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GE Smart Grid: Ecomagination in Action

Sunday, May 1st, 2011

This is a summary of the report “GE Smart Grid: Ecomagination in Action”. For information on how to obtain the entire report, email the author, Tom Kucharvy, at TomK@Beyond-IT-Inc.com

General Electric (GE) launched its ecomagination initiative five years ago. Although GE certainly intended ecomagination to promote the company’s social consciousness, the initiative’s primary goal was much deeper—to recast GE’s overarching value proposition and establish it as the leader in what CEO Jeff Immelt saw as some of the biggest growth markets of the 21st century, including those around alternative energy generation and energy efficiency. While ecomagination efforts are spread across every division of the company whose products range “from turbines to toasters”, nowhere are the company’s efforts more focused and concentrated than in GE Digital Energy Services, the group that is responsible for General Electric’s Smart Grid program.

Smart grids promise to redefine how electricity is generated, transmitted, used and managed. They will create a new, much more flexible energy infrastructure that:

  • Enables the integration and optimization of more renewable energy (such as wind and solar) and plug-in electric vehicles into the grid;
  • Drives significant increases in the efficiency and reliability of the network; and
  • Empowers consumers to make smarter decisions in managing their energy usage and saving money without compromising their lifestyles.

General Electric pretty much encircles most of the major components of, and a range of devices that will be powered by tomorrow’s smart grids, all the way from the power plants that generate the electricity, through the batteries that store it and the appliances and light bulbs (not to speak of the MRI and wastewater treatment equipment) that consume it. It is also writing software that will be required to manage these grids, and is creating services that will be necessary to design, install, manage and finance these grids.

Although GE certainly has a broad line of smart grid hardware, software and services, it has no intention of providing all the tools required for a comprehensive solution. It does not and will not, for example, provide the ERP, data management or analytics software that utilities will need to manage their businesses, or most of the services that will be required to integrate energy management and distribution systems into their business systems. Rather than build such products and services itself, it is actively building an ecosystem of partners to address these needs.

GE’s ecosystem began with companies that designed software, and sometimes hardware and services, for utilities and other power generators. It is now expanding its smart grid ecosystem to incorporate more commercial and consumer-based software, including ERP, analytics and home electricity management. But while ISVs account for the largest number of GE’s smart grid partners, the companies relationships with systems integrators are rapidly emerging as among its most strategic. These partners, after all, can provide the:

  • Connections to and credibility with the type of C-level and business executives who will drive large-scale transformation projects within their organizations, but with whom GE does not typically engage;
  • Strategic consulting to construct the business cases and provide the change management guidance these customers will require in migrating to smart grids;
  • Integration services to link third-party IT components and other non-GE products into these solutions; and
  • Outsourcing and managed services for grid/back office integration and for the type of complex, multivendor grids that GE cannot itself support.

This, of course, is not to suggest that benefits of such partnerships are uni-directional.

SIs, for example, gain from access to GE’s hardware and software, its deep domain knowledge, its ability to finance huge implementations and from its strong credibility and deep relationships with power generation and distribution executives and managers. Moreover, while GE hopes that SIs will increasingly provide it with access to new customers and to additional decision influencers in current customers, GE claims that as of now, it is more likely to pull its partners into deals, than partners are to pull in GE.

Although all of the parties recognize the potential benefits of working together, effective partnering is never easy. Partners face particular risks in dealing with huge partners, such as GE. The closer the partnership, the greater the risk that smaller partners’ value add and customer relationships may be subsumed by or eventually subjugated to those of the giant., There is also always a potential that big, multi-faceted vendors may decide that software and services for which they initially relied on partners, are too strategic or too profitable for them to cede to partners.

Moreover, GE Energy has far more experience in working with customers and suppliers, than it does with go-to-market partners. It lacks a deep partnering culture and is still in the early stages of building a formal partner organization and program.

Such limitations, however, have the potential of working in General Electric’s favor. Its current lack of a partnering philosophy and structure gives it the flexibility to strategically think through its software and services objectives, to communicate these objectives to its partners and to develop a partnering program, in conjunction with these partners, from scratch. Just as importantly, since the group does not currently have large or comprehensive software or services businesses to protect and feed, it has more flexibility to strategically align its visions with those of its partners.

GE Digital Energy does appear to have a genuine desire to partner and to learn from the experiences of other industries (especially the IT industry) that have already gone through the trials and errors of creating synergistic partnering models. It must, however, decide exactly which forms of value—hardware and especially software and services—it wishes to retain for itself, and which will remain the province of partners.

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GE’s Ecomagination: From Business Commitment to Business Philosophy and Social Contract

Sunday, April 17th, 2011

Five years ago, when General Electric first launched its ecomagination program, many, including some within the company, saw it primarily as a marketing and PR effort. As discussed in my April 3rd post, the company has long since proven that it was much more than a marketing program. It has now become a fundamental part of its business. And, judging from its commitments to extending the program, ecomagination is on the path to being core to GE’s business.

In fact, ecomagination appears to be more than a central part of GE’s business. Ecomagination is expanding the company’s view of and approach to partnering and is  beginning to become integral to the way GE views its business and even to its contract with society.

The Growing Ecomagination Partner Ecosystem

This, however, is not to suggest that GE believes that it can field all the technology required for its ecomagination solutions. As I discuss in greater depth in a recent report I wrote on GE’s work in building an ecosystem around its Smart Grid program, GE’s divisions are working more closely with each other to facilitate the development of and to support standards that facilitate interoperability across multiple industries (energy, aircraft, healthcare, etc.) as well as to leverage technologies and processes developed in one, to support others.

This being said, each division is also building partner ecosystems around their own ecomagination offerings—ecosystems that consist of combinations of customers, governments, academia and all types of large and small businesses. The company is also forging relationships with other global innovation leaders, exemplified by partnerships with:

  • Honda, to bring the smart grid to aerospace;
  • Better Place, with which it shares a vision to accelerate the global deployment of electric vehicles;
  • Masco, to help builders design and build more energy-efficient homes that use ecomagination home technologies,
  • Cities, including Portland, Oregon and Orlando, Florida to help them meet sustainability goals while simultaneously creating jobs; and with
  • Leading research universities, like Columbia, to realize the next generation of clean energy innovation.

And, where the partners do not yet exist, GE is helping to create them. The company’s ecomagination Challenge is an open call for breakthrough ideas to create a cleaner, more efficient and economically viable grid and to accelerate the adoption of smart grid technologies that leverage GE infrastructure. Like IBM’s Global Entrepreneur Initiative, it provides entrepreneurs with access to GE technical and commercial experts, introductions to VCs and other partners, and opportunities for ongoing technical and go-to-market relationships. The Challenge came with a pledge of $200 million (of which GE funded about half, with the other half coming from its VC partners), to be invested in promising start-ups. The winners, who were announced in December 2010, include:

  • ElectricRoute, which created a communications gateway point for electric transmission and distribution systems;
  • WinFlex, which produces rotors for wind turbines from light, flexible and inexpensive composite materials; and
  • Capstone Metering, which applies remote communications technology to water meters.

