Jack B. Smart
skirted the snow patches by the newsstand. It was 6:59 a.m. on January
2, 2009, the Canadian wind bit his face under a cloudy sky, but
he wanted to pick up his Journal.
He looked up at the Human Capital Journal building located in Arlington,
Virginia (to print the paper near Washington DC, the center of research
on learning, productivity, and the vast government education programs)
and smiled. Then he looked down and read today’s headline, “Human
Capital Reserve Board increases credits for technical skills development
for the 4th time by another 1000 basis points.”
As he read, he
reflected on how Dow Jones started this national paper (The Human Capital Journal) five years ago
when the workforce growth rate dropped to zero and panic began to
set in. True, the capital economy was growing again at a 3.5% GDP
rate, recovering from the Internet bubble burst of 2000. Federal
Reserve Chairman, Allan Greenspan, had observed, way back in 1999,
that major productivity increases that supported low inflation economic
growth were due largely to implementation of technology by businesses.
When the technology sector suffered, the whole economy slowed down,
causing stagnate growth and high inflation, resulting in a loss
of real income to workers and companies.
Few noticed sales
demand for high technology products starting to bottom out until
February 2002. In California’s Silicon Valley, the venture capital
community was just coming out of a severe pullback, where 20% of
the venture firms in business in 2000 had closed up shop by 2002.
With venture capital out of the picture, startup capital was difficult
if not impossible to come by, so companies had to bootstrap their
businesses, grow slowly by building customer sales and presenting
solid profitability paths before venture firms would even consider
funding them. Development occurred, but came slowly, as firms were
hesitant to add new staff. Yet, with the September 11, 2001 terrorist
attacks, people became hesitant to fly so they were more likely
to try online learning and conferencing. This event acted as a catalyst
for many prospective users to start using web based learning systems.
From here, the economy grew very slowly over the next few years
because of a global recession and heightened security impeding the
free flow of goods and services.
how surprised managers were in 2004 when they started to look for
new staffs. It seemed like there should have been plenty of qualified
staff to fill the slots. Yet, even before the Internet bubble burst
in 2000, hiring qualified networking people, in particular, was
nearly impossible and led to a no-growth economy for over a year.
Industry, government, and universities had not really understood
the coming shift in demographics. Baby Boomers did not have enough
children to keep the economy in a growth mode for the workforce.
Fewer children born 20 years ago meant a smaller workforce. So,
the shortage of 250,000 qualified computer, Internet, and telecom
workers just got worse. Product managers and technical sales people
were almost as much in short supply. In fact, without these qualified
staffs, technology companies began to report in 2005 that their
profits were going to be squeezed, revenues would fall short, and
they would not be able to deliver the products and services already
committed. The technology sector went into a tailspin and overall
U.S. economy productivity decreased. His company, Giant-Gargantuan-Grow,
Inc. (G-Cubed), had openings in his IT department. He
had to offer sign-on bonuses of $10K, 20% uplift from their present
salary, plus incentive stock options with accelerated vesting before
people would even consider coming on board.
By 2005, capital
investment in technology—to increase productivity—showed diminishing
returns. The productivity engine of the late 1990s, which propelled
the NASDAQ to hit 5100 in March of 2000, was over with a loss of
$12 Trillion dollars in the personal and corporate wealth. With
decline of the NASDAQ in 2001, people reflected on what real corporate
valuations were. The old technology-only driven productivity models
did not seem to work. Technology as the only solution, without engaging
people in learning, did not produce the cost-reduction and earnings
results that CEOs were looking for.
It was not until
summer 2005 that executives began to look hard into learning performance
management, and elearning corporations for the solutions to their
productivity problems. AT&T and Coca Cola established Chief
Performance Officer positions, and made them part of their Executive
Committees. Using corporate scorecard techniques, all learning investments
had to be cost- or ROI-justified and needed to have the complete
support of corporate stakeholders. Research went beyond Benchmarking,
but also used the corporate scorecard measures in terms of contribution
to earnings per share, revenue per employee, and return on equity
that Wall Street and corporate boards cared about.
