Irving Wladawsky-Berger

The 20th Anniversary of Linux

In mid-August I traveled to Vancouver to attend LinuxCon, the industry’s premier Linux conference.  The conference is organized by the Linux Foundation, which is the nonprofit consortium dedicated to fostering the growth of Linux.

This year marks the 20th anniversary of Linux, which made the conference particularly special.  Most of the keynotes reflected on the impact of Linux on the computer industry and on society in general.  A number of additional activities were also planned to celebrate this important milestone.

The history of Linux was summarized in this charming three and a half minute video:
 
“ . . . It was August of 1991, and a 20 year old computer science student named Linus Torvald sat down at his computer in Helsinki to post what is now one of the most famous entries in computer history: ‘Hello everybody out there, I am doing a free operating system, just a hobby, won’t be anything big and professional like gnu, it probably will never support anything other than AT-hard disks, as that is all I have’ . . . word of the Linux open source project quickly spread around the globe . . . Linus named his OS kernel Linux, and chose a penguin as a mascot after a little incident at the zoo.” 

“He soon made a very important decision that would shape Linux’s future just as much as the technology.  He chose the GPL license created by a visionary named Richard Stallman.  The Linux kernel, along with the GPL license and other GNU components revolutionized the computer industry with a few very simple, yet very important freedoms:  the freedom to use the software for any purpose; the freedom to change the software to suit your needs; the freedom to share the software with your friends and neighbors; and the freedom to change the changes you make. . .”

 . . . and the rest is history.

Job Creation and America's Future

This past June, the McKinsey Global Institute published one of the most comprehensive reports I have seen on the high unemployment and jobless recovery the US has been going through for the past few years - An Economy that Works: Job Creation and America’s Future.  The report is based on a McKinsey research study that surveyed 2,000 business leaders, conducted detail interviews with a number of human resource executives, examined in depth those sectors of the economy with the highest potential for growth, developed a number of detail scenarios for how the US employment picture might evolve into the future, and made several concrete recommendations on what the country should do to address our very serious unemployment issues.

Right at the beginning the report hits us in the face with a few statistics highlighted in big text that succinctly capture the job picture in 2011: US jobs have declined by 7 million since December 2007; 20% of men are not working today, up from 7% in 1970; there has been a 23% drop in new business creation since 2007; the jobless recovery is projected to last 60 months; 10% of Americans move annually, down from 20% in 1985.

The very next page uses the same big text format to summarize the very tough challenges the country faces: we need 21 million jobs by 2020 to return to full employment, - that is, to return to the 5% pre-recession unemployment level instead of the current level of over 9%; the job-growth scenarios modeled by McKinsey ranged from 9.3 to 22.5 million, so only their most optimistic high growth scenario gets us back to full employment; in 2020, there will likely be a 1.5 million shortage of college graduates in the workforce; even today, 40% of companies have had job openings for six months that they have not been able to fill due to lack of the proper skills; and 58% of employers said that they will hire more temporary and part-time workers.

“The United States faces an immediate challenge:,” the executive summary starts out saying, “finding employment for 7 million people still out of work from the 2008–09 recession and reviving robust job creation in the decade to come.  But simply employing a nation’s people is not enough. In a globalized, information-age economy, there is no more important economic priority than building a strong workforce.”

Innovation and Entrepreneurship in Large Metropolitan Areas

For several years now I have been thinking about the differences between various models of innovation and entrepreneurship.  In particular, I have been trying to understand the key differences between the innovation and entrepreneurship models that have worked so well in Silicon Valley, the Boston-Cambridge area and similar high-tech, VC-based regions, and the models that might be more applicable to large metropolitan areas like New York and London.

The Silicon Valley model has become the most prominent example of what it means to be a successful innovation hub.   Over the last few decades, it has been the leading region in the creation of new high-tech products and companies based on advanced digital technologies.  A number of regions around the world have tried to become the next Silicon Valley, hoping to develop the right ecosystem mixture, - including technologists, entrepreneurs, venture capitalists, - that will establish their region as a world class center of innovation.  Most such efforts have fallen short of their goals, - a number ending in outright failure. 

