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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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Preparing for “Hysteresis” *

Sunday, November 8th, 2009

(*from the Greek “husteros”, which means “late”)

I thought that I fully appreciated the nation’s employment crisis. My thirty year career in the IT industry gave me a unique perspective on the types of skills that are required to drive and market innovation in next-generation industries, how new technologies continually change skills requirements, and the rapid growth in emerging country skills. I saw how these trends, particularly when combined with complementary trends—such as demographics, educational patterns and political pressures—were fundamentally transforming the types of skills that would be required for success in tomorrow’s technology-based, global knowledge economy.

Then came the Great Recession. As if the disconnect between the future needs of the U.S., and current directions wasn’t already troubling enough, the recession made things much worse. Although the nation’s skills gap continues to worsen, the country no longer has the “luxury” of focusing on the skills that would be required for tomorrow’s jobs or the requirements for developing a new-age, globally competitive economy. We must now focus on the requirements for getting people back to work today. And we must do so in an economy in which:

  • Many traditional industry segments and jobs, such as in the automotive, financial services and retail sectors, will never return;
  • Consumers will be forced to reduce spending due to a combination of unemployment, falling wages and shrunken portfolio and home values;
  • All types of spending and investments will be severely retrained by the needs for families, financial institutions, corporations and governments to “de-leverage”; and
  • Big chunks of two generations—Baby Boomers and Millennials—may be all but locked out of the market for meaningful jobs. (see my 8/3/09 blog, Is the Great Recession Creating Two Lost U.S. Generations?

This explosive combination of trends (technology, globalization, demographics, education and the impact that the Great Recession would have on long-term employment opportunities) that prompted me to focus my research and launch my blog on the challenges and requirements for developing sustainable, high-value careers in the 21st century.

But, as well as I thought I understood the new career challenges, a recent article made me realize that even I–who has continually emphasized the profound structural shifts facing the U.S. employment market–may have underestimated the real magnitude of these challenges. This article, written by Joshua Cooper Ramos, managing director of Kissinger Associates for Time Magazine, is “Jobless in America: Is Double-Digit Unemployment Here to Stay?”

The article examines, and generally validates an off-text remark made by Lawrence Summers (who was a Nobel Prize-winning employment theory economist before becoming director of Obama’s National Economic Council) at a July 2009 conference sponsored by the Peterson Institute for International Economics.

As Summers discussed, the U.S. economy appears to have passed through an inflection point. Traditional economic models failed to anticipate the pace or magnitude of recent job losses and nobody really knows what will be required to get us back to acceptable levels of unemployment—or even if we will even will be able to get back to acceptable levels. The country has already lost nearly 7 million jobs—the total number of jobs that have been created in the entire decade since 1999—and many economists expect it to take at least five years before this number of jobs will be recovered. (And this does not even begin to account for the 100,000 new jobs that must be created each month to compensate for new job entrants or the 11 million additional people that are currently underemployed, either working fewer hours than they would like or are too discourages to even look for work.)

Summers, it seems, anticipated and coined a term for this type of structural dislocation back in 1986. He called it “hysteresis”—what happens when something snaps in such a way that it can never be put back together—like a light bulb which has been shattered by being dropped on the floor.

Traditional job creation measures cannot rally address these problems. Sure, the government can create temporary jobs—at least until political pressure and the ballooning budget deficit prevent it from funding these make-work jobs. New jobs, such as those in retail and hospitality may fund minimum lifestyles, but won’t create the types of skills required for tomorrow’s high-value jobs. Even growth segments, like nursing and education, will do little or nothing to ensure global competitiveness or generate the foreign exchange required to pay for the nation’s habits.

We already understand many of the types of jobs that will not return to the U.S. as the economy improves, but what type jobs that will take their place? Biotech, GreenTech, NanoTech? Perhaps, someday, but nobody knows for sure.

