type of right-brained skills that Daniel Pink, in his 2006 book, “A Whole New Mind” (see his blog at http://www.danpink.com/), broadly categorizes as:

  • High concept, “the capacity to detect patterns and opportunities, … to craft a satisfying narrative, and to combine seemingly unrelated ideas into something new;” and
  • High touch, “the ability to empathize with others, to understand the subtleties of human interaction, … and to stretch beyond the quotidian in pursuit of purpose and meaning.”

All employees must certainly have the type of analytical skills and intellectual content that is required of every job. But those who hope to make themselves indispensible to their employers must have much more. They must be capable of coming up with unique, breakthrough ideas and express these ideas in a way that will be compelling to and elicit the desired responses from others.

Easy to say, but awfully tough to do. Few people possess sufficient levels of all three—analytical, conceptual and empathic—skill sets. Fewer still can combine them in just the right way, at the right time.

The big question, however, is how our society can best teach these skills and the ways to most effectively apply them. In theory, it’s much easier to teach analytic skills than it is to teach conceptual or empathic skills. We have certainly had much more experience in doing so. But given our educational system’s very scattered record at teaching even basic analytic skills, can we even expect them to play a role in teaching the other two? Where else will these skills come from? From family? Peers? Employers?

And if we don’t know how to teach these skills, how will we begin teaching another trait that may prove to be even more important in ensuring lifetime career success in an increasingly volatile, unpredictable world? How will we teach the type of adaptability that will be required to continually reinvent oneself to meet the demands of conditions we cannot even ponder, or jobs that we cannot yet define?

Although schools, family, peers and employers must all play some role in teaching these increasingly critical skills, there is no escaping the uncomfortable truth. Every individual must assume greater responsibility for defining their own skills requirements and for ensuring that they develop these skills.

Posted in 21st Century Careers, Business Trends, Creating the 21st Century Workforce, Economic and Political Forces, Global Forces-General, Globalization, Immigration and Offshoring, Job and Career Opportunities, Societal Forces, STEM Careers, Technology's Impact on Job Skills, Workforce Trends | 1 Response »
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An Elusive Hope for “H-1B Inaction”

Sunday, November 1st, 2009

The H1-B visa program, which grants temporary visas for educated, foreign workers in “specialized occupations” to enter the U.S., has long been a political lightening rod. Proponents claim that the program is absolutely required as a means of gaining access to technical skills that are in short supply in the U.S. Opponents, by contrast, contend that it takes jobs away from U.S. citizens and allows corporations to replace high-wage U.S. workers with lower-paid foreigners.

Although vendors have continually pressed for the government to lift the 65,000 visa annual quota for such visas, the political winds—especially during the recession—have been blowing in exactly the opposite direction. Congress, for example, placed restrictions on bailout recipients’ hiring of foreign workers and Senators Grassley and Durbin have introduced legislation that would make it more difficult for all firms to bring workers in under this program. And this does not even begin to consider the dozens of more subtle, less institutionalized “barriers” to the program that Vivek Wahdwa discusses so passionately in his many studies and articles.

Encouraging Signs

Although I do see some opportunities for abuse, I believe that the program, on balance, is not only positive for the U.S., it is essential. We simply are not graduating sufficient numbers of STEM (Science, Technology, Engineering, and Mathematics) professionals from our universities. Moreover, as I have discussed in previous blogs, a rapidly growing percentage of these undergraduate students—and the majority of STEM graduate students—are citizens of other countries (especially India and China).

Our universities need foreign students to fill their classrooms and pay for the professors and facilities that keep our programs ahead of those of other countries. U.S. businesses, meanwhile, need these skills if they are to remain competitive. And, 24% of all U.S. technology start-ups launched between 1980 and 1998 included at least one non-U.S. citizen as a founder, we apparently also need them to help create the new companies that produce such a large percentage of this country’s new jobs.

