Government IT partnerships key to tomorrow's work force

In tomorrow's economy, "jobs will go to the best-educated work force, where there is a strong IT infrastructure, innovation and a supportive government," says John Chambers, the dynamic CEO of Cisco Systems Inc. Addressing an audience at ASU's W. P. Carey School of Business, Chambers warned that other nations are outpacing the U.S. when it comes to harnessing information technology to maximize productivity. He calls for a committed partnership between the government and education toward strengthening the IT infrastructure and ultimately, fueling economic growth.

There are two global equalizers today — education and the Internet, says John Chambers, chief executive officer of Cisco Systems Inc., the San Jose, Calif., networking behemoth. And if U.S. decision makers don't shift direction, he warns, countries such as India and China will leverage both to our economic detriment.

First, his working premise: as the Internet continues to revolutionize the way governments and businesses function, information technology's role will expand in importance. As a result, countries that turn out more college graduates with math, science and IT degrees will own the future, and governments that support IT-focused education will drive the healthiest economies.

"Jobs will go to the best-educated work force, where there is a strong IT infrastructure, innovation and a supportive government," he asserted.

"Even the most conservative of the G8 leaders are now realizing the importance of infrastructure investment," Chambers told his audience in a recent speech at Arizona State University. The audience paid close attention — Chambers' industry savvy is widely acknowledged, his charisma obvious.

Refusing to be tethered behind a podium, the fast-talking, ginger-haired CEO grabbed a wireless microphone and strolled among the audience, stopping to address his remarks to first one, then another listener. The Center for Advancing Business Through Information Technology (CABIT), part of the W. P. Carey School of Business, sponsored the event.

Unfortunately, other countries currently get more IT bang for their educational bucks. Example: it costs approximately $48,000 to educate an engineer in China or India, he says, compared to $252,000 in the United States. And Russian students score higher in math and science than American students.

U.S. lagging in IT application

Foreigners also are using IT to maximize productivity more efficiently than the U.S., Chambers says. For instance, the Korean government is an avid IT supporter, encouraging research and development. India fosters a business environment that capitalizes on the Western world's increasing dependency on IT outsourcing. Japan builds out technological projects 30 times faster than the U.S., for one-third the cost. And since 2003 the number of American broadband subscribers has actually dropped, while the number of Chinese broadband subscribers has grown.

"Global competitors, in terms of IT, are catching up," he noted.

Chambers isn't saying that we're IT-ignorant. He acknowledges, for instance, that a growing number of American government agencies are automating functions such as licensing processes. U.S. businesses and their consumers are turning to the Internet to facilitate an ever-increasing list of priorities, too.

No longer is it just the young techno-geeks who rely on IT to get things done. Take retiree Bonnie Harman, 65, of Mesa, Ariz., for example. She researched Volkswagen Bugs online, eventually ordering a lime-green version that was delivered to the local VW dealership.

"We are moving away from the idea that only certain industries are 'early adopters'" of high tech, he continued. In theory, at least, IT can improve productivity at a water-purification plant, an elementary school, an advertising agency or a canning factory. But Chambers says that too often, organizations blow millions buying better accounting software or an interactive voice system while ignoring the other half the equation — re-engineering workflow changes.

Example: A hospital switches from keeping medical records on paper, stored in a file folder, to an electronic database accessible from the doctor's office or home as well as the facility. The hospital must re-engineer everything from physical space (goodbye to enormous file rooms) to who checks a patient's drug allergies against a new prescription (the computer).

Managing IT investments both more efficiently and creatively could push the U.S. economic growth rate to a sustainable 5 percent annually, maybe even to 10 percent, Chambers said. Right now, "3.5 to 5 percent is do-able" if a few changes are made. What changes? Leveraging IT has not altered the four priorities of businesses worldwide, which are speed/growth/flexibility; revenue growth; cost/productivity efficiency; and customer focus.

But the most successful global business leaders are becoming more aggressive in applying IT to their organizations, he says. Gross domestic product, IT/IP investment and productivity are tied together, and require government-business partnerships to maximize results.

If money talks, Chambers is on the right track. Since 1995, when he took over the helm at Cisco, annual revenues have grown from $1.2 billion to approximately $23.8 billion. (Note: Cisco's quarterly financial report to stockholders is due to be released later this month.)

He's an acquisitions man, buying an average of 10-12 companies a year as part of a corporate strategy of identifying and capitalizing promising IT trends. Getting in first with R&D is best, but buying up the early birds is the second-best option for anyone seeking to dominate market share, he added.

Partnerships key to Cisco's success

Zeroing in on a "market in transition" is one of the things Cisco is known for; as a result, more of the fledgling companies Chambers snaps up pay off, he said. "Most acquisitions fail. We do better because of our willingness to partner and to create an environment for partnering," he continued.

He believes partnering is part of the reason Cisco is involved with student-IT projects in 166 countries. "Giving back is good business. Can IT change the world? I think so," he continued, pointing to the Jordan Education Initiative, a joint project with Jordan and the World Economic Forum.

Chambers said that 49 percent of Jordan's budget is allocated to education because King Abdullah II "understands the implications." U.S. decision makers must commit to a version of the collaborative business-education-government model Jordan and other countries are using so effectively, or risk falling behind, he said.

In the past, "my attitude was that if the government stayed away, I was happy. Boy, was I wrong," Chambers continued. "Other governments know this." One of his biggest worries, he added, "is that less than 10 percent of our graduate degrees are in math, science and IT … we must be competitive in education."

Chambers wants the government — which means taxpayers — to fund more university-based IT research and development. At the same time, he said, we need to attract the most promising foreign students to American universities, potentially anchoring their future contributions.