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The World
Economic Forum’s 2001 Annual Meeting (WEF) in Davos, Switzerland
brought together more than 50 heads of state, 1,000s of top executives
from global corporations and dot.coms, leading academic experts
and artists from a vast array of fields, plus the odd celebrity
who requires only one name (Oprah, Bono). In the news, but not in
the conference itself, were a diverse group of protestors disenchanted
with the path globalization is taking. After the riots at the World
Trade Organization’s recent meetings, the Swiss took no chances,
surrounding Davos with roadblocks that kept protestors away from
the meeting and ski slopes with a combination of small arms, riot
cannons, and some odd craft-looking rattan riot shields.
When LiNE Zine learned
I’d be attending Davos, they asked me to record my personal impressions
of the most interesting new ideas shared there relating to learning
in the new economy. Given the theme of this year’s WEF meeting,
“Bridging the Digital Divide,” and the consensus summarized by HP
CEO Carly Fiorina, that knowledge workers would be the most important
resource for the “21st Century Corporation,” there was
surprisingly little attention devoted directly to learning. Thus,
my comments will concentrate on key trends in technology, the new
economy, and the implications for learning that I saw a hint of
there.
The New Economy
Unlike last year’s
WEF Meeting, where the Net was virtually synonymous with the “new
economy,” this year’s sessions had a far healthier balance among
different sectors and new technologies. The Net was a still a major
topic, with a particular focus on business-to-business, broadband,
and wireless. (All attendees received a first-hand taste of the
wireless revolution when they were given a free iPaq handheld PC
that enabled them to exchange emails with other participants and
access the Web for selected news sites during the meeting). But
at least equal attention was devoted to the genetic revolution,
which is likely to make the Life Sciences—ranging from biotechnology
to pharmaceuticals to agriculture—the largest sector of the global
economy by 2020.
In addition, a panel
that included Xerox Parc’s Retiring Chief Scientist John
Seely Brown, Carnegie Mellon’s Raj Reddy, and Cal Tech’s Nate
Lewis cited and demonstrated other exciting technologies already
under development that we can look forward to as we move into an
age that, according to Brown, will be marked by “fusing bits and
atoms.” These exciting technologies include:
 Miniature handheld devices that will use voice input and
be powered by tiny fuel cells or “gastrobots” that eat for energy
(e.g., a jelly donut contains more energy than most batteries).
A digital nose that can identify an odor and send its signature
over the Net.
Smart materials able to self-organize in response to their
environment, including digital clay that can be used for anything
from kids’ toys to self-repairing objects, or rapid prototyping.
Smart car transmissions that can eliminate the vast energy
wasted when cars are idling.
Walking wheelchairs that can climb stairs.
Re-writable, flexible e-paper onto which we can download
a book or daily newspaper.
The Net Economy
Even among these
cool advances, the Net was still recognized as a major enabling
technology that will transform virtually all aspects of our lives
and work. Indeed, the Net is likely to be so pervasive that most
argued for dropping the distinction between old and new economy
firms. Net-enabling the key processes of the organization will become
table stakes for firms that want to succeed in the global economy.
Sustainable competitive advantage will require going beyond automating
transactions to building a network of partners who can come together
to deliver a distinctive set of products and services that creates
real value for customers.
The CEO of large
firms that filled the conference saw the decline in dot.coms making
it much easier for existing organizations to attract the talent
needed to transform their businesses. If these organizations are
to succeed, however, they will need to use the Net to reinvent their
organizations and how they relate to their employees. I was fortunate
to be able to present the new results of a multi-year research project
(see accompanying article),
in which we found individuals have very different objectives from
work and that the Net can be a powerful tool for individualizing
the employment relationship.
The greatest near-term
prospects for the Net appear to be in the business-to-business sector.