Why is that?  To begin with, most successful high-tech innovation hubs have been built around the great engineering universities in their midst - Stanford and UC Berkeley for Silicon Valley, and MIT for the Boston area.  Over the years, these regions have brought together and carefully nurtured a large and fluid community of technologists and, entrepreneurs who share ideas as they move from company to company - as founders, employees, managers, board members or investors.  They have achieved a remarkable network effect particularly suitable for high-tech innovation that give them an advantage in scale that is almost impossible to replicate.

Their university-based, high tech innovation model is particularly oriented toward finding The Next Big Thing, - that is, the next big technology, product or service that will take world markets by storm, transform whole industries, and in the process, create considerable wealth for their creators and investors.  They have been at the center of several waves of disruptive innovations and creative destruction over the past few decades, and will continue to do so into the future.

But, beyond a few niche areas, this is not a model of innovation and entrepreneurship generally suitable for a large metropolitan region like New York.  A model that would work for New York has to leverage the key strengths of the region.  Let me briefly discuss three such New York strengths in particular.

Job Creation and Entrepreneurship

The debt ceiling crisis was further evidence of the highly polarized state of US politics.  But, even as our federal government borders on the dysfunctional, one of the few areas where most everyone agrees, - politicians and citizens alike, - is that addressing our prolonged rate of high unemployment must be one of the nation’s highest priorities. 

An August 5 NY Times article reported the results of a recently concluded poll and observed:

“The debate over raising the debt ceiling, which brought the nation to the brink of default, has sent disapproval of Congress to its highest level on record [82%] and left most Americans [62%] saying that creating jobs should now take priority over cutting spending, according to the latest New York Times/CBS News Poll.”

Economists generally agree that our persistent high unemployment rate, - the longest such period since the Great Depression, - is primarily caused by a fundamental reshaping of the economy.  The US economy is undergoing structural changes driven to a large extent, by advances in information technologies, which have led to a resurgence in US labor productivity as well as to an increasingly integrated global economy.

Social Reputation in the Age of Globalization

Given my current university affiliations and teaching responsibilities, I spend quite a bit of time thinking how we should best train future leaders to help prepare them for the complex, volatile and unpredictable environments that they must learn to navigate.  Before the Internet brought the world much closer together, change propagated relatively slowly and often became attenuated and lost intensity before reaching other parts of a business and the economies and societies in which it operates.  Not so today.  In our increasingly integrated world, change now propagates much faster, and its impact will often lead to unexpected serious problems that a company’s leaders have to learn to deal with.

My own personal experience has been primarily with the impact of disruptive technologies and innovations on business.  Thus, my seminars and courses have generally focused on the management of technology-based business transformation, the transition to an information-intensive, knowledge-based economy and related areas.  But, beyond my core interests at the intersection of technology, management and complex systems, I have been thinking quite a bit about the central role of trust and reputation now plays, especially for highly visible global companies that are leaders in their industry.

Regardless of how it eventually comes out, the ongoing News Corporation scandal is a real time case study of the importance of trust and reputation to a powerful global company.  As we now know, for the last few years, employees of the British tabloid News of the World have been accused of hacking into the phones of celebrities, politicians and members of the British Royal Family in the pursuit of juicy, exclusive stories.  They have also been accused of bribing members of London’s Metropolitan Police Service. 

Few paid much attention to these allegations.  But then, the scandal went viral seemingly overnight and reached its current critical stage when early in July of 2011 it was revealed that the hacking extended to the phones of ordinary citizens, including a murdered school girl, relatives of deceased British soldiers and victims of the London bombings of July 7, 2005.  These latest revelations resulted in a public outcry in the UK against the News Corporation, its chairman and CEO Rupert Murdoch and other senior executives of the company.