Innovation II: Skill gaps and the nature of the disruptive technology

One thing that was fairly obvious to me in yesterday’s seminar, was that everyone recognizes that innovation – probably both incremental and disruptive – will destroy one kind of jobs (simplified: the old ones). This creates a skill gap that then needs to be bridged. This was not in my model yesterday, but it sort of determines the length of A, I think. Anyway, the other thing might be more interesting. A persistent example used in the debate was the Swedish shipyard industry that was the victim of a wave of innovation. The skills gap – and some of the innovation was not only skills based, it was an innovation in organizing cost structures, i.e. outsourcing – was around shipyards and how they work (and where they work). But the innovation targeted a sector in that case, and even though the State subsidized heavily, all the jobs disappeared.

Here is the rub, though. Information technology changes not just one industry, but information processing in all industries. And on of the largest information processing industries is the public sector. So not only do governments have to withstand the lobbying of incumbents, they will find themselves being an incumbent. The re-organization and need for structural shift in the public sector needs to happen at the same time as the restructuring of industry. Healthcare, education, law enforcement — all of these are now being re-invented in a sense. The government, or parts of it, is the new shipyard industry, if you will. We know that the productivity gains (and new innovation) from investments in tech depend on organizing around the new technology and not using it as a carpenter would use a slightly better hammer. The hypothesis then becomes: we need new models of governance to reflect the shifting technological mode of production.

Anders Flodstrom also said something that really resonated with me. He pointed out that skills gap in general depend on the inertia in the education you are given as well as the inertia in when you are given it. We educate for specialist positions, we might even see vocational schools as a way to retrain people, but what we ultimately need is education that creates fluid competence on a broad scale. One participant suggest a revival of the trivium, what the Educated Man knew in the Middle Ages, and it is not a bad idea. If school produced Educated Women and Men we could leave to industry to assume the costs of organizing education so that it fits its current needs. In the OECD innovation strategy and the EU Innovation Union there are calls for industry to involve itself in the design of curriculae, but that is of course the wrong way to go: allocate the costs of tailoring competence to where they are most likely to be lowest. Who has the knowledge to make the right decision? A committee? Hardly. The actual employers? Why not. As an aside I think the problem with this is that employers have started at the low end with what in Sweden is called disciple systems. If industry was the only place to get a really good third tier education, i.e. doctorates et cetera, and competed with universities for that competence, well, that would at least be an interesting thought-experiment. (Though the obvious comeback is that the structure of democracy depends on the education we collectively decide on providing, but that is where I think the trivium could be even more powerful. Just think about it, what if everyone that left high school understood the difference between correlation and causation, I mean…)

More on this later.