GE recently extended the ecomagination Challenge with call for solutions for home energy creation, management and use.

Ecomagination as Integrating Umbrella

Ecomagination serves as both an inspiration to and obligation of GE’s businesses. Led by Jeff Immelt’s conviction that investment in ecomagination will be good for all of GE’s stakeholders, the ecomagination goals for R&D spend, revenue growth and environmental responsibility (energy efficiency and greenhouse gas reduction) ensure that all the company’s businesses contribute. Ecomagination provides corporate leadership, not only by providing the structure for the product approval process, but also by providing continuous feedback on best practices, environmental trends, and the continual monitoring of claims to ensure GE leadership.

Ecomagination also serves as a central coordinating group for key stakeholder outreach, with executive-level, strategic customer engagements; employee engagement; and collaboration with NGOs, governments and other corporations. Furthermore, ecomagination.com raises topical and sometimes controversial issues, and invites the public to participate in the conversation.

This year, ecomagination is expanding its role in driving cross-business initiatives. GE’s heritage with electric vehicles dates back nearly 100 years to Charles Steinmetz and is entrenched in many GE businesses. GE Capital’s Fleet Services is a world leading leasing company. GE’s Licensing & Trading works with automotive manufacturers to improve fuel efficiency. And of course, GE Energy designs and manufacturers electrical equipment from the WattStation EV charger, through all of its local distribution equipment, to the generating technology itself. The company is aggressively endorsing electric vehicles (EVs) through its normal channels, and especially through its commitment to put 25,000 EVs on the road by 2015, both in its own fleet and in those of key customers. The ecomagination team is leading the company’s coordination of these activities.

Given all this, there can be little doubt that ecomagination is far more than an advertising program. It has become a fundamental precept of General Electric’s business philosophy and its social contract. Nowhere is this more evident than in the company’s Digital Energy group’s Smart Grid program (which I discuss in more depth in my aforementioned report).

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GE’s Ecomagination: From Marketing Campaign to Business Commitment

Sunday, April 3rd, 2011

Most of us have seen General Electric’s ecomagination advertisements. But while ecomagination may make for a catchy slogan and an interesting, and even compelling advertising campaign, it is much more than a marketing program. It is a totally new way of viewing General Electric’s value proposition, of defining markets and conceiving products and of allowing GE to “Create Shared Value”—a set of business policies and practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates.

GE CEO Jeff Immelt has spoken directly and often of the private sector’s responsibility to the country. He believes that the private sector must embrace the realities of environmental, national security, and other societal concerns; and that it must assume responsibility for addressing these challenges.

The company’s ecomagination initiative is a central component of his willingness to stake General Electric’s future on this proposition. His recent acceptance of President Obama’s invitation to chair the newly created Council on Jobs and Competitiveness is indicative of his believe that business must partner with the government to jointly address such needs.

The Genesis of Ecomagination

One may be forgiven for assuming that GE’s five-year old ecomagination initiative, which has been at least partially promoted around GE’s concerns for the environment and a desire to “leave the earth as they found it”, has its roots planted firmly in the clouds.

This, however, is not the case. The initiative, which is intended to promote the development and sale of energy-efficient products is, in fact, a hard-headed business decision. It is based primarily on Jeff Immelt’s conviction that energy efficiency and alternate energy are becoming big growth markets and that most resources, and especially energy resources, will become increasingly scarce, costly and subject to government regulation. And since GE is already so ensconced in so many related markets (from water purification to jet engines and all stages of the electricity chain, from huge nuclear plants through home appliances and light bulbs (or as one exec poetically puts it, “from turbines to toasters), it was ideally situated to stake out a leadership position.

This vision of proactive business opportunity is bolstered by another, much more defensive calculation—that Americans’ perception of big business is in a “dark cycle” where the people who can make our economy better (including corporate executives) are considered its worst enemies. With citizens’ trust in big business at an all-time low, Immelt is concerned that “populism will turn to protectionism”, harming not only economy as a whole, but GE in particular.

To some, ecomagination was initially perceived primarily as a marketing campaign. The program, however, is a corporate business strategy built upon the belief that one doesn’t have to choose between economic viability and environmental responsibility; you can have both. The program has steadily gained momentum as public awareness and commitment grew around sustainability, as GE doubled down on its investments, and as the market has come to accept—and indeed demand—a growing number of energy-efficient products. Over the program’s first five years, GE:

  • More than doubled its investment in cleaner technologies, from $700 million in 2004 to $1.5 billion in 2009;
  • Earned more than $70 billion in revenue from ecomagination; and
  • Introduced more than 90 ecomagination products. (Note: Ecomagination products must be both significantly and measurably better in operating performance and in environmental performance. GE business applications are audited by GreenOrder, a sustainability strategy consulting firm. Compliance is measured by a GE corporate approval council.)

GE surpassed a number of its initially, publically-stated ecomagination goals and has now committed to going further—re-doubling its ecomagination investments over the next five years to $10 billion and growing ecomagination revenues at twice the rate of the company’s top line. Employees and investors have long since come to recognize that what’s good for the environment can be good for business—and vice versa.

Ecomagination Initiatives

Ecomagination initiatives now pervade the company. General Electric has and will be dedicating $15 billion over 10 years to work on new ecomagination-related projects and virtually every division of the company is involved, with many introducing new product categories, in addition to fielding more energy-efficient versions of traditional offerings.

The company’s power and energy groups, in particular, are commercializing smart grid solutions, sodium and lithium battery technology, offshore wind, multi-fuel gas turbines and new generations of nuclear reactors and clean coal technology. Examples across GE groups, as shown at www.ecomagination.com/technologies, include:

  • GE Appliance’s ENERGY STAR qualified washers, refrigerators, dishwashers and GeoSpring water heaters;
  • GE Aviation’s GEnx Aircraft Engines and Fuel and Carbon Services consulting solutions and ecomagination-certified TrueCourse™ flight management system to help airlines optimize jet fuel use;
  • GE Energy’s 7FA and LMS 100 gas turbines, wind turbines, nuclear generators, and Integrated Gasification Combined Cycle coal gasification process;
  • GE Lighting’s compact fluorescent and LED lights;
  • GE Rail’s Trip Optimizer throttle control systems and especially its Evolution series of locomotive;
  • GE Software + Services, which pulls together offerings from multiple groups, including GE Digital Energy, with its Digital Energy UPS system, and GE Intelligent Platforms, with its Proficy software platform, that helps industrial and commercial companies improve energy efficiency;
  • GE Water’s line of advanced water and wastewater treatment systems, which cut water consumption, energy usage and its associated greenhouse gas emissions); and
  • GE Healthcare, which is generally focused on the company’s parallel (to ecomagination) vision of “Healthymagination,” is also improving the energy efficiency and reducing emissions and paper usage attributable to products by going digital, including through its use of Digital X-Ray, Digital Mammography, High Efficiency MR (Magnetic Resonance) Systems and Voluson ultrasound technology.