By December of
2005, economic conditions grew worse. Average corporate profits
fell by 50%, layoffs began to be announced across many sectors,
and, as productivity investments lagged, gross domestic product
(GDP) growth turned negative. Internet chat room users called on
people to email the President and their Congressional representatives
to do something. After much debate in Congress, the Human Capital
Reserve Board (HCRB) was formed. They modeled this non-governmental
organization after the successful Federal Reserve Board. This Board
would be chartered with the responsibility of monitoring, on a monthly
basis, leading indicators of learning, performance, and personal
development growth, if any. The Human Capital Reserve Board, through
a network of member learning capital banks, would make low cost
loans available to corporations, universities, and non-profit organizations
to jump start their learning, performance, and development programs.
In particular, the Human Capital Reserve Board would monitor discontinuities
between available workers and severe shortages in workers to place
priorities on technology workers to get the economy going again.
The Human Capital Reserve Board, led by a Chairman appointed by
the President for a term of six years, had a board of rotating governors
from districts around the country that had responsibility for monitoring
and reporting monthly on learning, performance, and development
conditions in their districts. The initial Board was comprised of
the key performance leaders, President of the AT&T Corporate
University, President of the University of Maryland University College
(largest online University in the US), The Chief Performance Officer
of Coca Cola, the Deputy Secretary of Education for Technology,
and the President of University of Phoenix university system.
reports were called the Teal Books because they had teal colored
covers. They were valuable for all learning, and performance economists
to analyze workforce and learning conditions by region and learning
sector. The Teal Books tracked leading indicators: funding by corporations
of technical learning courses, number of workers certified in technical
fields, workers losing positions due to lack of skills, shortages
of skills and competencies as measured by jobs requiring those core
skills. The books also reported on the performance managers purchasing
index (purchases of learning objects, resources, and tools), and
trending of the local marketplace for jobs versus qualified workers
for those job types.
After the Federal
Reserve, the Human Capital Reserve Board had the second greatest
impact on the economy. Congress had marked $150B to the Board for
allocation in learning and performance credits, loans, and funding
for performance infrastructure development. As the needs of the
country changed monthly, the Board would decide at what interest
rate these loans would be available to member learning banks and
investment funds for learning infrastructure development available
through learning investment corporations. Corporations would apply
for these funds, available overnight, if they were a certified learning
organization based on standards that the Human Capital Reserve Board
had established. Corporations quickly began to see the advantage
of having a high performance, constantly learning workforce in place
to stay competitive. These loans were highly sought after, and a
market began to develop around the purchase of the low interest
learning funds versus the higher interest loans (much like we see
in mortgages and money market funds). Learning investment funds
(LIFs) soon became the newest Wall Street trend in trading and investments.
Options and futures markets developed, focused on the direction
of interest rates up or down, and established a future horizon and
a discount window on these investment instruments, backed by the
how, in the past, unqualified promoters of applied education started
schools, vocational colleges, and certificate programs with little
or no oversight. California alone had 2000 of these schools in existence,
but after four years as many as 80% of these applied education schools
closed their doors. After the Human Capital Reserve Board was established,
they required standards, funding, performance, and accreditation
requirements for these schools so people would know that the schools’
quality if they showed the HCRB seal. The schools were fully qualified
and would be there to provide reference information when employers
required necessary background degree or certificate information.
By 2007, as high
quality content became available over the Internet, the Learning
Object Exchange (LOE) was started by the Advanced Defense Learning
Network of the Department of Defense, major corporations like Microsoft,
Cisco, Hewlett Packard, AT&T, Motorola, Citibank, and Hewlett
Packard. The LOE was founded to meet their need for high quality
content and forced a major fallout of lesser quality content providers.
As learning became the new scarce commodity, the real currency of
value became learning objects and derivatives. There was much debate
about what a learning object actually was.
Finally, it became
pragmatic; the most granular form of learning object was called
the meme. Popularized
by MemeStream, a meme is the smallest form of learning instructional information.
