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Coming Ready or Not

By Gavin Brown - posted Monday, 3 January 2000


In the period 1982-89, there were 37 IT patents lodged in the US from Australia, 53 from Israel, 1 from Singapore, 24 from South Korea. In the period 1992-96 these numbers changed as follows: Australia 80, Israel 258, Singapore 82 and South Korea 1629.

In April and May of this year, Deloitte, Touche, Tohmatsu carried out a survey on behalf of the Australian Information Industry Association. They interrogated all leading suppliers of IT&T products and services as well as major users. Responses were received from organizations employing a total of one quarter of a million people, of whom 55,000 were IT&T specialists.

The survey predicts that next year’s demand for skilled workers will be an increase of 29,700, the next two years a further 58,000 and the next two years a further 81,800. The total predicted increase for the next five years is 50% greater than the total of all Australian university graduates for last year. When I say graduate here, I mean graduate in anything – arts, theology, veterinary science or even computing.

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Let me make things worse! The Knowledge Economy is not only about IT as such, it concerns the value-adding activity of a well-educated populace. Soft skills in philosophy, literature and classics or hard skills in engineering, chemistry or molecular biology, and preferably these combined, will also determine our success in the Knowledge Economy. Accordingly, we cannot contemplate a huge swing of our resources to the IT area alone. Note my implicit assumption that the Knowledge Economy is chiefly about people. No matter how we try to analyze background issues, we will always return to that point.

There appear to be two ways in which a country can gain competitive advantage in the modern global knowledge economy. The first is through innovation and the second is by being a very fast follower. In both cases time is of the essence and remember the words of Royal Dutch Shell’s planner "the ability to learn faster than your competitors may be the only sustainable competitive advantage". For a multi-national, that means having access to skilled personnel wherever in the world they may be located. What makes a good site? One suspects a culture of invention, an excellent education system and a favourable tax and wage system. In Australia we have the first of these three. If one takes software technology as the benchmark, then the favoured locations are Israel, Ireland and India. In saying that I am relying on the research underpinning the document Going Global, which is a report prepared by the US Council on Competitiveness. That group is a non-partisan forum of 161 corporate chief executives, university president and labour leaders. One of the organisation’s co-chairs, William R Hambrecht, states:

"The competitive challenge for the future is likely to come not just from low-cost producers but from low-cost innovators. Because the innovator club is growing, the United States must look to the fundamentals to sustain a competitive environment: support for basic research creates the seed-corn for innovation, an assured talent pool and the legal, regulatory and accounting rules that can incent (or impede) industry investment in innovation".

The United States government is substantially increasing money for basic research, so is the UK, Sweden, Korea, Singapore. In Australia our research green paper is a zero-sum game in which it is proposed to transfer money away from basic research. Judging by this morning’s Australian, the main debate on the paper concerns protection of regional institutions like Charles Sturt or fledgling ones like the University of Western Sydney. There is a very real danger that, as a nation, we are simply afraid to contemplate the big picture.

Let me give you some more figures from the Going Global report. In what I must admit was their subjective rating of a country’s capacity for health care innovation, the Americans used three criteria: biomedical research base, entrepreneurial climate and public awareness and support. They produced the following ratings: Singapore 4.05, Japan 3.21, India 2.01 and Australia 2.00.

Remember that this is now a global economy where firms can move investment at will, chasing favourable environments for their research and development. Surely we must develop our policy in order to achieve the most effective outcomes and to set in place the most attractive infrastructure. Instead there is an obsession with equity across institutions, with the level playing field – or level minefield, as I think of it in my worst moments. Before I leave this point, let me put some dimensions on the problem. In the latest round of Australian Research Council Large grants (so-called), the University of Sydney won more than 22% above its nearest competitor, Melbourne, and 36% more than UNSW. Much more to the point, the entire Australian Technology Network, a vociferous lobby group comprising RMIT, UTS, QUT, Curtin and the University of South Australia, amassed a grand total less than Macquarie University, which, in turn, won less than a third of our total. In determining AVCC’s research funding policy, the University of Canberra, with no new grants this year, has an equal vote with me.

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Believe it or not, I am a strong advocate of cooperation within the sector. We now have the AGSM as a joint venture with UNSW, the Australian Technology Park as a joint venture with UTS and UNSW, the Centre for the Mind as a joint venture with ANU and, announced recently, a new Centre for Gene Function Analysis with UNSW, Macquarie and Newcastle as our partners. The real challenge is to strike the correct balance between competition and cooperation, and, of course, lowest common denominator is no basis for the latter.

Let us turn to the most important part of infrastructure provision – training of personnel. Given that I have already noted that the needs of the Knowledge Economy are wider, let me first concentrate on the provision of IT specialists. This is a world wide problem and that, of course, is bad news for us in a global economy.

It is easier to define problems than to suggest solutions. Let’s try both – first the long part, the description of the problems!

In Australia we produce far too few graduates in IT&T. For the most part, those graduates we do produce are well-regarded, but that is a problem in itself because they are often recruited to work overseas. Some people have suggested some form of financial disincentive (increased HECS being due on leaving the country and reciprocal treaties with other countries). Roger Buckridge, the venture capital provider, expressed the opposite view at an Amdahl forum yesterday and I agree with him. He believes we should train more people, expect a brain-drain, but count on many of these expatriates returning in due course or sending back money to families. At the same time we should aggressively recruit highly qualified immigrants from other countries.