Then there is the rapidly growing number of specialized ecomagination products, including a growing portfolio of solar- and wind-powered alternative energy systems, smart meters and recently announced Nucleus home energy management hub and Wattstation electric car charging station.

Even the company’s Finance units get in on the ecomagination action. Its Business Finance group, for example, finances purchases of the company’s locomotives and jet engines and the building of solar and wind farms. It also earns money from eco-friendly assets by investing in third-party verified carbon offset projects that would not have been viable without the offsets. GE Energy Financial Services now counts on renewable energy investments for 30% of its $26 billion portfolio.

In fact, GE Broadcasting is one of the few divisions that is not in the ecomagination act (unless, that is, you count the ecomagination commercials that are run on NBC and other GE networks). But now that 51% of NBC Universal is being sold to, and will be operated by Comcast, it no longer counts. Smile

Whatever one believes may have been the original motivation for ecomagination, there can be little doubt that it is now fundamental to the General Electric’s business. But, as discussed in my next post, it is now becoming more than a core part of the company’s business. It is becoming part of the company’s Business Philosophy and its Social Contract.

Posted in Corporate Social Responsibility, Smart Infrastructure | 1 Response »
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The Governmental Mandate of Shared Value Creation

Sunday, March 6th, 2011

My February 6 blog (Shared Value Creation: The Next Evolution of Corporate Social Responsibility and of Capitalism) explained the many benefits that corporations can achieve through a new, more business-aligned approach to corporate philanthropy. This approach, which is called Shared Value Creation, consists of “policies and practices that enhance the competitiveness of a company while simultaneously advancing the social and economic conditions of the communities in which it operates,” It is a concept, which as Harvard Business School professor Michael Porter explains, is becoming more than a corporate opportunity—it is practically becoming a corporate mandate: a form of “self-interested behavior” that creates economic value for the company, by the very process of creating societal value.

As Porter described in his January 2011 Harvard Business Review article, when applied effectively, shared value creation can burnish a company’s brand, attract new customers and help a company recruit employees and improve employee commitment to the organization. This, however, is only the tip of a value proposition that can go much deeper. It can directly help the company enter new markets, improve economies in existing markets and create totally new business opportunities—generating cost savings, as well as revenue gains.

While the HBR article and my February 6 blog focused on the opportunities for corporations to benefit from Shared Value Creation, a January 2011 Accenture study, New Waves of Growth: Unlocking Opportunity in the Multi-Polar World, effectively suggests ways in which shared value creation can help communities and countries, as well as companies.

Capitalizing on the Four Waves of Growth

According to the Accenture report, governments that hope to create significant growth in GDP and jobs over the next decade must capitalize on what it identifies as four major waves of growth. These waves are based on opportunities being created around:

  • The “silver” economy. The graying of the population, as through initiatives in areas including connected health, health and welfare products and services, lifelong finance and new products that are optimized for older people;
  • The resource economy. The providing of more reliable and cleaner sources of energy and other types of increasingly scarce resources (land, water, food, minerals, etc.), including the need to build and manage intelligent infrastructures and processes (as for energy, buildings, water and land management and so forth);
  • A multi-technology future. The rapid adoption and increasingly integrated roles that new technologies (such as superfast broadband, cloud computing, sensors, analytics, mobility and security) will play across all industries and processes and as integrated with traditionally distinct disciplines to create new fields such as bio-informatics, micropayments and manu-services;
  • The emerging-markets surge. The rise of a multi-polar world in which economic activity and resources are increasingly gravitating toward emerging economies and rapidly growing urban centers and creating new opportunities for all types of low-cost goods and services, citizen services and smart infrastructures.

Countries that effectively capitalize on these waves can, according to an Oxford Economics’ analysis commissioned by Accenture, gain huge benefits. The U.S., for example, could add 0.7 percentage points to its otherwise anticipated 3.1% average annual GDP growth and create 9.7 million additional jobs by 2020—a level of economic output and job growth equivalent to the current size of the entire U.S. auto industry. Other countries could achieve correspondingly similar gains. Germany, for example, could boost average GDP growth by 32% and employment by an additional 3 million, United Kingdom by 24% and 2.6 million and India by about 9% and 37.5 million jobs.

The Government Mandate

Although Accenture paints an encouraging picture for countries and societies that can effectively ride these waves of growth, accomplishing these results will take years of hard work. Strategies must be developed, smart infrastructures built, business environments enhanced and most critically, millions of people must be educated, trained and retrained to create and effectively utilize new capabilities.

This leads to the biggest challenge and the biggest opportunity of all. For better or worse, no single company, government or sector of society has the resources, the skills or the reach required to define comprehensive national strategies for, much less create the foundations for capitalizing on these waves. Positioning a country to capitalize will require entirely new levels of cooperation and coordination among all types of businesses, all layers of government and many different non-profit organizations (especially schools and universities).

This is a challenge in that so few countries have seriously attempted to foster this type of cooperation (and in that many attempts to do so have failed). It is an opportunity in that there has never before been such an urgent need to do so. Emerging countries must do so to address the rapidly growing aspirations (not to speak of the expectations and demands) of their citizens. Developed countries must find ways of compensating for relative declines in economic power and security and especially for preparing their citizens to compete and thrive in an increasingly global workforce.

The good news is that there are a growing number of examples in which corporations, schools, foundations and government entities are cooperating to address common needs. These, as discussed in my last two years of blogs and reports, include Microsoft’s Partners in Learning Program, IBM’s Academic Initiative, Intel’s Teach and Entrepreneurship programs, General Electric’s Ecomagination program (see my forthcoming March blogs and report) and IBM’s Smarter Planet and Cisco’s Smart+Connected Communities initiatives (see my forthcoming April blogs). Not to speak of Accenture’s own Skills to Succeed program.

But as effective as some of these and other industry efforts have been, and as promising as some of their prospects, most address only specific, often local elements of huge, multi-faceted national problems. Large-scale success will require thousands of such initiatives and increasingly formal coordination among them.

There is, however, precious little evidence that most countries are prepared for such efforts. The U.S., in particular, has a fundamental and very vocal disagreement as to whether such efforts will indeed help or harm the country. But disagreement notwithstanding, President Obama is intent on creating foundations for such cooperation. He has, for example, engaged foundations in his effort to enhance community college curricula and graduation rates and has recently enlisted two high-profile business executives to chair groups that are intended to align public and private-sector efforts around initiatives to prepare the nation for the future (and incidentally, to capitalize on Accenture’s waves).

