Innovation II: Skill gaps and the nature of the disruptive technology

One thing that was fairly obvious to me in yesterday’s seminar, was that everyone recognizes that innovation – probably both incremental and disruptive – will destroy one kind of jobs (simplified: the old ones). This creates a skill gap that then needs to be bridged. This was not in my model yesterday, but it sort of determines the length of A, I think. Anyway, the other thing might be more interesting. A persistent example used in the debate was the Swedish shipyard industry that was the victim of a wave of innovation. The skills gap – and some of the innovation was not only skills based, it was an innovation in organizing cost structures, i.e. outsourcing – was around shipyards and how they work (and where they work). But the innovation targeted a sector in that case, and even though the State subsidized heavily, all the jobs disappeared.

Here is the rub, though. Information technology changes not just one industry, but information processing in all industries. And on of the largest information processing industries is the public sector. So not only do governments have to withstand the lobbying of incumbents, they will find themselves being an incumbent. The re-organization and need for structural shift in the public sector needs to happen at the same time as the restructuring of industry. Healthcare, education, law enforcement — all of these are now being re-invented in a sense. The government, or parts of it, is the new shipyard industry, if you will. We know that the productivity gains (and new innovation) from investments in tech depend on organizing around the new technology and not using it as a carpenter would use a slightly better hammer. The hypothesis then becomes: we need new models of governance to reflect the shifting technological mode of production.

Anders Flodstrom also said something that really resonated with me. He pointed out that skills gap in general depend on the inertia in the education you are given as well as the inertia in when you are given it. We educate for specialist positions, we might even see vocational schools as a way to retrain people, but what we ultimately need is education that creates fluid competence on a broad scale. One participant suggest a revival of the trivium, what the Educated Man knew in the Middle Ages, and it is not a bad idea. If school produced Educated Women and Men we could leave to industry to assume the costs of organizing education so that it fits its current needs. In the OECD innovation strategy and the EU Innovation Union there are calls for industry to involve itself in the design of curriculae, but that is of course the wrong way to go: allocate the costs of tailoring competence to where they are most likely to be lowest. Who has the knowledge to make the right decision? A committee? Hardly. The actual employers? Why not. As an aside I think the problem with this is that employers have started at the low end with what in Sweden is called disciple systems. If industry was the only place to get a really good third tier education, i.e. doctorates et cetera, and competed with universities for that competence, well, that would at least be an interesting thought-experiment. (Though the obvious comeback is that the structure of democracy depends on the education we collectively decide on providing, but that is where I think the trivium could be even more powerful. Just think about it, what if everyone that left high school understood the difference between correlation and causation, I mean…)

More on this later.

8 thoughts on “Innovation II: Skill gaps and the nature of the disruptive technology”

  1. Don’t be so sure about innovation killing the simple tasks.

    It might be that innovation will do away with many required ‘skills’ that are today considered relatively sophisticated but leave a large amount of ‘simple’ tasks unaffected.

  2. This is one reason why open educational content is so interesting to me in period A- it allows us to de-couple pedagogy and incumbent interests.

    I think of it (perhaps crudely) as analogous to the Microsoft/Linux security debates. It’s argued that Linux can provide better security because it is capable of incremental, granular security fixes *developed by anyone who cares*. With Microsoft, you might have to wait for months for them code and release a patch.

    With open education, anyone can commit a “patch” to the educational process.

  3. The nature of disruptive technology is that it is not as good as the old tech, at what the old tech was good at. The new is good at something new, or else we would only be talking about incremental development of the old.

    A better example would have been Facit, not the shipyard industry since the fall of that had a lot more aspects than just technology. It was just as much about globalisation and politics. We just have to go east to finland, their shipyard industry did not die as ours did. The fall of Facit on the other hand, that was about disruptive technology.

    Facit did understand both the threat and the possibility of the electronics, _very_ early too. They started cooperations with exactly the right partners in electronics and so on. Facit did even, under a short period, produce mainframe computers that was regarded as the best in world. But short thereafter they closed down most things electronic and put all their energy in producing mechanical calculators. Why?