The capacity of universities to train good people is reduced across the board because of significant per capita cuts in funding coupled with political timidity which does not permit necessary deregulation. That means, for example, that my university, with 35,000 students and an annual income of $Aust 630 million, must compete with UCLA with $US 2.2 billion to service 27,000 students. That implies an adverse ratio of more than 1:7. Think what we could do if that even improved to 1:4, and we are working on it. Please give generously.

In the particular field of IT&T, matters are much worse because our graduates get offered more than the lecturers who teach them. How do we find incentives to retain good staff? The industry eats itself. Sometimes where there is a particular training need, the industry will provide supplementary funds for a position. This usually happens when the need is so acute there is nobody available to recruit to the position! A possible partial solution might be achieved by looking to the more ancient professions. In Medicine and Dentistry, for example, practitioners give back to their training schools by providing their services as teachers and mentors either at no cost or below cost. At the risk of being mugged by a nerd I have to say that the computer industry seems to have the spirituality of teenage pirates – not entirely surprising when some of the ablest practitioners are teenage pirates seeking a tree-house as big as Bill Gates’?

An area of training where my university is on its own learning curve, concerns delivery of professional upgrade material, partially or fully in the workplace. This is obviously necessary. In the 1950s typical job tenure was 22 years, by the 1970s it was down to 7 years, and US Department of Labor statistics give three years for the 1990s. Moreover the changeover is employee driven.

That situation has lead, inter alia, to the phenomenon of the Corporate University – Motorola, McDonalds, Ford, Petronas and so on. This could be seen as a threat to traditional universities.

One response is to enter the territory ourselves. At the centenary birthday of Peking University, Willem Wagenaar, Rector of Leiden, warned against this and he used a particularly striking metaphor. He noted that student access is increasing enormously and the cost of research is escalating so that very specific applied work for clients is taking over. His broad conclusion is that universities and their societies are converging so that tertiary institutions no longer inhabit arcane sacred groves. He says, "the embracement of universities by society will be like a sweaty pliable pillow in which we slowly suffocate."

On the other hand we could stand aloof as the corporate universities provide much of the learning and certainly the retraining needs of society. That would merely change the definition of university in a different way.

Let me return to the wider training function of universities, the development of soft skills, an area where John Stuckey sees a deficiency in Australia. I am a very firm believer that the traditional campus-based experience is fundamental to this. Appropriate qualities are acquired through sport, debating, drama and the many other valuable activities which take place outside the classroom. That learning environment can never be replaced by net access.

I was explicitly asked to provide some case studies in education and training. Let me discuss two. The first is incomplete and I have my fingers crossed concerning the eventual outcome. It flows on naturally from the discussion of soft skills and the campus environment, because two years ago, after much discussion with the corporate sector, we introduced a new degree in liberal studies. "Soft" has a special meaning here because the course is restricted to high achievers and demands both a language together with other humane studies and quantitative science. There is a glue of informatics, with a mathematical base, linking these.

As soon as we offered the program, demand outstripped supply and to keep faith with potential students we had to double the quota from 50 to 100. This led to no slackening in entry standards so we had to increase numbers again this year.

Why am I nervous? Employers will not have an opportunity to recruit the graduates until 2001. Will the degree be as exciting to them? The reason for a slight frisson is my experience that I discuss these matters with CEOs who are committed to recruiting outstanding well-rounded students with generic and adaptable skills. The same CEOs however, are perfectly capable of devolving recruitment to a junior employee who is primarily conscious that the company has immediate need of a widget tharkler. Nevertheless, these students of ours are so good, that I predict you will fall over each other to snare them.

The other case study is our Graduate Medical Program (GMP). The motivation is soft and people-oriented, of course. We determined that some maturity and experience should precede the decision to become a medical practitioner and so we set about designing a somewhat shorter problem-based program to train graduates from any feeder discipline.

This was also a great opportunity to embed IT in a fundamental way. The notion is not that IT enhances or drives the show but rather that there is a total integration of IT so that graduates will continue to operate in that environment in the future – and we are sure that medical diagnosis and much more will be web-based in their working lifetimes.

We had two particular challenges. The first was to recruit computing personnel. The successful secret here was to bypass the ultimate techo with high skills and low communication ability in favour of those with an acceptable skills base allied to a capacity for human interaction with non-experts. As a mathematician I can see no need for this at all and have no idea why it worked! The second challenge was to transfer knowledge from our medical staff to the net-based packages. Here it proved important to keep our medical people within their comfort zone as regards information technology and to rely on computer technicians to give realisation (virtual realisation, I suppose) to their thoughts and ideas. Of course, the IT skills base of our medics expanded enormously as a result, but that was not a prerequisite and was never an imposition.

The program is hugely successful – already used under license overseas—with many potential users around the world. It was enormously expensive in staff energy and financial resources, but it also generated great staff commitment. It is a fascinating case study of a change management process which had almost everybody clambering on board with enthusiasm and vigour.

Perhaps I can hang one final thought on that example. In many situations we have to recruit IT support staff to service the overall operations of the University. We are obliged by budget constraints to be a relatively low wage employer. Accordingly we like to recruit raw talent and use their jobs as a training ground. When we have trained them somebody else pays a premium and hires them. Provided this is an ongoing dynamic process it is a perfectly acceptable way to be. Given the realistic estimates of training needs, many of you may need to follow suit.

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About the Author

Professor Gavin Brown, a mathematician, is Vice- Chancellor and Principal of the University of Sydney.

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