In January 20011, he named General Electric CEO Jeffrey Immelt as chairman of his new Council on Jobs and Competitiveness (whose mission is described by its name) and Steve Case as chairman of Startup America (whose goal is to promote entrepreneurism and high-growth startups). Both are likely to enlist other executives into their efforts and coordinate their efforts with other business constituencies. Immelt is likely to draw members and ideas from groups to which he belongs, such as the Business Roundtable and the Business Council. Startup America, meanwhile, has already won support of and about $400 million in funding from IBM, Intel and Hewlett-Packard. Both groups will at least formalize private sector inputs into critical government decisions. Ideally they will do more, such as usher in an era of cooperation among public, private and non-profit sectors.

After all, as Accenture explains, no one segment of the economy controls all of the levers required to mobilize all the country’s efforts. “Coordination among the three sectors—business, government and non-profit—will no longer be a bonus, but a necessity.”

Posted in 21st Century Careers, Corporate Social Responsibility, Technology's Impact on Job Skills | No Responses »
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Elementary, My Dear Watson?

Sunday, February 20th, 2011

Don’t get me wrong. There was absolutely nothing elementary in IBM’s phenomenal work on Watson. The public debut of the machine (actually the real “magic” was in the software, rather than the hardware), was a triumph in a world that had been claiming, as far back as the 1980s, that “artificial intelligence” was just around the corner.

Still, there is indeed something about Watson that is clearly elementary: something that should give us great hope for the future—both Watson’s and ours.

The “Jeopardy Challenge” , in which IBM’s “Watson” computer handily defeated the two highest winning players in Jeopardy history, was only the latest in a series of Grand Challenges, in which IBM pushed the envelope of computer science to perform tasks that were previously considered beyond the realm of computers—the use of IBM’s Deep Blue in beating the world chess champion, Blue Gene’s role in decoding the human genome and even IBM’s role in enabling the U.S. the land a man on the moon.

Watson, however, went an order of magnitude beyond these previous triumphs of computer power. While the computer’s encyclopedic database and computational power certainly enabled its success, these capabilities were already available on off-the-shelf IBM hardware (2,800 cores and 15 TB of memory in 90 of its Power 750 servers and 20 TB of disk storage linked in a cluster).

Its real accomplishment was in its ability to interpret not just natural language, but the types of puns, metaphors and idioms that have come to characterize Jeopardy. This was enabled by a combination of off-the-shelf hardware and especially the secret sauce embedded in the Jeopardy-specific algorithms over which IBM researchers wrote, tested and tweaked over the last three years. And don’t forget the confidence rating and wagering algorithms which, while resulting in numbers that may have sounded strange to humans, were based on calculates of the odds for all types of contingencies.

Will the Real Watson Please Stand Up

Watson was certainly not perfect in its victory. In the first night’s contest, Watson modestly bested the score of one of its human competitors, and only tied that of the other. Night two, in the first round of Double Jeopardy, things got downright scary, with Watson being the first to buzz for, and correctly answer 24 of the 30 total questions. Watching the frustration of the helpless humans, one could be forgiven for thinking of 2001: A Space Odyssey’s HAL.

Then, with its blunder on its first round Final Jeopardy (Did Toronto recently secede from Canada and join the U.S.?) and its “merely human-level” performance (although it did reach a number of correct answers, but not in time to beat the other contestants) in round two, I got really scared. I began asking myself whether Watson consciously “backed off”, avoiding running up the score, either out of empathy for its flailing competitors, or out of fear that a machine that so dominated humans would be feared and shunned by society. While Watson did end up winning the three-night competition, the ultimate outcome wasn’t really determined until the last Daily Double, and the wager (that ensured it could not loose) that it made on the last Final Jeopardy question.

Why did I find this so frightening? Because I, who have been in the IT industry for more than 30 years, actually began to attribute human feelings to a hunk of silicon!

It is Indeed, Elementary

But I digress. As I discussed above, there was absolutely nothing in IBM or Watson’s Jeopardy performance that was “elementary.” It was, by any account, a stellar achievement.

So, what was so elementary about Watson’s triumph? The comparison of its success in winning a television game show, to:

  • The enormous challenges that civilization faces (and, not coincidentally, that IBM is attempting to address with its Smarter Planet initiatives); and
  • The contributions that Watson technology and learnings have the potential of making to addressing these challenges.

First, let’s recognize—Watson is a room size machine, residing in a specially designed and extensively cooled data center and that even its off-the-shelf components (without even accounting for the cost of developing the algorithms that were so fundamental to its success) cost hundreds of thousands of dollars. But, as Computer Intelligence guru Ray Kurzweil explained in his February 17 Wall Street Journal editorial, at the current rate of computer price-performance advances, Watson’s power is likely to fit within single server in about seven years and within a PC in a decade.

Just as importantly, a “real-life” system would not have to contain the sum total of world knowledge. These systems will be:

  • Tailored to the needs of a specific discipline (such as medicine or finance) or the needs of a specific company;
  • Will have access to the Internet, third-party search tools and external databases, rather than having to operate as a self-contained unit; and
  • Will not be required to devise answers that meet its minimum confidence levels within the three seconds that are required for Jeopardy.

Watson-like capabilities, will, in other words, be available to the public (or at least some segments of the public) within the next couple years. Meanwhile, IBM has already partnered with Nuance Communications to bring speech recognition capabilities to Watson (initially, specifically for healthcare).

Watson’s Next Careers

After Watson’s first (albeit brief) stint as a television star, it is ready to explore more “mundane” careers. But what are these careers likely to be?

While the Star Trek computer was a model for at least some of IBM’s researchers, most of Watson’s opportunities will be much more down-to-earth. Many are based on the coupling of Watson’s “Deep Question Answering” technology and deep analytics in decision support applications. Possibilities—or indeed, probabilities—may include:

  • Customer Service, which could improve service time and quality while simultaneously disrupting a business model in which so many call center jobs have moved to low-cost countries;
  • Financial Analysis, such as in the combing of huge quantities of structured data and unstructured information to identify likely acquisition targets;
  • Travel, such as in a new-generation navigation system in which drivers can ask for best ways of avoiding traffic, or more interestingly, to suggesting routes from X to Y that take one past attractions that best meet your profile, such as museums, restaurants or wineries that make 90+ point wines; and
  • C-suite assistant, to identify and assess business trends, evaluate a broad range of contingencies or running what-if analyses, such as the impact different product and advertising mixes may have on revenue and profitability.

This leads to what is probably the most important and imminent of applications for Watson Technology—its use in health care. Although the potential applications are numerous, the first and highest-impact application is likely to be in diagnostics, such as where a doctor can input lists of symptoms, medical histories, and a broad range of other relevant information to identify possible illnesses.