Given the importance I attribute to encouraging talented foreigners to study and work in the U.S., it may seem odd that I applauded a Thursday 30th Wall Street Journal article that showed that the number of visas issued this year will fall well short of the 65,000 quota for the first time in six years. This is quite a reversal from the typical pattern in which the entire annual quota for visas is snapped up on the first day they become available.

Why did I find this article encouraging? Because it provided at least some evidence that the market is self-correcting. It suggests that vendors, as they repeatedly insist, do bring in foreign workers to address skills gaps within the U.S. market, rather than as a means of substituting lower-paid developing company workers for U.S. workers. My hope is that such results may dampen some of the political pressure that surrounds this program.

The Sad Reality

But alas, such a reprieve is unlikely. First, as we all know, the current 9.8% unemployment rate will inevitably rise before it even begins to decline, and this decline promises to be painfully slow. Political pressure on the program is, therefore, likely to continue.

Just as importantly, another Wall Street Journal article from the same day suggested that the decline is indeed an anomaly—that it was largely attributable to the plummeting growth of Indian outsourcing contracts and that it will reverse as soon as these contracts begin to revive. After all, the vast majority of these visas are taken not by American companies looking for additional workers, but by Indian service providers that bring consultants into this country to assist on projects being performed primarily in India. In the article, N. Chandrasekaran, CEO of Tata Consulting Services, explained that while the company was actively expanding its offshore (i.e., non-Indian) workforce, most of this growth would be in other developing countries. In fact, Tata generally finds it easier, less expensive and more convenient to bring workers from India to address U.S. projects, than it is to hire U.S. employees.

There is, however, another even deeper reason why the demand for foreign technical workers will continue to grow. It is looking increasingly unlikely that the supply of highly trained U.S. STEM graduates will grow anytime soon. Although tentative initial evidence cited in a recent New York Times article suggests that U.S. college enrollment continues to increase, this gain is almost entirely attributable to growth in community college, rather than in four-year university or graduate school enrollment. Moreover, as discussed in my previous blogs, smaller percentages of U.S. university students are electing to study technical subjects.

And if we are really looking for discouraging news, we need look no further than another New York Times article that demonstrates one popular way in which the country is currently addressing the academic deficiencies of our public schools. According to the article, in fear of being penalized for not meeting No Child Left Behind performance requirements, 15 states have found a creative way of staying in compliance—they simply lowered the scores required to demonstrate proficiency.

Given the current state of affairs, the chances of increasing or eliminating the 65,000 per year cap on visas are probably below zero. The best we can probably hope for is a reprieve in populist and political pressures to limit the H-1B program. But, as much as I would like to hope for such a reprieve, I am afraid we will have longer to wait. The demand for talented scientists, technologists and mathematicians will continue to grow as the domestic supply of such people declines. And with unemployment rates expected to continue at high levels for the next several years, political and populist pressures against foreigners are likely to continue to grow.

Posted in 21st Century Careers, Business Trends, Creating the 21st Century Workforce, Economic and Political Forces, Economic Forces, Global Forces-General, Globalization, Immigration and Offshoring, Job and Career Opportunities, Political Forces, Skills Requirements, STEM Careers, Workforce Trends | No Responses »
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Leveraging University Education into Careers for the New Economy

Sunday, September 27th, 2009

As discussed in my September 20, 2009 post, “Is the U.S. Losing the Luxury of Educational Choice?”,  the Great Recession has devastated employment opportunities for new university graduates. Even so, a small percentage of new graduates are not only landing their ideal jobs, but have the luxury of choosing among multiple offers. What do they know that unemployed or underemployed colleagues do not? More importantly, what lessons can their experiences provide for current and future college students who will be looking for jobs in the New Normal—the post-recessionary period that will be marked by slow consumer spending and business investment, slow jobs growth and very, very selective hiring?

