The Rapid Pace of InfoTech Change is Creating a Skills Gap

The rapid pace of technological change is contributing to the stubborn unemployment rate. This comes from Erik Brynjolfsson, director of MIT's Center for Digital Business and one of the foremost researchers on the factors that contribute to - or detract from - computer productivity.

The problem is that new technologies build on each other. Those not conversant with the latest developments fall further behind as the digital leapfrogging requires greater concentration in specific fields or tasks. To some extent, managers then use the skills shortage as a reason to rely even more heavily on technology itself or on outsourcing to organizations that make their living from charting and contributing to this pace of change.

Organizational dysfunction is another manifestation of this issue. Businesses and government agencies find it hard to change due to political pressure (small and large P)not to disrupt existing relationships and hierarchies. This is self-defeating because the resulting stasis stimulates further demand for change, often of a more cataclysmic nature than that which might have been engineered by a thoughtful, internally sponsored process.

The pending failure of Knight Trading, a New York area based securities trading and brokerage firm, whose problems surfaced this first week of August appears due primarily to the installation of new technology. That installation was designed to make the firm faster and better able to compete with larger firms - but it was done without the requisite analysis of what it might mean for the company's processes, capabilities and people.

The implication is that new technologies require new skills and new ways of organizing around both the technology and the skills it inspires. Without thinking holistically, system will break under the weight of structures that failed to match accumulated expectations. JL

Ashdown Group reports (hat tip Erik Brynjolfsson):

Technology is racing ahead faster than ever before, making it difficult for professional expertise to keep up.

Erik Brynjolfsson, director of the MIT Center for Digital Business and co-author of 'Race Against The Machine', explained that IT inventions are building upon each other.
He said that when companies and individuals make innovations, they do not use up the stock of innovations the way people may use physical resources.

Mr Brynjolfsson noted that innovations build on each other, leading to a rapid pace of change.

"When you combine innovations, you get a third innovation. This happened centuries ago with electricity and pumps and you got air conditioning, refrigeration, and new technologies," he stated.

"Today, the components of this innovation are digital and it makes it that much easier to combine and re-combine and create new things."

Mr Brynjolfsson said that technology is racing ahead, but our skills, organisations and culture are not able to keep up.

"As a consequence, there is a bigger and bigger gap between what the technologies can and are doing and what our skills and organisations are," he claimed.

This skills gap is leading to a lot of disruptions, and causing job losses and falling wages, Mr Brynjolfsson suggested.

"I think it is going to lead to more and more discourse as we get this growing disconnect between technological capabilities and our own skills and organisations," he added.

In a recent interview with Computer Weekly, John Harris, chair of The Corporate IT Forum, claimed that years of IT outsourcing have taken their toll on skill levels within the sector.

"While outsourcing did bring value, people moved jobs that should not have been moved. We outsourced our skills pipeline," he claimed.

"It is important to feed the pipeline at the bottom end.