Hire the retired

One of the central premises of the information-innovation-intangible economy is that we need all the brainpower we can muster. Yet, some of our most experienced brains are leaving the workforce. But there is an alternative, as the New York Times’ John Tierney explains in the “The Adams Principle.”

The work ethic is alive and well among America’s retirees, or at least the ones who bombarded me with letters after I suggested raising the retirement age for Social Security. They said they would be glad to keep working if I could find them a job.
In theory, this shouldn’t be a problem because employers ought to be clamoring for workers as baby boomers hit retirement age and the pool of younger workers shrinks. In reality, though, older workers face discrimination. While some companies are recruiting them, many employers are still leery, partly because of irrational prejudice against the old, but also because of perverse incentives in current policies.
. . .
Most workers could keep going longer if they and employers reconsidered the old assumption about a career trajectory. They could learn from the example of John Quincy Adams, who was elected to Congress after serving as president. He dismissed objections that the new job was beneath him, and voters didn’t discriminate against him for being overqualified.
Adams started his new career at age 63, just about when the typical American man now retires. He wasn’t especially spry, once calling his body “a weak, frail, decayed tenement battered by the winds and broken in on by the storm.” Yet he stayed on the job until his death at age 80.
He accomplished so much in those years that he is remembered as a better congressman than president. You could call him an inverse example of the Peter Principle, someone who succeeded by being demoted below his level of incompetence.
But I prefer to draw a different lesson. Call it the Adams Principle for employees and employers: if the president can flourish after a demotion, so can anyone else.

I’m not sure Adams would agree that his time in Congress was a demotion. If fact, he often referred to it as a promotion, since it was the one public office he held where he was directly elected by his neighbors (elected as Senator by the Mass State Legislator and his term as President through an election in the House of Representatives).
However, the point is well taken. The “retired” have more to offer than simply being “re”-“tired”.

Two alternatives in drug research

News of two alternative models in drug research (alternatives to the generally understood model of private company R&D funds leading to a drug that is patented in order to recoup R&D costs):
1) WSJ.com – Government Offers Funds For New Drug Research:

The federal government is trying to lure pharmaceutical companies into investing in riskier medical research by offering to pay for and carry out early clinical trials of experimental drugs.
The clinical trials are part of an unusual effort by the National Institutes of Health to solve a seemingly intractable problem: the dearth of breakthrough drugs for diseases that have long stymied researchers. The shortage stems from drug companies’ aversion to investing in promising but untested ideas that have been cooked up in academic labs. The cost of getting a new drug to market has ballooned, and drug makers tend to pursue products where the biology is known and the pathway to regulatory approval is laid out.
The project could bring pure research out of university labs and into the marketplace, but it faces hurdles in drug makers’ reluctance to share information with potential rivals.

2) WSJ.com – Funds Steer Biotech Drugs to Poor:

To remove barriers blocking biotech inventions from reaching patients in the developing world, the Bill and Melinda Gates Foundation is awarding a $5.4 million grant to BIO Ventures for Global Health, a nonprofit offshoot of the Biotechnology Industry Organization.
The award was to be made today at BIO 2005, the industry trade group’s annual convention in Philadelphia.
The grant aims to help the nonprofit group identify market opportunities in poor countries now considered too high-risk and low-yield for companies to invest in costly new drugs, diagnostics and vaccines. The funds will pay for business case studies of an array of products, starting with tuberculosis vaccines. A century old, the existing TB vaccine is only partially effective, and hasn’t prevented the disease from killing about two million people a year world-wide.
The grant could clear the way to making other biotech vaccines, as well as delivery systems to reduce the need for needles, refrigeration or trained personnel. It also could advance new diagnostic tests and drug-delivery mechanisms to enhance health care in poor countries.

Let a thousand research models bloom!

EU patents

The EU is pushing ahead with its plans for patenting of software. Technology giants win with EU patents plan – Technology – International Herald Tribune:

The 26-member Legal Affairs Committee agreed late Monday that companies could have EU-wide patent protection for computerized inventions including washing machines, cellphones and antilock brake systems as long as they make a technical contribution to further innovation in a particular field of technology.
The committee voted against several more stringent amendments in approving a measure that still bans patents on so-called business methods, like Amazon.com’s “one-click” online purchase feature.
. . .
The proposed patent protection would also extend to computer programs, but only when the software is used in realizing inventions.
. . .
Debate over the bill has divided those who say patents are needed to reward companies for innovation and others – mostly from smaller companies – who say they are concerned that they would be shut out of software they have been able to use for free.