Promising Specialties

Jobs—especially good jobs—will be hard to come by for years to come. Employers will face a buyer’s market and will look increasingly for the types of skills that are specifically applicable to their needs. Students that want to maximize their chances of finding quality jobs in their field may wish to consider supplementing their coursework with classes and independent study in areas that employees are likely to value.

First, let me be clear. I would never even suggest—much less recommend—that students forgo pursuing their passions in favor of areas of study that are specifically intended to lead to jobs. Having said this, those students with deep interests in fields that are likely to experience high demand over the next decade, are likely to have big advantages. These fields may include:

Specific academic disciplines, such as:

  • Engineering, all types, but especially electrical and civil;
  • Mathematics, everything from PhDs though college-trained math teachers);
  • Science, from PhDs and MDs though high school science teachers;
  • Business, especially finance (even after the financial industry crash), marketing and MIS;
  • High-level IT skills (versus programming) in areas including systems analysis, database, security and software engineering; and
  • Law, such as around regulatory compliance, privacy and healthcare regulation.

Specialties in key growth industries, including:

  • Health care (which could account for 20% of all new jobs over the next decade), for all skills from doctors to physical therapists and from research scientists to medical records and health information professionals;
  • Education, especially in fields including math and science, particularly in private (rather than public) schools and in higher education;
  • Energy, in most areas of energy exploration, production and distribution and, particularly, in alternative energy and energy management; and
  • Technology, especially in areas including bio-tech, environmental sciences, alternative energy and probably, in the future, nanotechnology.

This said, virtually every industry, regardless of how staid, and whether growing or shrinking, will offer job opportunities. Take manufacturing. Although the broad industry is expected to continue to decline for the foreseeable future, some segments, including aerospace and drugs and a broad range of advanced manufacturing segments are expected to grow. Virtually all manufacturers will need specialists in areas such as operations and supply chain optimization.

The College Conundrum

But what about those whose passions lie in other, less technical fields and slower growth industries and disciplines? What about those whose passions continue to reside in “passé” industries, such as automotive. One the bright side, even these industries will continue to hire university graduates who can help address new needs, such as designing and engineering more fuel efficient cars and capitalizing on the booming demand in high-growth, emerging countries.  

Then, of course, there are academic disciplines that may stimulate a student’s passion, but that have not traditionally experienced huge demand from recruiters. Some disciplines, such as psychology and sociology can, especially with appropriate focuses and supporting coursework, fit well into high-growth areas, such as human factors and user interface design or business service design and optimization. Others, such as art history, anthropology, or my old major, philosophy (good thing it is still a good preparation for law school), pose tougher employment challenges.

Even so, students who major in any discipline can dramatically improve their attractiveness to potential employers through a well-designed selection of complementary courses or research focuses. These include:

  • Mathematics, particularly in areas such as statistics, modeling and simulations;
  • IT, not necessarily in developing and managing IT environments, but in understanding which IT tools are most applicable to a chosen field and how to apply them to deliver business value; and
  • Social networking and Web 2.0 tools and techniques and how to apply them to business needs, such as market research the building of communities and the mining of Web statistics to identify patterns or preferences.

In fact, the application of such tools will be so critical in landing good jobs—not to speak of delivering innovative value within virtually any chosen field—that they should be incorporated as standard components in virtually every discipline and every course. They should be treated as core skills—along with writing, communications and, increasingly, team-based collaboration. They should be specifically taught in foundation courses and embedded in virtually every curriculum. Career counselors, meanwhile, should be able to help students identify career pathways and the combinations of majors and minors, complementary courses, independent research areas and internship opportunities that will be most effective in tuning their educations to the needs of potential employers.

Moreover, all courses should be structured and taught not as self-contained disciplines, but as components of a broad body of knowledge in which multiple perspectives and skills must be integrated to achieve breakthrough perspectives.

