Irving Wladawsky-Berger

Can New York Remain the World's Media Capital?

Over the past two years, SUNY’s Levin Institute hosted a series of panel discussions to explore the state of innovation in New York City.  Innovate New York - Envisioning an Inventive City was jointly sponsored by the Levin Institute, the New York Academy of Sciences and the Sloan Foundation.  Its basic premise was:

“New York is a global city, a diverse blend of culture, vitality, and extraordinary talent.  But the wealth of science and technology talent and innovation is less apparent, at least in the form of a thriving technology economy.”  The Innovate New York series aimed to discuss “where New York stands relative to its competitors, and to identify approaches that could capitalize on New York's strengths, shore up its weaknesses, and plant it firmly on the map as a capital of innovation.”  Panel discussions were held in a variety of areas, including finance, media, services, life sciences, arts, and culture.

I personally participated in a couple of the panel discussions, and in my role as Senior Fellow at the Levin Institute, was involved in helping to organize the series. 

The Sloan Foundation has agreed to renew its sponsorship of Innovate New York, this time focused on one industry, - media and communications, - which will enable us to explore the topic in considerable more depth.

The Limits of Strategy

When I look back upon my long career, one of the major factors shaping my views of business, strategy and innovation is the creative destruction that I saw buffeting the IT industry over most of that time.  In particular, having lived through IBM’s own near-death experience, respect - if not fear - for the hurricane-power forces of disruptive change is edged deep down in my psyche.

Why were so many companies in the IT industry done in by such disruptive technology and market changes?  Is it that in spite of all their efforts in strategy formulation, their management was unable to anticipate them and were caught by surprise?  Or it is that, as if actors in a kind of Greek tragedy, they see the changes coming and understand what needs to be done, but are somehow unable to make the needed strategy and cultural transformations?

Nobody has captured the drama that so many IT companies and their leaders went through from 1975 to 2000 like Ernest von Simson in his recently published book The Limits of Strategy: Lessons in Leadership from the Computer Industry.   

With his partner and wife, Naomi Seligman, Ernie founded The Research Board (RB) in the mid 1970s, an IT strategy think tank whose invitation-only membership was limited to the top chief information officers of the largest companies around the world.  Members voted on the top topics they were interested in, and the RB then conducted their research, interviewed top IT company executives as well as other experts, invited them to address their meetings, and then produced a private report available only to their members.

Reinventing Relationships

On September 16, I will join the IBM Lotus team in an event in New York City - Reinventing Relationships.  The event will explore how the Web, collaboration and social software "will transform - actually reinvent - how organizations relate to their customers, partners, employees and citizens through more compelling experiences.”

Once upon a time, new technologies were first deployed in large institutions - enterprises, universities and research labs, the military and civilian government agencies, - from which they eventually trickled down to the rest of the economy as their prices and complexity dropped.  Forty years ago, for example, the computer industry consisted primarily of expensive mainframes and supercomputers that only larger institutions could afford to buy and operate.

But, this trickle-down approach to technology diffusion dramatically reversed itself with the advent of inexpensive technologies, especially digital technologies.  As a result of the incredible advances in digital components and personal computing over the past thirty years, many new innovations are first emerging in consumer markets and among communities of experimental users, from which they eventually trickle-up into the worlds of business and government applications.  Besides personal computing, we have seen such consumer and user-driven innovations in cellular and smartphones, game players, Linux, and perhaps most prominently, with all kinds of innovations around the Internet and World Wide Web.

The Urgent Need for Innovation in Job Creation

An August 7 New York Times article, Jobless and Staying that Way observed that the current period of high US unemployment - 9.5% percent as of July 2010, more than twice the unemployment rate around the same time three years ago - is the longest since the Great Depression: “Nearly half the 14.6 million unemployed have been out of work for more than six months, a level not seen since the Depression.”

In the past sixty years, we have had a number of ups and downs in the economy.  While unemployment goes up during the down periods, it does not last long.  Within a relatively short time the economy improves and unemployment rates start to go down once more, usually to a rate below 5%.  As a result, the American safety net has been built on the assumption that unemployment would be short term, unlike the more generous safety nets in most European countries, where unemployment is generally higher.

But our current downturn might be fundamentally different from the recessions of recent decades.  In addition to an economic downturn, we may be experiencing a fundamental reshaping of the economy, driven, at least in part, by advances in information technologies, which have led to a resurgence in US labor productivity as well as an increasingly integrated global economy.