Better yet, it could be used to review individual electronic medical records to identify symptoms that a doctor may miss or large volumes of electronic records to identify linkages that have not previously been discovered. Longer term, it could even be used to bring first-line diagnostics to remote, emerging country villages that do not have access to doctors, such as by allowing nurses or technologists to input systems into a computer, to a remote Watson-based diagnostic system.

Many potential applications, as in health care or engineering, could face big legal questions. What if Watson made a mistake in diagnosing an illness or in calculating tolerances for a bridge? Or what if Watson correctly suggested an option, which was dismissed by the doctor or engineer? Or have we taken the first step into the science fiction era, where computers may obviate the need for humans in even some of the most demanding of professions?

While the answers to such questions will have to wait, the application of Watson technology to these challenges will not. The day after Watson’s Jeopardy victory, Columbia University Medical Center and the University of Maryland Medical School announced a plan to work with IBM on health care analytics research, with a goal of launching a commercial diagnostic and treatment offering over the next 18-24 months.

We will have to wait to see whether Watson will be as successful in its future careers as it was in its first. My guess, however, is that Watson’s descendants will have as great an impact on society, business and the nature of knowledge work, as the Internet.

Posted in IBM, Innovation/Entrepeneur, Job and Career Opportunities, Technology's Impact on Job Skills | No Responses »
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Shared Value Creation: The Next Evolution of Corporate Social Responsibility and of Capitalism

Sunday, February 6th, 2011

Corporate social responsibility (CSR) and corporate philanthropy (CP) used to be managed separately from the business. They consisted largely of cash contributions that companies viewed, at best, as an effort to give back to the communities in which they operated and their employees lived. At worst, they were seen as a subtle form as extortion that companies had to pay to appease and demonstrate their “commitments” to their communities.

This is changing. A growing number of companies now recognize that:

  • CSR and CP initiatives can deliver big business benefits to their organizations; and that
  • They can often deliver much greater value to society by contributing technology and expertise than they can by contributing just money.

Many companies, for example, now recognize that reputations for social responsibility can burnish the company’s brand, attract new customers, aid in recruiting employees and improve employee commitment to the organization. Some even claim that their CSR and CP activities have increased their share prices by attracting incremental new investments from the growing number of Social Investment Funds.

This, however, is only the tip of a value proposition that can go much deeper—a value proposition that can directly help the corporation enter new markets, improve economies in existing markets and create totally new business opportunities. In fact, Michael Porter and Mark Kramer, in their January 2011 Harvard Business Review article, argue that companies must recast narrowly defined CSR and CP programs around a proposition for creating shared value—an approach designed to deliver as much value to the company as to society. They insist that a structured approach to Shared Value Creation (the latest non-intuitive buzzword for efforts intended to deliver both business and societal value) can, for example, yield:

  • Big cost savings, as in the $250 million savings (a $2.71 return on every dollar it spent on these programs from 2002 through 2008) that Johnson & Johnson attributed to its employee wellness programs (not to speak of demonstrated improvements in employee attendance and productivity);
  • Big revenue gains, as in the $18 billion that General Electric derived from the sale of Ecomagination products in 2009, a category of offerings that is expected to grow at twice the rate of total company revenues over the next five years (an issue that I will discussed in my February 20th blog on GE’s Smart Grid strategy); and
  • Big improvements to employee leadership development and retention, as with IBM’s Corporate Service Corps (as I examined in my January 23 blog and accompanying report), which deploys teams of high-potential employees on 30-day projects to help emerging countries address some of their most pressing societal needs.

Porter and Kramer, in fact, go further, much further. Not only do they view Shared Value Creation as the next evolution of CSR and CP, they also view it as the next evolution of capitalism—a more sophisticated form of capitalism that “arises not out of charity but of a deeper understanding of competition and economic value creation.” It is a form of “self-interested behavior” that creates economic value to the company, by the very process of creating societal value. A form of behavior that will also help mend badly frayed corporate and capitalist reputations and facilitate a more productive relationship between business and governments.

This “Harvard School” view of Shared Value Creation appears diametrically opposed to the “Chicago School” view in which Milton Friedman famously equated the spending of shareholders’ money for any purpose other than to advance the interests of the business as a form of “theft.”

Perhaps, however, these views are not as philosophically opposed as they may appear. After all, even Friedman was not opposed to all corporate giving. He admitted that corporate philanthropy could be justified if it served a business objective, such as increasing customer loyalty, improving employee teamwork and motivation or strengthening the marketing of a company’s brand.

But whichever side of the supposed philosophical divide on which one may fall, the issue is becoming increasingly moot. A rapidly growing number of very large, and very influential corporations (including virtually all of the largest technology companies) have instituted large CSR and CP programs and most have conceived and are managing these programs in way that is intended to create shared value. And this does not include the hundreds of small companies that have built their entire business models around addressing societal needs or the growing number of social entrepreneurs who are creating hybrid organizations that blur the line between for-profit and non-profit organizations.

In other words, regardless of whether you consider social value creation to be a new generation of capitalism, or just a new generation of corporate social responsibility, one thing is clear. More and more companies—and especially technology companies—are becoming convinced that they can, do quote another well-known economic philosopher, Benjamin Franklin, “do well by doing good.”

Posted in Corporate Social Responsibility, IT Industry Role in Education | No Responses »
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IBM Corporate Service Corps: Integrating Business Objectives and CSR

Sunday, January 23rd, 2011

This is a summary of my January 2011 report “IBM Corporate Service Corps: Integrating Business Objectives and CSR”. For more information on this report or to purchase it for $995, click here.

IBM has one of the strongest talent development programs and one of the strongest corporate social responsibility (CSR) programs in the technology industry. What do you get when you combine them? IBM’s Corporate Service Corps (CSC)—a great example of how companies can do well by doing good (see my May 2010 report for a view of another IBM initiative, this one or integrating its university CSR and internal talent development initiatives.)

IBM’s Corporate Service Corps is a leadership development program, inspired by the U.S. Peace Corps. It is intended to put IBM’s most valuable resource—its people—in places that can most benefit from their expertise, and provide these employees with experiences from which they can gain broad leadership and cross-cultural experience. It provides select, high-potential employees with intense experience in working with global teams on short-duration, high-intensity projects in emerging countries. It is also a big expansion of IBM’s CSR efforts that turns social volunteerism into a life learning experience.

CSC Objectives

The program, which was launched in 2008, deploys small, 8-12-person multi-disciplinary teams to provide pro bono consulting—helping emerging country government, nonprofit and non-governmental organizations develop specific plans for addressing some of their most pressing societal needs. These can range from upgrading a government agency’s IT environment and processes, to developing a supply-chain management process for getting agricultural products to market, to improving the quality of a community’s public water supply. While each project is different, each is intended to result in practical blueprints for solving problems that are limiting a country or a community’s growth and their peoples’ ability to contribute to that growth.