The existing business-to-business exchanges being formed by consortia
of the largest buyers in different sectors, however, were judged
unlikely to succeed. Their unwieldy governance arrangements and
the reluctance of the key players to share vital business information
with competitors makes it hard for them to operate with the speed
and flexibility needed in these rapidly evolving markets. Rather,
Net experts such as John Hagel, author of Net
Gain and Net
Worth, and Masayoshi Son, founder and CEO of Softbank,
saw more promise in private networks, such as Dell’s and Cisco’s,
where companies create deep, long-term alliances with strategic
partners to enable them to share information seamlessly across a
virtual value chain. Sustaining such alliances is difficult, noted
Son, and thus creates a potential competitive edge for those firms
that can make them work: “It is hard to share the benefits 50:50
in each joint venture. So, we seek out partners, like Cisco and
Microsoft, where we can do a series of things over time. On some
they may get 70% of the benefits, on others we will, but the overall
goal of the partnership is that we both benefit equally.”
Son also noted dramatic
shifts underway in the global Net population likely to have a profound
impact on the U.S.’s dominance of this new technology. Currently,
there are roughly 300 million Net users worldwide, with about half
based in the U.S. (down from 60% last year). By 2005 he expects
there to be 1 billion Net users, with the U.S. and Europe each accounting
for just 20% compared with 500 million users in Asia. (Note: I think
this significantly underestimates the number of users likely to
be in other parts of the world, particularly Latin America.) As
a result, the locus of innovation and Net activity will shift significantly
toward Asia.
These shifts are
already underway. Japan has pioneered the use of the wireless Net,
which DoCoMo
is now extending worldwide through strategic investments and partnerships.
South Korea, which last year had only 250,000 broadband users, now
has 4 million thanks to major state investment and deregulation
of the telecommunications market. This compares with approximately
6 million current broadband users in the U.S. Korea’s infrastructure
has already led to the growth of major new application industries,
with the most popular being movies on demand, video chatrooms and
collaborative on-line video games. Son’s confidence in the growth
of the Asian market was signaled during the WEF meeting, when Softbank
announced the creation of a strategic partnership with Cisco to
invest over $1 billion in companies that will be building the next
generation Net for Asia.
Like optical and
broadband technology, memory technology has been progressing even
more quickly than Moore’s law, according to Reddy. With the capacity
of $1 worth of memory doubling every year, it may soon be possible
for individuals to wear a small device that records all their sensory
experiences.
This device may be
one means to help us deal with the vast explosion of information
that the Net and other digital technologies have spurred. Michael
Lynch, founder and CEO of Autonomy,
estimated that the total amount of recorded digital information
is being doubled every three months. His firm is a leader in another
Net-related technology—smart agents—that may be even more useful
in coping with the information explosion. While he concludes that
the potential of smart agents to fully automate on-line transactions
has been greatly exaggerated, his firm is already using them to
help employees in a majority of the Fortune 1,000 with tasks such
as automatic searching of key external information sources and prioritization
of email.
Learning in the
New Economy
According to Cisco’s
John Chambers: “Elearning will be the application of the
3rd wave of the Internet. The first wave of the Net was
about automating transactions and key processes. We saved $1.4 billion
by putting six key processes on-line. When we put customer support
on-line, we got a 200 percent increase in productivity, and even
better, now our customers would rather use the Net than speak with
a person to solve their problems. We’re now in the second wave of
the Net, where things like virtual manufacturing and the virtual
close are transforming the organization. When you can close your
books each day, it takes empowerment to an entirely new level, since
everyone in the organization has the information they need to assess
how we’re doing, how the environment is changing, and what we need
to do to respond.”
But despite these
dramatic pronouncements, in most organizations, elearning does not
appear to have reached its full potential. A few leading firms,
such as Dell, Qualcomm, and IBM now deliver a high percentage of
their training totally on-line or supported with net-based material
and exercises. Many other WEF participants have experimented with
a few elearning applications, but elearning is still a rarity in
most organizations. Among the most important factors hampering the
diffusion of elearning in firms appear to be the lack of broadband
infrastructure and the substantial costs of developing high quality,
engaging courses.