Herein lays the conundrum, or actually, the multiple “conundra.”  Universities are generally organized in discrete stovepipes that implicitly discourage cross-disciplinary collaboration. Professors are typically hired and rewarded on the basis of their depth of knowledge in their particular specialty, rather than as interdisciplinary thinkers. Many professors consciously shun practical applications of their work and involvement of corporations in tuning curricula in favor of maintaining academic purity. And few schools have sufficient numbers of career counselors, or sufficient interaction with the companies most likely to hire their graduates, to provide deep insight into the combinations of skills that will be required for different types of jobs.

A relative handful of universities have already begun to address many of these issues. Most, however, will find it very tough to buck tradition, entrenched (not to speak of tenured) interests and ennui. This is especially true during the current recession and in at least in the early stages of the New Normal, when budgets will continue to be squeezed. Most students, therefore, will have to fend for themselves. They will have to think more strategically as to how to tailor and how to position their specific combinations of interests into “value propositions” that will be compelling to potential employers.

Posted in 21st Century Careers, Business Trends, Creating the 21st Century Workforce, Economic and Political Forces, Economic Forces, Education System and Institutions, Global Forces-General, Globalization, Immigration and Offshoring, IT Industry and Companies, IT Industry Role in Education, Job and Career Opportunities, Skills Requirements, Societal Forces, STEM Careers, Technology's Impact on Job Skills, Universities and Grad Schools, Workforce Trends | No Responses »
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Is the U.S. Losing the Luxury of Educational Choice?

Sunday, September 20th, 2009

The U.S. emerged from World War II as the richest country in the world. Although our prosperity has certainly hit a number of speed bumps over the 60 years, our prosperity has given our children an unprecedented luxury. They could study virtually any subjects in which they had an interest and, assuming they did reasonably well in college, have a reasonable chance of obtaining a good job and earning at least, a middle-class lifestyle.

Have we outgrown this luxury? Should students who hope for a reasonable shot at the American Dream follow the lead of Chinese and Indian students by focusing their studies in the fields that offer the best prospects of employment, rather than those that feed their passions?

Realities of the Great Recession

The traditional American educational luxury of pursuing one’s passion (like many other luxuries during our current mini-depression), is beginning to look less and less affordable. Young adults, aged 20-24, currently face 15% unemployment, up from 8.2% in 2007. While recent college graduates certainly fare much better than those with high school degrees, the National Association of Colleges and Employersestimates that corporate entry-level hiring has fallen by more than 20% and that only 19.7% of 2009 graduates who have so far applied for jobs have actually received offers.

In fact, it claims that the total number of jobs for 2009 graduates will fall by 22% from 2008—during a year in which colleges are graduating more students than any year in the last decade. Moreover, many of those students who are lucky enough to receive offers are having to settle for lower-level positions, jobs outside their preferred field and jobs that do not teach the skills needed to compete with those who graduate two or three years from now.

The damage, according to recent study by Yale School of Management economist Lisa Kahn, can be long-lasting. Graduates who join a company during a recession (1981 for her study) not only start at lower wages, but they generally continue to earn lower wages and find it difficult to compete with younger, more recent graduates when normal hiring patterns resume.

And one thing is certain. Things will become more difficult before they improve. Although we have begun to see a number of promising “green shoots,” most economists agree that unemployment rates will rise—probably above 10%—before they are likely to begin to decline around mid-2010. Moreover, it is likely to be 2014 before our economy will produce the same number of jobs as in 2007—and that does not even begin to account for the 100,000 new jobs that must be created each month just too keep up with new labor force entrants. More challenging still, globalization will claim a growing number of new jobs and, increasingly, a growing percentage of relatively high-paying knowledge jobs.

As I have discussed in previous reports (“Why the Private Sector Must Develop Socially Responsive Workforce Globalization Policies“) and articles (“Welcome to the Global Knowledge Economy“),  two separate 2007 and 2008 studies by Princeton Economics Professor Alan Blinder and the Harvard Business School concluded that a minimum of 21% and up to a potential of 42% of U.S. jobs had the potential of being offshored.(Not that they will be offshored mind you, but they have the potential.) The greatest future challenges will occur not in manufacturing, but in knowledge jobs—those that generally require college degrees and that pay moderate to high wages.

