Now it's the knowledge economy, stupid

January 2, 2006

BY MICHAEL KRAUSS

Here's a New Year's party riddle. If education is so valuable, why aren't college towns filled with millionaires?

I go to strange New Year's celebrations, but that's a question I asked. No wonder I get invited to so few galas.

Other tech economy New Year's questions: If China produces 600,000 engineering graduates annually (a disputed but oft-quoted number) and the U.S. graduates fewer than 100,000, should we be concerned? You bet!

Fifteen top organizations led by the U.S. Chamber of Commerce are worried. They formed the Education for Innovation Initiative aiming to double the number of domestic science, technology, engineering and mathematics grads by 2015. If current trends continue, by 2010, 90 percent of all scientists and engineers will reside in Asia. Scientists and engineers drive knowledge-economy innovation, and innovation creates wealth.

The group thinks we need another national initiative, like the effort following the Russian Sputnik launch in the 1950s, to train knowledge-economy professionals.

Questions for the future

Is Chicago producing and retaining enough knowledge-economy talent to fuel growth? What should be done to grow Chicago's knowledge economy? Why aren't there more millionaires in those college towns?

"College towns aren't the most prosperous because their knowledge isn't deployed in the most economically productive occupations," explained Robert Weissbourd, president of Chicago based RW Ventures.

Weissbourd is not suggesting you drop out of school. Far from it. "Get as much education as you can," says Weissbourd, who consults to think tanks, local governments and businesses.

"We are in an economy where we change jobs numerous times," Weissbourd said. "Learning to learn is the skill that is critical. Be able to read, write and learn new things."

Weissbourd is bullish on Chicago's prospects because our local economy is diverse and not dependent on any one industry -- plus we have a strong knowledge economy, the sixth-largest in the nation according to McKinsey & Co. We're not the kingpin of IT or biotech just yet, but many of our local industries are technology intensive.

"Chicago is one of only three truly global cities in the country," Weissbourd said. "We have an enormous concentration of financial services, legal services and management functions. We're a headquarters city. Those are knowledge functions. They involve the knowledge economy."

To succeed, Chicago must attract and retain talent.

Observers such as Carnegie Mellon University Professor Richard Florida suggest urban leaders invest in cultural amenities to attract the emerging creative class. Weissbourd disagrees: "Some cities think if they're fun places, they'll attract educated people. Research shows that flat out is not right."

Is Chicago at a disadvantage over sunnier climes? Weissbourd doesn't think so. "Educated people go places that are rainy, snowy and cold," he said. They may not love the climate but people go where there are concentrations of high-paying, knowledge-intensive jobs. Chicago can't control the weather but we can work to keep the knowledge occupations here.

Weissbourd praises the move that brought Boeing here in 2001 but cautions not to focus solely on risky industry sectors such as aerospace or even biotech.

He encourages thinking across industry and going after the segment of better paying knowledge-based functions like the global headquarters jobs.

Should we invest in nanotech, biotech, software development and mobile wireless technology?

Weissbourd thinks those definitions are too broad. Ten years from now, biotech could include a dozen industries and hundreds of occupations.

"Chicago has a huge amount going for it," Weissbourd said. "We need to focus on gaining those high-paid knowledge economy jobs across all our diverse economic sectors."

IITA board grows

The Illinois Information Technology Association added to its board.

New members include: Navteq technology vice president Aaron Crane; University of Chicago entrepreneurship director Linda Darragh; SmithBucklin CIO John Fischer; Alterian CFO Joe Fuller; Tellabs CIO Jean Holley; Oracle vice president Lou Meshulam; SimDesk director Bruce Montgomery; SSI Embedded Systems CEO Michelle Morda; City of Chicago CIO Chris O'Brien; Authentify CEO Peter Tapling, and Illinois CIO Exchange CEO Bill Waas.

Michael Krauss is a Chicago area tech writer and consultant.

 

 

 ©2006 Marion Consulting Partners