Although CSC is absolutely intended to deliver broad societal benefits to emerging countries, it is first and foremost a corporate leadership development program. Its goal, however, is not so much to teach specific business skills as it is to instill the qualities individuals require to become leaders in a globally integrated business. Participants are given deep, intensive exposure to emerging markets and diverse cultures and experience in forming and working in multi-cultural, multi-disciplinary teams. They are expected to return with improved cultural literacy, better appreciation for the strengths and limitations of different cultures and work styles, and especially greater adaptability and global teaming skills.

Although the program entails a lot of additional work (30-day in-country assignments plus extensive preparation and post-return requirements) in addition to the employee’s day job, participation is seen as both a privilege and a reward. It is a validation of one’s accomplishments in the company and as a steppingstone to advancement within the company. This makes the program extremely popular and selective—attracting about 10,000 applicants for the first 400 positions.

CSC Results

Although there is certainly plenty of anecdotal evidence to validate the program. IBM, being IBM, requires more formal evidence that its goals are being met. Harvard Business School assistant professor Christopher Marquis designed and conducted a formal survey of participants and recipients and evaluated the results as part of a case study on the program. His findings: CSC is “effective and executing on its goals and mission” (of providing a unique—and highly scalable and cost-effective—leadership development experience, societal benefits to emerging countries and improving employee’s perception of and commitment to IBM). IBM claims the program also delivers some additional side benefits, as in improving IBM’s brand in new and emerging markets and even in creating some new sales opportunities for the company.

In some ways, there is little that is really new in CSC. It combines two relatively common corporate practices—the use of overseas postings as an executive development tool, and encouraging and funding employees to perform volunteer work. The big difference is that IBM has integrated them into a fundamentally new form that delivers these experiences to far more executive candidates than would be previously possible, and does it in a cost-effective way that delivers additional benefits to the company.

CSC Futures

IBM will absolutely continue, and modestly extend the program. Its ultimate value, however, is likely to transcend IBM. Some of IBM’s customers, including Novartis, Federal Express and Dow Corning are already learning from and have begun to implement similar programs. Meanwhile, the U.S. Agency for International Development (USAID) recently signed a Memorandum of Understanding with IBM to create the Alliance for International Corporate Volunteerism (ICV). The alliance will expand upon the CSC model to facilitate participation by many other companies and create corporate responsibility networks that integrate activities of corporations, governments, international organizations, foundations and other participants. USAID will also serve as a delivery coordinator for some of these projects, thereby increasing the chances that CSC’s consulting recommendations will deliver their intended value.

Posted in Corporate Social Responsibility, IBM, IT Industry Role in Education, IT Industry Trends, Skills Requirements, Workforce Trends | No Responses »
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Partnering Strategies for a Smarter Planet: Developing Win-Win Partnerships with IBM

Sunday, January 9th, 2011

This is a summary of my new January 2011 report “Partnering Strategies for a Smarter Planet: Developing Win-Win Partnerships with IBM”. For more information on this report or to purchase it for $995, click here.

IBM’s Smarter Planet initiative is the foundation of what, if successful, may represent one of the most fundamental corporate transformations of all time—transforming IBM from a provider of IT solutions into an architect of solutions to some of the world’s biggest, most pressing needs.

IBM intends for its application of IT tools to real-world “where digital meets physical” needs to enable it to leverage its strong position in the maturing, “relatively small” IT market into an entirely new role—that of being the primary digital enabler (and, in some cases, the centerpiece) of solutions for dozens of other much bigger markets, from healthcare to energy and transportation to government. The company’s contributions to solutions to some of the world’s most pressing problems could also provide very nice side benefits, including enhancing the company’s already strong brand image.

The benefits of IBM’s Smarter Planet focus, however, are likely to transcend society and the IBM Corporation—they are also likely to benefit a number of IBM’s partners. Maximizing these benefits, however, can require some careful balancing.

Smarter Planet Ecosystem Benefits

IBM bases its entire Smarter Planet vision on an obvious (at least to those of us in the IT industry) proposition—traditional real-world infrastructures and processes can be made much more effective and efficient by making them more:

  • Instrumented, as through the use of sensors;
  • Interconnected, as by the Internet; and
  • Intelligent, through the use of analytics.

Since all these of these capabilities are already available, IBM and its partners have opportunities to begin providing real value around them today. And since all of these capabilities will be ubiquitous in the future, these markets will grow rapidly into huge opportunities. Companies that develop, tune and develop proof points around their current offerings have the potential of establishing themselves as leaders in these markets of the future. And, oh yes, their solutions also have the potential of providing big societal benefits in the normal course of doing business.

But how can companies achieve the market traction required to establish themselves in such new markets? Individual ISVs typically lack the visibility and the scale; large physical market vendors (like Eaton and General Electric) have little experience with sensors, Internet enablement or analytics; and IT system vendors (including IBM) lack the experience, not to speak of the brand permission and customer relationships, required to build smart buildings and power grids.

The solution, of course, is to build an ecosystem that seamlessly integrates the products, expertise and brands of thousands of complementary companies into compelling solutions to pressing needs. And while a number of vendors are building their own ecosystems around specific classes of solutions today, IBM’s Smarter Planet is, by far, the broadest (encompassing 25 different initiatives), the biggest (consisting of thousands of partners) and the most highly visible (with 35-40% customer recognition).

Dancing with Elephants

While IBM is building both standards and go-to-market ecosystems around each of its 25 Smarter Planet initiatives, those for Smarter Buildings and Cities are currently the most developed, followed by those around Energy and Sustainability. But even within these, IBM’s own offerings, much less its brand and customer relationships are limited. This leaves plenty of white space for partners.

Consider, for example, Smarter Buildings. While all partners must, at a minimum, provide products and services that contribute to an end-to-end solution, IBM particularly values partners that can deliver additional capabilities. Partners like Honeywell, Schneider and Eaton, for example, have established relationships with real estate developers and construction companies and can provide IBM (and other ecosystem partners) with the brand permission and deep customer relationships required to play in areas like smart building design and operations. They also have deep expertise in areas such as HVAC and lighting and may often offer performance-based energy contracts (which IBM does not). IBM not only encourages, but depends on such partners to take the lead in many accounts.

IBM, in turn, also provides considerable value to these companies. First, as mentioned, the Smarter Planet brand provides considerable market recognition and an established base of partners. IBM, of course, is also more likely to have IT and C-level contacts among companies looking to build new buildings and retrofit older buildings and can bring partners into Smart Data Center contracts. It has the IT skills required to integrate all building systems into a seamless network, the digital dashboards required to monitor and manage them and the analytics software to optimize performance and anticipate and prevent disruptions. Just as importantly, it has a huge, established ISV program with well defined processes and a library of Industry Frameworks that greatly reduce ISV’s work in building applications.