In the education
sector, some countries have made substantial strides in overcoming
the pipeline problem. Singapore already has broadband connections
in all of its educational institutions and Britain hopes to have
finished wiring all of its schools by 2002. It is not the technology,
but people and organizational issues that appear to be slowing the
effective use of the Net to raise the quality of education in the
developed countries.
Among the barriers
identified during the WEF meeting were:
Trying to deliver the skills for the digital economy with
an industrial model of education delivery operating on an agricultural
society’s timetable;
A teaching workforce that often knows less about the Net
and computers than their young pupils;
An educating budgeting process that allocates 85% of salaries
for staffing, and less than 1% of resources for new product development.
For
the developing nations, the problem is far more severe, but some
interesting projects are underway. Cisco has built Networking
Academies in all of the main countries where it does business,
including China and India as well as U.S. inner cities, often increasing
achievement scores by 50% or more over prior levels through a combination
of web-enabled learning and high standards. Reddy is heading the
Universal Library
effort to put most of the world’s great books and art on line so
individuals all over the world will have access to the information.
And Ayisi Makatiani, is attempting to provide an entire continent,
which has fewer phones than New York City, with access to this knowledge
through Africa Online. He noted,
however, some of the problems with this high tech vision of access:
“When we had a book, we could duplicate it for all of the children.
But with limited wireless access, it is much harder to share the
information among students.”
Indian software entrepreneur,
Vinay Deshpande, observed that one of the reasons for the lack of
access was that PC and device makers were targeting high-end products
to the West’s wealthy consumers, instead of using existing technologies
to build an inexpensive appliance that a much higher percentage
of the world’s population could afford. What is needed is the equivalent
of the recent introduction of hand-cranked radios, which have enabled
remote users without reliable sources of power to listen to news
and music from around the world.
Despite these obstacles,
the wonderful potential of the Net for enabling self-learning among
even the most deprived children, such as those wandering the streets
of India, was demonstrated at Davos with a short video. It showed
an experiment where a computer and keyboard hooked up to the Net
were placed in the wall of a building on an Indian street, with
no written instructions. Within a few minutes, children had gathered
and not only figured out how to operate it, but had logged onto
the Disney channel.
A very different
film by Oliviero Toscani, however, officially opened the 2001 WEF
meeting, illustrating that even if it were possible to bridge the
Digital Divide, it would not solve many of the developing world’s
greatest problems. His film juxtaposed images of malnourished children
and war refugees with pictures of the some of the great technological
achievements of the 20th century. The not so subtle sub-text
was that while we’d invested in putting a man on the moon, we were
unwilling to devote similar resources to providing the necessities
of life (food, clean water, vaccines) to the world’s children.
The Gift
Of all the wonderful
sessions at Davos, for me the most rewarding and unusual learning
experience came on the final evening, courtesy of England’s Medici
String Quartet. These four talented musicians had worked for
several months with Hugh Pidgeon of Ashridge Management College
to explore the factors that had helped make them a creative team.
This prolonged individual and group therapy session culminated in
the production of “The Gift,” which received its world debut at
Davos. The Gift combined short excerpts from many of the world’s
most famous music for string quartets with commentary from each
of the four on the unique balance of talent and personalities and
the interactions among them that contributed to their distinctive
sound and success over the last 30 years. I learned more about music
in that hour than I had in my whole life to that point. A video
of their performance, simulcast by broadband to schools throughout
the world with the Quartet available by email to answer questions,
might be the most lasting contribution to elearning that the 2001
WEF meeting could make.
David
Finegold is an Associate Research Professor at the Center for Effective Organizations.
He is the author or editor of many articles and books on topics
ranging from the changing employment relationship and international
comparisons of skill development to corporate governance and high-skill
ecosystems. These include: The
German Skills Machine: Sustaining Comparative Advantage in a Global
Economy,Are Skills the Answer?, Net-Enabled: Designing Organizations for the Internet
Economy and Corporate Boards: Adding Value at the Top.
DF2-052908MC
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