What should students and disaffected workers do in the interim? I hate to repeat myself, but I will stick with the recommendations I made in two recent blogs:

Posted in 21st Century Careers, Creating the 21st Century Workforce, Economic and Political Forces, Economic Forces, Job and Career Opportunities, Political Forces, Societal Forces, Workforce Trends | No Responses »
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Why the Private Sector Must Develop a Socially Responsive Workforce Globalization Policy

Tuesday, June 30th, 2009

The U.S. in general, and U.S. businesses in particular, are understandably preoccupied with the need to reinvigorate business and get American workers back to work. While a lot of attention has been focused on ensuring that the jobs created by government stimulus dollars create jobs in America, rather than in other countries, a lot less thought has been given to another fundamental question:

How many of those jobs that are created in the U.S. will be sustainable, and how many will migrate offshore—pushing newly employed workers back onto the unemployment lines?

Businesses are increasingly caught between the proverbial rock and hard place. On one hand, these companies must continue to grow their businesses and maintain profitability. On the other hand, they desperately want to maintain loyalty to their employees and their communities. These companies are increasingly being forced to look to offshore or foreign-based employees as a means of:

  • Gaining access to the best people—especially technical people—at a time when fewer U.S.-born students are studying science, engineering, math and IT (SEMIT) and the supply of offshore and other foreign-born graduates is exploding;
  • Protecting themselves from lower-cost competitors who already rely on offshore employees; and
  • Building emerging country presences to capitalize on markets that are expected to grow at 2-3 times the rate of the U.S. and other developed country markets.

The country is reluctantly coming to grips with the fact that the majority of blue-collar manufacturing jobs will inevitably move offshore. We have spent the last five decades helping our children prepare for the jobs of the future—a.k.a. knowledge jobs—and retraining displaced blue collar workers for these jobs. Indeed, 75% of U.S. jobs are now in services and more than 60% of these consist of some form of knowledge jobs.

But what happens when these knowledge jobs go offshore? Services offshoring has moved far beyond call centers and IT application maintenance. Accounting, financial analysis, market research, medical diagnostics, legal research and medical diagnostics jobs are all going offshore. So too is cardiac surgery and R&D—the “seed corn” for business growth. China, in fact, is now the most popular location in the world for establishing new R&D hubs and India is the third most popular (after the U.S.). Where will the next secure, high-value U.S. careers come from? What do we train our children for?

Although no one yet knows the answers to these or dozens of other key questions, that has not delayed calls for urgent action. These include proposals and laws that will:

  • Slash the number of H-IB visas;
  • Make it more difficult for foreign students to enter and remain in the U.S.;
  • Forbid companies working on government contracts or receiving government funds to hire non-U.S. citizens; and
  • Tax unrepatriated foreign income.

And all this is before the issue surrounding the offshoring of knowledge jobs has even become a public hot button. What will happen when the public really understands the implications of living in a global knowledge economy? The jobs that will be lost and never created? The compression of U.S. salaries? The confusion surrounding (if not the actual loss of) career options for students and employees?

The reaction will almost certainly surpass that to the globalization of manufacturing jobs. And while the intensity may not reach the level surrounding financial service bonuses, it will last much longer. After all, society and parents have been preparing children for the decline of the manufacturing industry for years by pushing them to prepare for a secure, well-paying knowledge job by going to college. What will happen when large numbers of the highest-end knowledge jobs begin to disappear—and nobody has a clear vision as to the types of jobs that will replace them?

Companies and executives that offshore such jobs will be vilified. Political remedies will almost certainly be draconian.

What’s the private sector to do? Although it will be tough for business to portray the globalization of knowledge work as a positive for American workers, it cannot afford to hunker down with the hope that the PR/political storm will never materialize, or to ride it out.

However, the private sector does have the potential of partially defusing the GKE time bomb—and simultaneously helping to educate and enlist the support of some powerful government allies. How? My next post will provide a playbook describing some of the primary actions the private sector can take to protecting its employees and communities, while simultaneously protecting its customers and shareholders.

For much more on this topic, see my report Why the Private Sector Must Develop a Socially Responsive Workforce Globalization Policy.

Posted in 21st Century Careers, Business Trends, Corporate Social Responsibility, Creating the 21st Century Workforce, Economic and Political Forces, Global Forces-General, Globalization, Immigration and Offshoring, IT Industry and Companies, IT Industry Role in Education, IT Industry Trends, Job and Career Opportunities, Skills Requirements, STEM Careers, Technology's Impact on Job Skills, Workforce Trends | No Responses »
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