IBM certainly provides partners with new opportunities to expand into new and vastly larger markets than most could hope to enter alone or with their own smaller ecosystems. Meanwhile, its extensive technical and market development assistance programs can proactively help its partners capitalize on these opportunities.

But while all participants can value from participation in Smarter Planet ecosystems, such relationships are not without friction. There are risks to dancing with IBM, as there are with any giant. Although the company has relatively few products that compete directly with those of its ecosystem partners, IBM has huge technical, consulting and outsourcing services organizations and it values account control at least as much as any other company.

Partners, therefore, must tread carefully. On one hand, in order to gain the greatest value from the relationship, they must understand the types of value they can provide that will make them most valuable to IBM at different stages of the market and of specific customer engagements. On the other hand, they must simultaneously ensure that their brand, their value adds and their customer relationships are not subsumed by or eventually subjugated to those of IBM.

The bad news is that uncertainly and jockeying for position is inherent in all new markets. Maneuvering is always difficult and sometimes imposes great stress in the relationship. The good news is that as markets grow (and those for Smarter Planet solutions inevitably will) relative roles always seem to sort out, go-to-market relationships are solidified and coordination processes are formalized. Partners will increasingly recognize and agree on when and how they can work together, and when they will not. These relationships have become so common in the IT industry that a word has been coined to describe them. The word is “coopetition.”

Posted in Business Trends, Corporate Social Responsibility, IBM, IT Industry Trends, Smart Infrastructure, Societal Forces, Technology's Impact on Job Skills | No Responses »
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Accenture Contributes Its Professional Development Skills to Non-Employees

Sunday, October 3rd, 2010

Accenture has always considered professional development to be one of its core competencies. It recruits tens of thousands of new employees each year, puts them through intense training programs and follows up with ongoing, career-spanning, personalized professional development and mentoring regimes. In 2009 alone, it dedicated nearly $800 million to these efforts.

The company is now extending its commitment to and skills in training and professional development beyond the walls of its own company to thousands of people—250,000 by 2015 to be exact—who do not, and probably never will work for Accenture. Its newly announced Skills to Succeed initiative is intended to help disadvantaged people from all around the world to develop the skills they will require to get good jobs or to start and build their own businesses (and thereby create jobs for themselves and others).

Accenture, both itself and through its foundations, is funding this initiative through a commitment of more than $100 million in cash, in-kind donations and employee time, over a three-year period. It considers this effort to be so important that it has developed a global operating model to align all aspects of the company and foundations’ corporate citizenship efforts around Skills to Succeed. In fact, it has established a goal that 80% of all the company’s corporate citizenship activities will be aligned around this initiative by the end of 2010.

However, while Accenture itself manages and delivers training to its own employees, Skills to Succeed training will be delivered almost exclusively through independent non-profit partners that have proven skills in and share Accenture’s commitment to skills training, and that can “drive change and achieve scale” across multiple countries and continents.

Building the Skills to Succeed Initiative

Accenture launched the first stages of this program in mid-2009, with a $48.3 million contribution—primarily of in-kind skills (such as consulting, hardware, software and office space), secondarily cash and, to a small extent, pro bono contributions of employees’ time (as in teaching, mentoring and so forth). It aligned its efforts around three primary objectives:

  • Employment Building, which is the initiative’s primary focus and is intended to train and prepare disadvantaged people for secure jobs that pay well above local average salaries. It begins by providing training in skills required for these jobs to employment-ready individuals (generally, from high-school juniors and community college students to unemployed workers who are looking to be retrained for new jobs and industries). While much of this training focuses on IT skills (an area in which many NGOs have current programs and skills), Accenture plans to address many types of skills that are “at the intersection of business and technology”. These may include IT operations, programming, engineering drafting and accounting/finance. The program also helps prepare these trainees for actual jobs (such as by placing them in part-time jobs or internships while they are still in school) and actually capture new jobs (as by helping them develop resumes, plan job-search campaigns and secure and prepare for interviews).
  • Business Building, which is intended to help entrepreneurs create new employment opportunities such as by helping them strengthen their leadership skills, develop business plans and strengthen capabilities including financial operations, hiring and customer service; and
  • Market Building, in which Accenture helps governments, NGOs and companies build access to markets where current market infrastructures are not sufficient. Examples include a partnership with the U.S. Agency for International Development to improve rural farmers’ access to information on agricultural and marketing practices.

One of the first and largest efforts was in Brazil, where Accenture partnered with two local agencies (Rede Cidada and the Committee for the Democratization of Information) to establish Conexão (the local membership organization of Youth Business International), which provides free technology training to unemployed people and free consulting to small, promising entrepreneurs. The program was a huge success, training 13,500 young people (3,500 of whom have already been hired) and supporting 124 entrepreneurs.

This success led to more than 80 additional programs so far, with more than 15 NGO partners in both developed and developing countries. Examples include:

  • United States, where Accenture is working with Genesys Works to train inner-city high school students in skills including IT, engineering drafting and accounting and is placing them in part-time jobs during their senior years. Accenture executives also teach business preparedness skills to students in community colleges;
  • United Kingdom, with Youth Business International, to help disadvantaged young people find and get appropriate educations or occupational training and mentor them on skills required to become successful entrepreneurs;
  • India, with the Dr. Reddy’s Foundation, to train disadvantaged young people in business process outsourcing and technology skills;
  • Philippines and Cambodia, partnering with Passerelles Numériques to help underprivileged students build the skills they need to obtain IT jobs; and
  • Several countries in Africa, where it is working with Enablis to build the skills of young entrepreneurs.

Accenture’s Objectives and Methods

The concept for Skills to Succeed was born about 18 months ago during a full-scale assessment of the company’s corporate philanthropy efforts. It was looking for a single unifying effort that addressed a critical, global societal need; that reflected the company’s values, culture and character; and in which Accenture had skills that would enable it to contribute unique skills and expertise, in addition to money.

Its initial efforts in partnering and launching the program, combined with the successes it achieved and the lessons it learned, validated its commitment to the initiative and prompted it to set an ambitious goal—that of training and preparing 250,000 disadvantaged people (anyone from high school juniors to older people who need retraining for or who hope to create their own sustainable, well-paying jobs). Although Accenture is open to all types of NGO partnerships and skills training programs, it assesses each opportunity in terms of its ability to:

  1. Cost-efficiently achieve significant, sustainable, demonstrable and measurable results;
  2. Harness the energies of Accenture and the enthusiasm of its people; and
  3. Be scaled to train large numbers of people and leveraged across multiple states and countries.

But while Accenture is open to examining many different types of programs and partnerships, one thing is not negotiable—its objective. Accenture and its executive committee are fully committed to Skills to Succeed. The company is wrapping virtually all of its corporate philanthropy programs and contributions into this program and is committing all levels of Accenture employees to actively contribute to these efforts. It is also beginning to engage customers and partners in this program, as by working with them to place interns and program graduates.

