November 2006 Archives

This is a striking assertion.  In the Financial Times today, Francesco Guerrera in New York, Richard Waters in San Francisco and Rebecca Knight in Boston, quote the chairman of Wipro, Azim Premji,as saying:

"...the US faces a more acute skills shortage in information technology than India, blaming failings in America’s education system and restrictive immigration policies."

“There is a scarcity of IT professionals in the US,” Mr Premji told the Financial Times. “Engineering is not growing talent, and that is a cause of concern.”

He said Indian groups would confound expectations of a looming skills shortage in the country and continue to draw on lower-cost, highly trained graduates to retain their technological edge.

Recently the news has been that India would face a shortage of talent, but, India is investing in its educational infrastructure and graduating many more engineers than in the US.  This imbalance will cost the US dearly.

"Bill Gates, Microsoft’s founder, has been warning about the evaporation of interest in computer science at US universities for more than two years.

Jeffrey Immelt, GE’s chief, told a Washington audience in January that the US was on its way to becoming “the massage capital of the world”, with more students graduating in sports sciences than electrical engineering. "

One of my colleagues sent me a link to an article in Harvard Business School Working Knowledge about a book which is very relevant to my current work in innovation.  The book discussed in this article is called The Medici Effect.  The author, Frans Johansson, explores how individuals, teams, and organizations can create ideas at the intersection of different fields, cultures, and industries.  In the book he describes extraordinarly creative connections that innovators have made. These examples are explored further in his weblog, Stories from the Intersection: Stories about breakthrough insights at the intersection of fields, disciplines and cultures based on my new book The Medici Effect.  He has been writing and discussing his ideas since 1984, so his ideas are well supported.

CFO's are taking a more activist role in business strategy and corporate governance.

Custodian of stability and partner in strategy

CFOs face higher expectations and a mandate to restore trust. At the same time, they are being asked to support business strategy more actively through such techniques as scenario and risk modeling. As a result, CFOs are in a brighter spotlight and on a faster path up or down the career ladder.

How are CFOs managing these new roles and expectations? To better answer that question, Mercer and Russell Reynolds Associates recently conducted more than 60 interviews with CFOs and stakeholders.

A variety of external pressures including new regulations have affected the CFO’s relationship with the board (where interactions have become more intense, with boards adamant about not being surprised) and auditors (who have grown more rigid about discrepancies and less willing to commit themselves on controversial issues).

See full Article.
[Governance Focus]

According to the Financial Times the capital markets "...world is in the grip of an innovation wave that is leading to the creation of numerous new products."  On 15 November, the FT published a review of new financial innovations entitled Financial Wizardry that compiles articles on innovations in deritatives and other financial products.

A class action suit was filed in Iowa claiming that Microsoft had used its market dominance to discourage other software developers from producing applications that would have been superior to Microsoft's products.  The Des Moines Register reported on November 2 2006, in an article entitled "Microsoft judge tosses 'loss of innovation' theory" that Des Moinse lawer Roxanne Conlin brought a new type of damage claim called "loss of innovation".  She claimed that she was basing damage claims of $450M on "denial of free choice and loss of the benefits of software innovaiton" against Microsoft.  The $450M estimate is based on the damage done to Iowans who purchased Microsoft products between 1994 and 2006  and the absense of innovaiton in markets in which Microsoft has a commanding share.

Lack of innovation has an even more tangible cost with this kind of law suit.