    Quite simple actually. They just went and asked their customers, their old long time stable big customers, they did not want mini calculators, those did not even have a paper roll.. and the demand for computers was even less, among their _old_ customers, those that pay their bills. Some years later 10K people got laid off.

    Hasselblad did the same in year 2000 when they closed down their electronic department that once actually led the development in digital imaging (made impressive headlines at the olympics in 1984, with digital equipment to send images across the globe). Hasselblad listened on their customers, they did not want expensive toy cameras with really crappy image quality. Yes, in 2000 digital cameras was expensive and really crappy toys compared to Hasselblad. So why produce things that their customers do not ask for? A couple of years later Hasselblad was on the verge of going bankrupt.

    And please, do not mix up knowledge with education, it is not the same. Unresponsible people do always mix this up, on purpose if necessary. They do not dare to take the responsibility it takes to judge knowledge, even if it is obvious, they demand education to have a paper to excuse them self over – but he/she was educated, i did nothing wrong.. Just like when someone tries to weasel out of responsibility by saying: But i was just following order..

    Also remember that any education is inherently old knowledge, please do not mix up education with science either. This is especially important when talking about disruptive technology, because one more nature of it is that it is new, and schools are many times even older than its teachers. But things like this do have a lot mental blocks around them. Any one who have made sacrifices, need to mentally find justification. The same goes for most things we do. Se these aspects kicks in both at the teacher and the pupil. Criticize the expensive luxury car that some middle class guy just bought for his life savings, and you risk getting his fist in your face. Criticize the same car that a millionaire bought and he might even get curious. To change anything in the school system, risk sending both teachers and former pupils into system justification.

  4. Swedish shipyards had a problem because of competition from Polish and Korean shipyards. But Swedish libraries and lawyers don’t feel any competition from Poland or Korea. They don’t even feel the competition from the library or lawyer in the neighbor city, because their users don’t shop around. So I think your idea of governments as threatened incumbents needs some more thinking.

  5. Libraries today have competition from e-libraries that make the books available on the net.

    Borders recently went into default because of competition from Amazon and other Internet bookshops and e-books.

    So any market dealing in information are today or tomorrow going through a change. The number of librarians will diminish greatly as we go from libraries being physical to a site on the net. Instead of having a library in every city we can go to having one for each language and in the end when the whole world speak the same language – we will move towards a world where the optimal number of libraries will be very small – maybe even just one single library on the whole earth.

    EU shows that goverments is going the same way, larger parts of the earth will be controlled by a single legislative body. IT makes it easier to control a larger area today because it dont take months for messages to travel from one part of europe and back. Today that takes seconds – EU could not have been formed without todays instant communicate. Noone is more then a phone call away.

  6. “Den 1 mars 2009 var 5 680 personer anställda vid folkbiblioteken (2008: 5 795).” enligt kulturrådet. När kommer den stora minskningen, Anders? Nätet tar kanske bort läsare från de fysiska biblioteken, men det inverkar inte på deras budget. Har antalet jurister minskat nu när IT erbjuder effektivare arbetsredskap åt dem?

  7. Computer var en gång i tiden namnet på ett yrke – en person som räknade. De är idag ersatta av andra. Samma gäller t.ex. juristteam som sysslade med informationssökning de ersätts av datorer.

    Samma kommer förmodligen ske med många av de bibliotekarier som hanterar utlåning och urval av litteratur till biblioteket. Yrket försvinner inte helt – men många enkla arbetsmoment försvinner när biblioteken inte längre behöver syssla med utlåning av fysiska böcker vilket leder till att färre behövs inom biblioteken. Hur lång det tar kan jag inte sia om men branscher utan riktig konkurrens brukar ta lång tid att förändra.

  8. Att något “tar lång tid” att förändra är detsamma som att det står still. Varvs- och tekoindustrierna stod inte still, utan påverkades direkt av priskonkurrensen. Om varvsindustrin hade “tagit lång tid” att förändra, så hade den funnits kvar idag och Lindholmen hade varit full av varvsindustri i stället för Chalmers nybygge.

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