Accommodations to the New Normal

Although this sounds pretty gruesome, all is not gloom and doom. Some newly-minted graduates have had no problem finding the jobs they desire. Some even have the luxury of selecting among two or more attractive offers (fewer offers than in previous years to be sure, but still enough to provide a choice). As discussed in the Council of Economic Advisors’ July 2009 report, “Preparing the Workers of Today for the Jobs of Tomorrow”, these offers tend to concentrate in:

  1. A relative handful of industries, such as healthcare, education, aerospace, pharmaceuticals and environmental sciences; and
  2. Job functions and disciplines that entail specialized, post-secondary education, ranging from associate- and vocational-level programs (like medical records technicians and home health aides), to college degrees (registered nurses and teachers), through post-graduate degrees in fields such as medicine, biochemistry and electrical engineering. The Bureau of Labor Statistics’ Occupational Outlook Handbook, 2008-09 provides details on jobs that offer the best and worst prospects through 2016.

This, however, begs the question. Have U.S. children lost—or are they in danger of losing—the luxury of using education to pursue our passions? Must we begin to view higher education as we view apprenticeships and view vocational schools—as preparations for a job, rather than for a preparation for life?

I don’t think so. As I will discuss in my next blog, I believe that students not only can continue to use education to pursue their passions—they must do so to optimize their prospects. A relative handful of students may, as they always have, have the opportunity to reshape realities to accommodate their own interests and needs. The rest of us, however, while still able to pursue our educational and occupational passions, may have to make a few accommodations to an environment that is increasingly being called the “New Normal.”

Posted in 21st Century Careers, Business Trends, Creating the 21st Century Workforce, Education System and Institutions, Globalization, Immigration and Offshoring, Job and Career Opportunities, Skills Requirements, Societal Forces, STEM Careers, Universities and Grad Schools, Workforce Trends | No Responses »
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Offshoring and the Future of American Jobs

Sunday, September 13th, 2009

Offshoring began with manufactured goods. More recently, it has begun to move toward services. While services offshoring began with relatively standardized “process-based” services (application testing and maintenance and, increasingly, development), they had—at least though mid-2008—been moving rapidly up the value chain, into “conceptual” services (application architecture, financial analysis, legal research, etc.) and even “innovative” services (especially R&D).

Services Offshoring

As I discussed in many previous reports and articles, I was convinced that this was just the beginning of a long-term trend under which continually more, and increasingly high-value services work would move offshore. This shift, I claimed, would not be attributable solely (or in some cases, even primarily) to the promise of lower cost. It would be increasingly driven by a shortage of qualified U.S. residents—especially in technical disciplines including science, technology, engineering and mathematics (or STEM).

Now, I am not so sure. Although Indian and Chinese labor costs are not rising as rapidly as they were, their cost advantages relative to U.S. labor are declining. This is especially true for India, given the rupee’s rise relative to the dollar. More importantly, the traditional shortage of skilled U.S. knowledge workers has turned into a surplus.

True, this surplus is far from universal. Some technical jobs continue to go begging for qualified candidates. Overall, however, by the time U.S. hiring does pick up around mid-2010, there will be an even larger pool of unemployed and underemployed Millennials and Baby Boomers (the two lost generations discussed in my August 30, 2009 “Is the Great Recession Creating Two Lost U.S. Generations?”.

The good news for U.S. workers is that the large pool of relatively inexpensive domestic talent will reduce companies’ needs and incentives for going offshore. The bad news (although I contend that it is generally good for the U.S. economy) is that the offshoring of services jobs is an irresistible force. It will inevitably grow.