I’m sure that open-source software community will see this as a defeat – and the big software companies as a victory. I take no sides in that fight – but I am glad that the Europeans didn’t go down the road of patenting business methods.
And if you are not worried about business method patents, try this as a thought-experiment: imagine what might have happened if Franciscan monk and mathematician Luca Pacioli had patented his system for double-entry bookkeeping?
By the way, according to Luca Pacioli: The Father of Accounting

While Brother Luca is often called the “Father of Accounting,” he did not invent the system. Instead, he simply described a method used by merchants in Venice during the Italian Renaissance period.

Under today’s US standards of “obviousness”, that doesn’t necessarily mean that he would not have gotten a patent.

Parents and education

If teachers are one of the keys to a successful education system (see Schools and Competitiveness), another key is involved parents. There is a fear that parents don’t always see the value in education. For example, according to a recent study in Michigan – “Your Child” Parent-Teacher Survey:

only one in four Michigan parents believe that getting a good education is essential to getting ahead in life.
Other key findings include:
* Nearly half of parents don’t think everyone should have a college education nor do they trust the judgment of teachers and professors.
* Three out of five define the success of their children without reference to education or the ability to support themselves.

The immediate response to these findings was summarized in a Detroit Free Press editorial, “Parents’ Low Expectations Frustrate Education Reform”:

Educators have taken a lot of criticism in recent years. But it’s now clear that their effectiveness has been limited by uninterested parents. State law and common sense give parents the fundamental right to direct their child’s education. But many parents have shoved off all the work on others, who cannot possibly carry the load by without parents as partners. State and local leaders need to convince parents that education should be more of a priority.

However, I think we need to take the summary of these findings with a large grain of salt. I am not sure that everyone should have a college education — there are many vocational and other types of training that are useful. And I am not completely surprised that parents define success for their children in non-educational and non-financial terms. “Be happy” was the number one answer in the survey; “education/degree” was number two.
82% of the survey agreed with the statement: “Parents need to be fully involved in their child’s education. Teachers and schools can only do so much by themselves.”
13% agreed with “Parents need to communicate with their child’s school from time to time, but it’s up to the teachers and
schools to let the parents know if there’s a problem.”
only 4% agreed with “Parents are responsible for making sure their child is dressed and ready for school. The teachers and schools are responsible for the rest.”
That doesn’t sound like a group of parents that “have shoved off all the work on others”.
Nor do I understand the finding that claims that patents don’t think education is important. On the question “How important do you think having a good education yourself is for getting ahead in life?” only 2% said it was unimportant. 21% said it was essential and 51% said it was very important. 20% said it was fairly important.
What they don’t have is confidence in the educational system: 48% said they had complete or a great deal of confidence. 51% said they some, very little or no confidence.
And while half of the parents don’t think everyone should necessarily go to college, those findings don’t apply to their own children. Only 3% said their child will not attend college. 9% said their may or may not attend college. 87% said their child would definitely or probably attend college (60% in the definitely category).
That doesn’t sound like a set of parents who don’t understand the value of college. 95% of the parents what their children to get some form of post-secondary education (vocational school or community college – 8%; at least a few years of at a 4 year college – 8%; a bachelors degree – 37%; an advanced degree – 42%).
One of the most interesting finding in the study was that parents understand the difference between “school” and “education”:
only 2% agreed with the statement: “Education is something that happens when a person is in school, and it’s done when you leave school.”
24% agreed with “Education can happen throughout your life, because
there are always opportunities to take classes.”
34% agreed with “Education can happen throughout your life if you
know how to educate yourself.”
38% agreed with “Education happens automatically throughout your life, whether you’re in school or not.”
That last answer is undoubtedly extremely troublesome to the education professionals. In other words, 2/3 of the parents surveyed believe that education is something that an individual does — not something that happens in schools.
More on this point later.

