Irving Wladawsky-Berger

Preparing Students for an Increasingly Complex Business World

Are engineering and management schools adequately preparing students for our fast-changing, highly complex business world?  Not quite, say a number of recent studies.  A good education should include soft as well as hard competencies.  Universities generally do a pretty good job when it comes to teaching hard skills, - engineering methods, technology, analytical tools, finance, marketing, and so on.  But they don’t do so well with the softer competencies, including communications, teamwork and systemic thinking. 

For example, a 2007 study on MBA education found significant gaps between the competencies companies are looking for, and what students are taught in business schools.  Companies generally want MBA graduates with good social skills who are good at leadership, communications, and innovation.  However, the students frequently complain that such skills will not get them the kinds of jobs they want, and they pressure the schools to offer them courses that are more functional, analytical and technical.  This particular study focused primarily on MBA programs, but similar skill gaps are likely to be found in engineering and other STEM programs. 

Three years ago, USC’s Annenberg School of Communications and Journalism embarked on the Third Space, a research project to better understand the nature of the so-called soft competencies companies are looking for, as well as the talent requirements not being adequately addressed by engineering and business schools.  The project’s initial findings were recently described in a working paper, The one-trillion dollar global talent gap: What it is and what we can do about it, by Ernest Wilson, Dean of the Annenberg School.

In its first phase, the study conducted face-to-face, in-depth conversations with 75 senior executives across companies in a broad range of industries, including automobile, banking consulting, consumer products and technology.  Online surveys were used to gather additional data.  A number of academic institutions were consulted as well.

The Science of Innovation

 “Innovation - identified by MIT economist and Nobel laureate Robert Solow as the driver of long-term, sustainable economic growth and prosperity - has been a hallmark of the Massachusetts Institute of Technology since its inception.”  Thus starts The MIT Innovation Initiative: Sustaining and Extending a Legacy of Innovation, the preliminary report of a yearlong effort to define the innovation needed to address some of the world’s most challenging problems.  Released earlier this month, the report was developed by the MIT Innovation Initiative, launched a year ago by MIT President Rafael Reif.

I found the report quite interesting, both because I’ve been closely involved with innovation activities through a great part of my career, and because since 2005 I’ve been affiliated with MIT.  Beyond MIT, the report should be of value to anyone interested in the growing importance of innovation to institutions, economies and societies around the world.

A decade ago I was part of the National Innovation Initiative, a major effort convened by the Council on Competitiveness to develop a US innovation agenda.  Its final report, - Innovate America: Thriving in a World of Challenge and Change, - was released in December of 2004.  The report did an excellent job in explaining the role innovation plays in US competitiveness.  It included more than 60 detailed recommendations in three major areas: talent, investment and infrastructure. 

Since then, technology has continued to make dramatic advances.  But for a variety of reasons, job creation, entrepreneurship and US global competitiveness, - the key measures of a thriving innovation economy, - have not fared so well.  A number of recent studies have observed that startup rates, - the nation’s job creative engine, -  have been declining across the country, especially since 2000.  And while US employment keeps improving, serious questions remain about the impact of the digital revolution on the job prospects and wages of a large fraction of the workforce.  In addition, the US is now in 10th place in R&D investments as a percentage of GDP among OECD nations, - having fallen from 2nd place in 1992.  Innovation remains a subject in need of serious attention, especially given the emergence of our highly complex and unpredictable digital economy.

Leveraging the Passions of Fans

On November 21 I participated in a Think & Do workshop at USC’s Annenberg Innovation Lab (AIL).  AIL was founded in 2010 as part of USC’s Annenberg School of Communications and Journalism to study the transformational impact of technology and cultural changes on the media industry.  I’ve been a member of AIL’s Advisory Board since its founding.

The Lab conducts research projects in a number of areas at the intersection of media and technology.  From time to time it hosts what it calls Think & Do events that bring together students, faculty members, research staff, industry executives, artists, entrepreneurs and policy makers to collaboratively explore new research ideas.  The topic for this particular workshop was Leveraging Engagement.  It was aimed at exploring new frameworks for fan engagement in a variety of media, including entertainment, music and sports.

Like few others, the media industries have been severely disrupted by the digital revolution and the forces of creative destruction.  Everything seems to be changing at once, from the way content is produced and delivered, to the sources of revenue and profits.  One of the major changes is the relationship between the creators and distributors of media content and their audience, especially their most committed audience members or fans. 

What do we mean by fan?  The briefing book prepared for the workshop draws a distinction between an audience of relatively passive listeners/spectators and fans.  Fans are “enthusiastic followers or admirers… have a passion, are emotionally connected to the object of their passion, and experience their passion through their own subjective lens.” 

The Internet, smartphones and related technologies, are enabling fans to play a more central and active role in the evolving media ecosystem.  They are active participants in social networks.  They are critics, co-creators, and brand influences.  They are also potential consumers of all kinds of goods and services related to their passion.

The Vital Role of Research in Preserving the American Dream

This past September, the American Academy of Arts and Sciences released Restoring the Foundations: The Vital Role of Research in Preserving the American Dream, - a report on the state of US leadership in science and technology.  The report makes the case that over the past half-century, research-based scientific and technological advancements have been the main drivers of economic growth and job creation, and their impact will likely rise in our increasingly complex, knowledge-based society.  It further notes that since having a good job is one of the primary factors influencing quality of life and well-being, “research is the lifeblood of a high-tech economy and plays a critical role in the economic and personal well-being of most citizens.” 

A good job has long been the foundation of the American Dream, - the possibility that anyone can get ahead and achieve prosperity through talent and hard work regardless of social class or circumstances of birth.  But, the report warns that the American research enterprise, - and the American Dream, - are at a critical stage.  Federal support for basic research as a percentage of GDP has declined 13% over the past decade.  In 1992, the US had the second highest R&D investments as a percentage of GDP among OECD nations.  It has now fallen to 10th place.  While the US is losing some of its competitive edge, emerging nations are increasing their research investments in order to stimulate economic growth.  China is projected to outspend the US in R&D within the next 10 years. 

The Academy’s study was based on three basic premises: 

• “a strong U.S. economy is vital to the welfare and prosperity of the American people”; 
• “competitiveness in today’s accelerating high-tech, knowledge-based economy requires innovation and the rapid infusion of new knowledge and technologies”; and 
• “while applied research and applied development are both undeniably important, pathbreaking discoveries are most likely to come from basic research sustained over long periods of time, which is mainly funded by the federal government and carried out in the nation’s universities and national laboratories.”