Even so, the Great Recession may have something of a silver lining. Given that companies are not likely to begin significant net hiring for another six to nine months—and that many economists do not expect the country to regain all its lost jobs until 2014 or so—we now have an opportunity. This is the opportunity to:

  1. Begin providing our own students and workers with the type of skills that will be required for the high-value jobs of the future; and
  2. Address the country’s current drift toward increasingly restrictive and indiscriminate immigration policies which make it more difficult and less attractive for qualified students to study in U.S. universities and qualified graduates to work in the U.S. (Although I will address this issue in future blogs, Vivek Wahdwa writes extensively, and authoritatively on these issues.)

Manufacturing Offshoring

While the Great Recession is likely to give the U.S. a chance to get our services workforce house in order before the services offshoring wave has a chance to reform, the global oil situation may possibly provide a similar opportunity for our manufacturing workforce. This opportunity results from:

  • Our huge number of skilled, un/underemployed manufacturing and construction workers (including those in industries in which many jobs will never return, and some will return only slowly);
  • The growing importance of just-in-time manufacturing and inventory control;
  • The volatility and almost certain dramatic increase in the price of oil; and
  • The threat of supply-chain disruption attributable to everything from pirates to government protectionist actions.

Although it is too soon to tell, it appears that a growing number of companies are beginning to at least consider bringing some of their manufacturing capacity closer to their customers.

Although services industries certainly provide the greatest opportunity for generating the highest-value, most sustainable jobs for American workers, we must also court skilled manufacturing jobs. And, as is the case with services jobs, a large pool of available workers—trained in the skills of tomorrow—will be one of the most effective lures in attracting these jobs.

Posted in 21st Century Careers, Business Trends, Creating the 21st Century Workforce, Economic and Political Forces, Economic Forces, Global Forces-General, Globalization, Immigration and Offshoring, IT/Business Consulting/Outsourcing, Job and Career Opportunities, Political Forces, Skills Requirements, Societal Forces, STEM Careers, Technology's Impact on Job Skills, Workforce Trends | No Responses »
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How IT Services Providers Can Help Clients Address the Coming IT Skills Gaps

Saturday, September 5th, 2009

The growth of the IT industry has depended on broad availability to people with IT skills-people to work both at IT vendor and customer organizations. Although it may be tempting to scoff at the emergence of a skills gap during a period characterized by a combination of recession (when companies are being forced to lay off and defer the hiring of qualified people) and globalization (with a huge growth of IT skills in India, China and dozens of other emerging countries), three fundamental trends will combine to jeopardize the availability of the type of skills that will be required to allow developed country companies (especially U.S., Western Europe and Japan-regions on which IT vendors still demand for the vast majority of their revenues and profits) to effectively apply IT to addressing the business needs of their companies. These trends are:

  1. Demographics, a combination of a dearth of Gen X and Y’ers to replace retiring baby boomers, insufficient transition planning by many companies, and simultaneous declines in both the percentage of young adults graduating from colleges and, especially, those majoring in IT or other technical curricula.
  2. Globalization, whereby the rapid growth of offshore labor supplies and skills (and the pressures this will impose on developed country entry jobs and salaries) will initially reduce both the attractiveness of IT careers and, longer term, jeopardize the development of the type of higher-level skills that developed countries will need to mange their own environments and, most importantly, effectively apply IT to their company’s business needs.
  3. Industrialization/Automation, in which lower-level entry tasks (those that are instrumental in helping people learn the foundation skills that are necessary to learn higher-level skills) will increasingly be instantiated into software.

At first glance, it may appear that the combination of 2 and 3 will address the shortfalls created by 1. Moreover, the combination of all three of these trends could very well result in IT organizations that are much more cost-efficient -and effective-than are traditional organizations.

But while the globalization and Industrialization of IT work will certainly reduce the demand for IT-trained “bodies” in the U.S., it will simultaneously reduce the supply of people trained to provide the types of high-level skills that are required to:

  • Architect and manage sophisticated projects and, most importantly, those that best understand how to
  • Apply IT as a tool to address business needs and achieve strategic advantage.