Schools and competitivness

While I’m on the topic of education (see yesterday’s postings), here is a story on how Finland upgraded its education system as part of its drive for improved competitiveness.Washington Post, “Focus on Schools Helps Finns Build a Showcase Nation”:

Superb schools symbolize the modern transformation of Finland, a poor and agrarian nation half a century ago, and today one of the world’s most prosperous, modern and adaptable countries.
Finland finishes first in the Program for International Student Assessment (PISA) exams that test 15-year-olds in all of the world’s industrial democracies. Finland also finishes at or near the top in many global comparisons of economic competitiveness: Internet usage, environmental practices and more. Finland, where the modern cell phone was largely invented, has more cell phones per capita than any other nation — nearly 85 per 100 citizens.
As recently as the 1970s, Finland required that children attend school for just six years and the education system here was nothing special. But new laws supported by substantial government spending created, in barely 20 years, a system that graduates nearly every young person from vocational or high school, and sends nearly half of them on to higher education. At every level, the schooling is rigorous, and free.
“The key,” said Pekka Himanen, 31, a renowned scholar with a PhD in philosophy (earned at age 20) who is a kind of guru of information-age Finland, “isn’t how much is invested, it’s the people. The high quality of Finnish education depends on the high quality of Finnish teachers. You need to have a college-level degree to run a kindergarten. You need a master’s-level degree to teach at a primary school. Many of the best students want to be teachers. This is linked to the fact that we really believe we live in an information age, so it is respected to be in such a key information profession as teaching.”

That last point is especially important — people make the difference. And, in contrast to the solutions that have been pushed in the US (computers and testing):

[Arabia Comprehensive School] includes the computer lab and two dozen laptops that students can check out for their own use. But there is no systematic teaching of information technology in the first nine grades — no teaching even of typing, and many Finns use just two fingers on the keyboard. It’s a good example of the non-compulsive Finnish approach to education.
Another is the general absence of testing. According to Karkkainen, the principal, apart from the PISA exams, her students face math tests at the end of fifth, eighth and ninth grades, and a test in chemistry and physics at the end of eighth grade. That’s it. “And there are no bad consequences,” for student or school, if the results are not good.

Interesting.

Restructuring high schools

And speaking of reinventing the high school, here is something I ran into – an excerpt from an interview from the June 1 Lou Dobbs Tonight show, “America’s High Schools Lacking”:

KITTY PILGRIM, CNN ANCHOR: My guest tonight says America’s public high school system is under relentless attack and he says politicians, businesses and the schools themselves are to blame. Well, joining me from Orlando is John Farrendino president of the National Academy Foundation. He’s a former superintendent of high schools in New York City.
And thank you very much for joining us. That’s quite a badge, former superintendent of high schools in New York City, and certainly you bring with you a wealth of experience. Why are schools failing so badly?
JOHN FARRENDINO, PRESIDENT NAT’L ACADEMY FOUNDATION: Well, there are lots of very complex reasons, but the simplest is that American secondary schools, as they’re presently structured, do not meet the needs of the young people who we service, and they were designed in an — a century ago. They need to be restructured into more accountable, small, learning communities so that we can get engagement of the business community into the school and answer the question that every teenager, time immemorial has asked: why do I have to know this stuff?
So, we need to change the actual structure and accountability systems that exist within the schools.
PILGRIM: You know, I was really fascinated by your premise that the schools were built for an agricultural society. Why, and why won’t they work? And, certainly reading, writing and arithmetic is still very relevant.
FARRENDINO: Oh, absolutely, it’s very relevant. But, yet, the design of the school at the turn of the century was designed in a theoretical, classical curriculum base which was designed to have 30 percent of the young people be successful, and the other 70 percent to go into our factories and our farms, and those factories and farms no longer have that need. So, the schools need to change dramatically.
We need to — the National Academy Foundation, our experience, is to create career academies using thematic approaches that turn kids on to learning and allow the business community to get actively involved so that when the young person is engaged, they can see that what they are doing in school relates to what opportunities might exist in the future for them.
PILGRIM: Give us an example of something thematically based that might…
FARRENDINO: OK, sure. A simple one and one of the academies we use is called the academy of finance, but, if you think about it, if a kid is learning their math and their social studies and their English as it relates to a theme — and you can use business or the financial services industry — when they are doing their algebra and the application of their algebra problems relates to how much money is earned or profit margins or all of the different kinds of machinations that take place that can take place with mathematics, using a business context, the kids then understand that the skills and tools that they are gaining are not abstract, but they’re things that are actually going to apply to their everyday life.

Sounds right on target to me.