But for all of Accenture’s commitments and efforts, the company understands that that achieving its 250,000-person objective within five years is a big challenge. It is committed to investing $100 million or more of its resources and the capabilities of its people to the program and is rapidly scaling its efforts. It has, for example, already added 80 new initiatives and is actively evaluating others. The means of accomplishing its goals are flexible. The objective, of preparing a quarter of a million people for rewarding jobs, is not.

Posted in 21st Century Careers, Accenture, Community/Other Colleges, Corporate Social Responsibility, Education System and Institutions, IT Company Strategies, IT Industry and Companies, IT Industry Role in Education, IT Industry's Role, Skills Requirements, STEM Careers | 2 Responses »
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Occupational Opportunities for the Next Decade

Sunday, July 25th, 2010

In my June 27 blog, Payoffs of a College Education, I discussed that the Department of Labor’s Bureau of Labor Statistics (BLS) 2010 Occupational Outlook Handbook portrays particularly strong growth in jobs for college graduates. These jobs will grow at a faster rate (15% versus 10%) than those that typically require less education and yield higher weekly and lifetime earnings and greater job security. In fact, every step up the educational ladder, from high school diploma, through some college, bachelor degree and professional degree (with a small exception for PhDs), tends to improve virtually every aspect of a person’s career path.

But the level of educational obtainment is a pretty high-level view of the job market. Although it does emphasize the value of graduating from college, it does not, in and of itself, provide much guidance as to which occupations offer the best employment opportunities, the highest earnings potential and the best opportunities for advancement.

Tomorrow’s Largest Growth Occupations

In 2006 (the study’s benchmark year), about half of all jobs (see Chart 3 of the handbook) in college-level occupations were concentrated in three broad categories—education (21%), healthcare (14%) and computers (13%). Adding two others, management (12%) and business and financial operations (11%) covers more than 70% of all college-level jobs.

A nice start, but still too macro a view to provide meaningful help in career planning. Medical jobs, for example, run the gamut from physician assistants to surgeons. Management jobs run from education administrators to CEOs. Jobs within each category have very different educational requirements (from bachelor or below through post-graduate) and are likely to produce vastly differing numbers of total job openings through 2018 (from 66,000 physician assistants to 1 million registered nurses) and growth rates (2% for CEOs to 50% or more for some IT jobs).

The tables supporting the Bureau’s conclusions provide details for multiple occupations in each of these categories. As one would expect, the greatest number of projected openings are concentrated in the three largest college-level job categories: education, healthcare and computers. The first two categories share a few similarities.

Both, for example, are:

  • Being driven largely by population growth and demographic trends;
  • Characterized by especially strong growth in one very big class of occupations;
  • Consist of a large number of moderate and relatively low-paying jobs, and more modest numbers of higher-paying (especially in healthcare) jobs that typically require a minimum of four years of graduate school.

Health care growth, for example, is driven overwhelmingly by the growth in need for RNs, which is projected to grow at a 24% rate and account for almost two-thirds of all listed healthcare openings. Although there will be big needs for teachers at all levels, the demand for K-2 teachers is growing at only a 10.8% rate, while that for post-secondary teachers (and some small specialty teachers) is tracking at 23%.

IT Professions

IT-related job trends are very different. First, although the handbook profiles only five distinct occupations (out of ten that BLS specifically tracks), all four of the specialized, high-skill occupations (network systems and data communications analysts, computer software engineers, systems analysts, and network and systems administrators) are slated for hyper-growth through 2018, at rates ranging from 28% to 53%.

These jobs, most of which require “only” bachelor’s degrees, also provide some of the highest salaries—more than twice the median for all occupations. Many, even during the depths of the recession, are already characterized by strong levels of college hiring, rising salaries and shortages of qualified applicants at all levels of experience.

Moreover, the need for IT skills is being driven not by demographics, but by the rapid, increasingly critical need to incorporate IT into virtually every business, every process and every “machine” (from PDAs and televisions through office buildings and jumbo jets). And this is just the start. Business decisions increasingly require real-time analytics and seamless, real-time collaboration tools. The Internet, meanwhile, is creating new businesses and new job requirements every minute of every day.

This being said, not all IT jobs are created equal. As I mentioned, four of the five listed categories are growing at hyper-rates. The number of openings for the fifth—computer programmers—is actually declining. This is not at all surprising. The demand for the lowest skill IT occupation, data entry clerks, has been plummeting for years. BLS now anticipates similar (albeit slower) declines in the number of openings for computer programmers. These positions, as I’ve discussed in a number of previous blogs, will be increasingly replaced—and compensation reduced—by a combination of:

  • Technology, including more automated development and test processes, software reuse and tools that can be used by non-IT professionals; and by the
  • Rapid growth in the availability and use of lower-priced, offshore IT professionals.

Moreover, while these forces are initially felt in relatively low-skill IT professions, they are already beginning to be felt in ever more demanding occupations. Increasingly sophisticated, policy-based IT management software, remote diagnostic tools and a growing trend toward the delivery of IT as an outsourced service will slash the number of people required to maintain an application, manage a given number of servers or support a given number of users. Moreover, as I have discussed in previous blogs, the number of offshore IT professionals is exploding, their education and training is getting much better and they are moving rapidly up the IT value chain, providing increasingly sophisticated services—including services that integrate IT skills into other college-level occupations.

So, while highly demanding technical specialties may offer promising opportunities for the next decade, IT professionals, like sharks, must continually move forward—or they will die. They must continually evolve their skills to address the most promising career opportunities. Most importantly, they must learn to apply these skills in ways that deliver not just “IT value”, but true “business value” to their company’s line-of-business constituents and especially their customers.

But as the number of opportunities for dedicated IT professionals is large and rapidly growing, this does not even scratch the surface of the need for IT skills in tomorrow’s job market. Virtually every college-level job in America is becoming, to one extent or another, an IT job.

This is not to say they must develop, manage and maintain their company’s IT infrastructure or applications. They must, however, be able to integrate a broad range of increasingly sophisticated IT tools into every aspect of their work. And I don’t mean that people must use word processing and email. Those are yesterday’s skills. Today’s professionals must also be fluent in Internet search, in computer-based collaboration and in social networking. Tomorrow’s professionals must seamlessly incorporate sophisticated information access and analytics tools into their day-to-day tasks and learn dozens of new tools and techniques that most of us can barely identify.

Over the next decade, virtually every professional will have to be an IT professional, as well as a professional in his or her own specific field.

Posted in 21st Century Careers, Business Trends, Community/Other Colleges, Creating the 21st Century Workforce, Economic and Political Forces, Economic Forces, Education System and Institutions, 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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