From where will such skills come? True, offshore sources may well produce many of the architectural and managerial skills required to offset a dearth of developed country skills. Although companies may prefer to retain these and other high-level IT skills onshore, many can probably make do with offshore talent. And since few end user organizations are likely to have the scale or the best practices required to build, staff and manage world-class offshore IT organizations, they may even be able to justify outsourcing these functions to third-party providers.

But what about that mix of deep business process, IT architectural and business strategy skills, combined with the type of corporate cultural sensitivity, that is required to identify and sell the need for, and align the types of organizational resources required to drive such projects to fruition? Such capabilities cannot be offshored, much less outsourced. How will developed countries in general, and individual companies in particular, recruit, develop, nurture, manage and retain such skills? Even more fundamentally, what type of skills should companies look for in people who can grow into these roles, where are such skills being taught, what career paths are most effective in developing these skills and what cultures are required to develop skills into talents?

True, the “mere tasks” of increasing college graduation rates, the percentage of students who major in IT and related disciplines and the quality of the educations these students receive, may well increase the pool of raw materials from which such talent may be developed. But the use of such blunt instruments to increase the genetic probabilities of creating the new generation of such talent is not an effective or efficient means of developing these skills. This is particularly true given a probable decline in the number of entry jobs from which such students can percolate to the top.

Neither the country, nor individual companies need huge numbers of raw skills-they need a totally new approach to selective breeding on the type of talent that will be required for the skills that businesses really need to be competitive in the future. They need entirely new types of education, entirely new career paths and entirely new ways of looking at the type of value that IT must provide in a more global knowledge-based economy. 

Since IT vendors in general, and IT service providers in particular, are playing such key roles in driving the  globalization and industrialization/automation tends, they are best positioned to determine the ways in which these trends will redefine the needs for next-generation IT skills. And since they have so much to gain from the availability of such skills-and so much to lose from death of these skills-they have huge incentives to help create them.  Some, as I will discuss in future reports, are already working to define and help universities create the foundation for these new skills.

Posted in 21st Century Careers, Business Trends, Corporate Social Responsibility, Creating the 21st Century Workforce, Economic and Political Forces, Economic Forces, Education System and Institutions, Global Forces-General, Globalization, Immigration and Offshoring, IT Industry and Companies, IT Industry Role in Education, IT Industry Trends, IT Industry's Role, IT/Business Consulting/Outsourcing, Job and Career Opportunities, Skills Requirements, Societal Forces, STEM Careers, Technology's Impact on Job Skills, Workforce Trends | 1 Response »
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Is the Great Recession Creating Two Lost U.S. Generations?

Sunday, August 30th, 2009

We have all heard of Japan’s “Lost Generation”, the young adults who entered the workforce during Japan’s decade of economic stagnation (generally the 1990s). Since the Japanese economy did not create sufficient numbers of new jobs to absorb these new entrants, these youths-including highly-trained graduates from good universities-ended up taking whatever type of work they could get. 3.3 million people who planned to enter Japan’s lifetime employment economy ended up taking menial odd jobs, contract work or temporary jobs. As explained by BusinessWeek in May 2007 , many of these jobs:

  1. Paid poorly, forcing many to live with their parents, rather than their own homes;
  2. Provided limited job security, which diminished marriage prospects; and
  3. Offered few benefits, which discouraged pregnancies (thereby exacerbating Japan’s falling birthrate).

Worse still, these jobs did not make use of these peoples’ existing skills and did not provide the type of new skills that would prepare them for more responsible positions. So when Japan’s growth resumed in the 2000s, companies shunned these workers in favor of younger, more recent graduates whose skills were current and who were not tarnished by spotty, low-level and non-traditional job histories.

What will be the long-term fate of this Lost Generation? Although it’s always dangerous to predict the future, it’s hard to foresee a future that will be kind to this generation.