Reinventing High School in DC

I’ve posted a number of comments about the need to reinvent the school system and move out of the industrial era mindset of the ridged high school. It looks like the DC school system is moving exactly in that direction, according to a story in this morning’s Washington Post, “Reinventing The Route to D.C. Diploma”:

Starting in fall 2006, the school system plans to offer the option of a fifth year at its high schools — with smaller classes, tutoring and other support services — for students who need more time to complete their requirements.
[ D.C. School Superintendent Clifford B.] Janey’s goal is to provide flexibility to teenagers who might be juggling school with job and parenting responsibilities — and to retain students who, after falling behind, might otherwise drop out well before 12th grade. He also plans to establish a three-year track for students who want to graduate early.
School officials said those moves are part of an effort to reinvent high schools. Other measures, they said, might include staggering class schedules so some students can start and end their school day later; expanding apprenticeship programs in various trades; and allowing students to enroll in community college while in high school.
“This flies in the face of the traditional way we’ve run public schools,” said William Caritj, the District’s associate superintendent for educational accountability and assessment. “We’re living in a world where young adults are faced with challenges. Public education needs to get with it to serve the needs of students.”

Or if public education doesn’t get with it, it will find itself part of the residue of the industrial age, and condemn its students to falling further and further being in the information age. In an information-innovation-intangible economy that will need every brain available, that would be unfortunate.

Patent reform – summary of Athena event

Patents are generally thought of as a means of boosting innovation. But, according to two leading scholars in the field (Adam Jaffe and Josh Lerner), “In the last two decades, however, the role of patents in the U.S. innovation system has changed from fuel for the engine to sand in the gears.” As Congress begins to examine the issue of patent reform, Athena Alliance and Congressional Economic Leadership Institute (CELI) held a Congressional luncheon briefing on Is the US Patent System Endangering American Innovation?
Speaker included Adam B. Jaffe, Professor of Economics, Brandeis University and co- author of Innovation and Its Discontents: How Our Broken Patent System Is Endangering Innovation and Progress, And What To Do About It; Susan DeSanti, Director of Policy and Planning, Federal Trade Commission; and David J. Kappos, Vice President, Assistant General Counsel, Intellectual Property, IBM. The session was moderated by Congressman Jim Cooper (D-TN).
The summary of the discussion is now available on the Athena Alliance website.

The latest in outsourcing

This just in from Art Buchwald – Outsourcing Takes a Holiday

The country is outsourcing everything these days. By sending work abroad, America saves billions of dollars.
It is in this spirit that Tommy Cook, a travel agent, came up with a plan.
“Why not outsource vacations?”
. . .
“Now this is the ‘Great Wall of China Trip.’ A Chinese guide in Beijing will visit the Great Wall and send you pictures of it. He will also go to Shanghai and Hong Kong. If you took this trip, it would cost $3,000. My man would do it for $130.”

And when will they outsource death and taxes?

The role of the firm

Being successful in business means living on the edge, according to a new book The Only Sustainable Edge: Why Business Strategy Depends on Productive Friction and Dynamic Specialization by John Hagel and John Seely Brown. In recent interview (Can Your Firm Develop a Sustainable Edge? Ask John Hagel and John Seely Brown – Knowledge@Wharton) John Hagel explained:

In fact, the title has multiple meanings, as anyone who knows John Seely Brown and myself will appreciate. We are never content with a single meaning. “The only sustainable edge” certainly has to do with the notion of competitive advantage, but it also has to do with the view that the ability to develop capabilities involves operating at the edge. Of course, “edge” has multiple meanings as well. It means the edge of the enterprise, the edge of business processes, geographic edges in terms of emerging economies, demographic edges in terms of younger generations coming in with different mindsets – it’s a whole set of edges that create the opportunity for accelerating capability building.

While their theory of accelerating capability is interesting (I wonder how long capabilities can continue to accelerate), I am more interested in their ideas on the future of the firm.

Ultimately what we see is the re-conceiving of the role of the firm. Traditionally the role of the firm has been to increase the efficiency of transaction costs, whereas we see more and more that the firm has to provide opportunities for capability building of the people within the firm. If the firm cannot do that, people will leave and seek out environments that can help them accelerate capability building better. It’s a very different way of thinking about what the firm needs to provide to its employees, and the role of the employees within the firm.

This may be a bit of “blue-sky” thinking. But the trend toward virtual organizations continues, with companies outsourcing more and more functions to other companies (e.g. shipping and logistics to UPS, payroll and even HR functions to Paychex, etc.). The current corporate form was an invention of the late 19th Century (as Alfred Chandler described so well in The Visible Hand). The organization form for business in the 21st Century is likely to be very different.