It could be a tip, a one phrase insight, or a paragraph containing
the unique perspective that gives the learner an ‘ahaaa’ feeling
of illumination on a life experience. The Human Capital Reserve
Board was asked to regulate the LOE, as millions of learning objects
were exchanged weekly, changing the landscape of the learning and
performance industry. There were no quality standards, and it was
necessary to have rules for an orderly market of exchange of these
objects. Quote systems were developed showing best bids and offers.
A separate unit of the Human Capital Reserve Board, in partnership
with the LOE, founded a non-profit institute called the Learning
Quality Foundation (HQF), which developed standards and yardsticks
for evaluating the quality of content rated AAA down to a level
of -BBB for junk grade learning content. The rating system helped
buyers know the quality of the learning investment they were purchasing.
No longer was learning the domain of a few instructional designers
or professors. High quality content was available at inexpensive
prices for immediate download, as were whole curriculums, certification
programs, and template models on building sound instructional materials.
Another thing happened. Informal learning, which was discovered
in the 1990s as over 80% of all learning in corporations and even
more from a life experience perspective, could now be supported
with high quality content, graded quality, and easy access.
This market in
learning objects supported new applications. Line managers could
now go to their performance dashboard client systems and enter the
goals for performance, skills development, and competencies. A list
of recommended learning objects, resources, and mentors would be
displayed—true learning management on demand. And individual employees
could use the same type of dashboard, where they often would interact
and establish rules for system agents to find the right object and
negotiate its price, pay for it, and display it on the browser,
palm device or display wherever the employee may be.
By this time,
the Spohrer’s World Board concept was well accepted. The World Board
concept proposed that sensors be placed in strategic learning areas
in cities and countryside, special receivers on handhelds or glasses
displays would send GPS information to satellites above and make
known the learners’ interests. They would receive information about
what they were seeing from an historic place like Mount Vernon (George
Washington’s home) to looking at a building’s front doors and seeing
a directory of businesses located there, with abstracts of the companies,
their services or other requested information. Jack remembered how
excited he was about accessing this information and being able to
copy, paste, and file it into his own database according to index
labels he understood for later retrieval. The newly acquired information
could be hung on concept hangers in a mental map that the learner
developed himself to survive and grow in society. (Actually iterative
learning was discovered by Eileen Kintsch in the 1980s to be the
way experts navigated content, and not having to wade through it
sequentially.) People could now be masters of their own learning
development process. Learning productivity took a leap, as indeed
it needed to.
By the fall of
2008, the EdIndex, started in 2001 by EdAnalysis, Inc., showed a
jump of 20% in learning corporate stocks compared to 2007, as Wall
Street began to see the learning, performance, and human capital
markets as the new hot space for the next decade, starting in 2010.
The major brokerage firms assigned senior analysts, and Learning
Valley analyst tours were put together throughout the Potomac River
valley region, where many of the key learning performance firms
on all the false starts for the industry during the Internet Bubble
of 1995–2000, then the real work and development stage for five
years afterward. Finally, the big shift in the fall of 2008. It
was good to be here, in this place now, at the birth of an industry
that was making such a significant contribution to the U.S. economy,
and had become a key column of support in the building of wealth.
He wondered when
the next Human Capital Reserve Board move would be made. Analysts
were already starting to speculate on when the next learning capital
credit rate cut would take place, and the boost that would give
the stock markets.
Just then, Jack
saw the sun peek out over the edge of the HCJ building, and felt
the warmth on his cheek.
Hill is program leader of a team at the Education and Training Center
for the Nonstop (Tandem) Division of Compaq focused on the development
of advanced learning technologies for intraweb and Internet applications.
He started a 20 company coalition on learning object metadata standards
prior to IMS and the ADL programs in 1996, was a founder of the
Educational Object Economy project,
and holds a Masters in Interactive Learning Technology from Stanford
University. Hill can be reached via email at: firstname.lastname@example.org.
opinions, ideas, concepts, and products mentioned in this article
do not reflect the policies, programs, or ideas of Compaq Computer Corporation.
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