So what does this mean for the U.S.?

The Gen Y Challenge

Although I ‘m certainly not predicting that the U.S. will suffer a full lost decade, we could easily suffer a lost half decade. U.S. employment peaked in December 2007 and, according to The Wall Street Journal’s article The Great Recession: A Downturn Sized Up, Stanford economist Bob Hall states that job losses have been piling up at a faster rate since any time since 1948–a pace that Hall expects us to surpass over the next couple months.

These job losses are expected to continue at least through the end of 2009, and possibly well into 2010. Even when the recession ends, growth rates are expected to remain low and most companies will increase the hours of current employees before hiring new people. And as we now recognize, a number of these lost jobs in industries ranging from automotive manufacturing to financial services are unlikely to come back at all. Although growth fields, such as healthcare, education and, increasingly, government are likely to sop up some unemployed workers, it is not yet clear which other industries are going to offer large numbers of sustainable, high-value job opportunities for newly minted knowledge workers—or over what timeframe they will do so.

True, the U.S. is not Japan. Workers who—due to no fault of their own—miss the first step of the employment ladder, are less likely to suffer a lifelong personal stigma. Moreover, some of those new graduates that are financially able are making the best of employment situation by going to graduate school. Even so, many of those Gen Y’ers who are forced to divert from their chosen career paths will face a big challenge. After all, when new jobs do become available, who are companies most likely to hire:

  • Applicant A, a 22-year old that just graduated; or
  • Applicant B, a 27-year old with the same educational qualifications, that has spent the last 3-5 years in menial or temporary jobs that did not exercise existing skills or create new ones?

Okay, newly graduating Gen Y’ers have the potential of becoming one of America’s new Lost Generation. Who will make up the second potential Lost Generation? Consider the Baby Boomers—Gen Y’s parents.

Baby Boomer Lost

It’s ironic. Two years ago, labor force economists and far-sighted corporations were in a panic. Baby Boomers were preparing to retire en masse and there were not enough Gen Y’ers to replace them. Even those companies that expected to be able to attract new entrants were struggling with challenges of capturing and managing the transfer of knowledge from retiring workers to their replacements.

That was before the Great Recession. Baby Boomers, in their mid- and late-50s, are now among the most prominent victims of the layoff ax.

It may be a something of a stretch to consider these people part of a Lost Generation. After all, most have already enjoyed 30 to 40 year careers. Moreover, weren’t many of these boomers planning early retirements, anyway?

Many of them were. But that was before the recession and before many of them recognized that their savings were far below what would be required to fund retirement, much less accommodate unforeseen medical costs or the growing potential of outliving their savings. According to an AARP study that was conducted before the bust, 73% of people over 50 did not even have sufficient income or assets to meet emergencies. Now, as explained in careersecretsauce,  many of these “reluctant retirees” are finding themselves out of work at a time when:

  • Their 401K and home values have been decimated;
  • They have years before becoming eligible for Social Security or Medicare and
  • Many will have trouble securing or affording health insurance once their COBRA plans expire.

Worse still, given the tough time that most older people have in finding new jobs, and the limited number of new jobs that the recovery is likely to produce, few have much hope of finding productive, well-paying jobs in their fields.

Even if these involuntary employees do find productive jobs or manage to create sustainable businesses of their own, many will lose the promise of a secure retirement.  Fewer will be able to muster the spending that will be required to fund new jobs for either themselves, or their children.

Am I overstating this problem? If not, what can be done to reverse or moderate this spiral? Although I plan to address these and other perplexing dilemmas in future blogs, I need your help. What do you think?

Posted in 21st Century Careers, Business Trends, Creating the 21st Century Workforce, Economic and Political Forces, Economic Forces, Global Forces-General, Globalization, Immigration and Offshoring, Job and Career Opportunities, Skills Requirements, Societal Forces, Technology's Impact on Job Skills, Workforce Trends | No Responses »
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