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Evolution at Work

As the old saying goes, everyone complains about the weather, but nobody does anything about it. So it seems, sometimes, when it comes to the very real and persistent skills gap that drags down our entire economy. For those unaware of the term, the skills gap refers to the split between the kinds of skills that employers are looking for in their workers and those that job candidates actually possess.

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In a survey, 95 percent of Business Roundtable member CEOs — the men and women who lead America’s largest corporations — told us that they struggled to find qualified workers to fill open positions. Estimates regarding the number of open jobs that exist today, even in the face of persistently high unemployment, range around 4 million.

Left unaddressed, this problem will only get worse. Unlike the weather, however, the skills gap is a challenge that we can do something about. And all around us, efforts are underway to improve the ways that we prepare the students of today for the jobs of tomorrow.

We at the Business Roundtable have been wrestling with this issue for several years and are engaged on several fronts to bring the learning world in closer alignment with the working world. One of the most promising is the National Network of Business and Industry Associations, which we co-lead with ACT Foundation. In our view, this kind of cross-industry, multi-sector approach can make a lasting difference in how workers learn the skills of the modern workplace.

The idea behind the National Network is straightforward. First, we have brought together a broad-based collection of industry trade associations, employers of all sizes, and experts in certifications and credentials. These organizations represent 75 percent of future job growth through 2020. Second, we have encouraged these experienced leaders to create a new model for job preparation. This blueprint smoothes the path for students to enter a chosen field, move from one job to another and keep up to date with changes that affect their industry.

The results in less than a year since the National Network was created are already impressive. Two recent documents give us an early indication that we can in fact change the way employers, educators and trainers do business. One is a first-ever summary of the common skills that all workers need to succeed in today’s jobs, no matter the field or industry. These so-called “soft skills” give schools, students and job-training providers a template to follow to make sure they are focusing on tasks and skills that employers genuinely value. And this document is a ready-made tool for human resources departments to adopt as they seek to quantify just what it is they are looking for from all job candidates.

The second document offers an update of the tried-and-true apprenticeship model. National Network members sat down and developed a step-by-step guide for developing a 21st century competency-based apprenticeship model, one that could be adopted across a range of industries and skill sets. By laying out the steps an employer or industry could follow to create its own on-the-job learning program, the National Network has provided a glimpse of a future full of workers who engage in active learning throughout their careers — exactly the kind of culture that is key to winning in the competitive global economy.

The National Network’s efforts so far are just the start of this “evolution at work.” Look for more in the coming months as we seek to build a seamless, publicly available web app that will help future workers leverage their interests and knowledge to find the best jobs for them and help current workers find out where they can transfer what they know to a new industry.

Like most problems, the skills gap won’t solve itself. But by building new partnerships, leveraging technology and improving communication, we have a chance to tackle this challenge and transform how the talent pipeline connects to our economy. Maybe we can’t change the weather, but we can bridge the gap.

Dane Linn is a Vice President for the Business Roundtable, overseeing the Education & Workforce Committee.


Is Your Power Company Extreme-Ready?

Eight million homes and businesses without electricity after Superstorm Sandy in 2012, tens of thousands left in the cold by last winter’s polar vortex.

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Power generation increasingly resembles an extreme sport — is your utility company ready for the next round?

That’s a question many Americans want to know, with half of U.S. adults in a new survey identifying natural disasters and weather-related events are the greatest threat to the U.S. power grid. The greatest level of concern was registered in the Northeast, where more than 60 percent of respondents to the Harris Poll cited weather as the main threat to power.

“Natural disasters such as Superstorm Sandy, Hurricane Irene and the recent polar vortices highlighted the challenges utilities face providing power to meet high energy demand,” says John McDonald, director of technical strategy and policy development at GE Digital Energy, which commissioned the survey.

“With summer season underway — and the potential tornados, droughts and hurricanes that come with it — utilities should ask themselves if they are any more prepared to handle this stress,” says McDonald.

The question is largely rhetorical, given the current state of America’s power grid. Like the country’s roadways, bridges and other infrastructure, generating capacity isn’t keeping pace with growing demand due to a lack of investment. Smart-grid spending fell by a third last year in the U.S., which was surpassed by China for the first time, according to Bloomberg. Less than half of U.S. distribution substations have automation capabilities, making it difficult to detect outages in the distribution network that connects consumers to power.

Estimating that outages and power quality issues cost American business more than $100 billion on average each year, the Department of Energy is supporting the creation of a Smart Grid over the next decade that will transform not just how consumers get power, but how they interact with producers.

“Capitalizing on the recent surge in advanced technology deployments and the growth of “big data” will result in being able to leverage change such that the new processes and structures needed to operate the grid in the future do not create obstacles but rather promote the creation of smarter, cleaner, more resilient distribution systems,” Patricia Hoffman, assistant secretary for electricity delivery and energy reliability,told Congress recently.

The demand for a stable power supply comes through loud and clear from the survey, with more than 40 percent of respondents east of the Mississippi saying they’re willing to pay $10 more each month to ensure the grid is more reliable. About a third of those living west of the Mississippi said the same.

“We live in an on-demand world that depends on electricity — one where productivity, food, entertainment and even chores can be achieved with the touch of a button,” says McDonald. “Our appetite for automatic is so great, in fact, that 90 million American adults would be willing to pay more on their utility bills to maintain their electrified lifestyles.”

The connected consumer also wants better information, including real-time updates on outages on their digital devices. More than half of utility customers who experienced an outage over the past year never got an update about it from their power provider, the survey revealed.

The solution to consumer concerns comes not just from more power, but smarter power — an “energy Internet,” leveraging Big Data to deliver critical status updates about the grid to producers, who in turn can keep their consumers informed in real time.

The modern grid has digital sensors, smart meters and a two-way communications system to quickly identify outages send a final, “last gasp” communication to the utility alerting them of the location. Data analytics capabilities can monitor and assess the power restoration process, enabling utilities the information they need to keep consumers updated.

Some utilities have been ahead of the curve. NSTAR Electric recently developed a “self-healing” grid with GE’s help. The system, which powers more than a million customers in central and eastern Massachusetts, is now interlaced with 2,000 smart switches and 5,000 sensors.

Put to the test by Hurricane Irene in 2011, NSTAR was able to restore power to nearly half of its 500,000 customers without power in less than an hour. The company estimates it has been able to avoid 230,000 power outages so far.

“While we may not be able to control the weather in New England, we know that this technology enables our system to operate more efficiently than ever in all seasons,” NSTAR Electric President Craig Hallstrom said after the $20 million project was completed in April.

In the face of growing consumer demands — and increasingly extreme conditions — the smart grid could also be smart business.

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Promoting STEM in the Pink Toy Aisle

If you take a stroll down the “pink” aisle at the toy store, you’ll come across princesses, dress-up kits and dolls. With an abundance of these popular items, it’s no wonder research shows that girls lose interest in science, technology, engineering and mathematics (STEM) fields as early as age 8. While all of these items are a great way for girls to interact and imagine, it’s time for us to alter the way we think about toys for girls.

Debbie Sterling hero

When I founded GoldieBlox in 2011, I didn’t create a company just to sell toys — we’re on a social mission to change the way we think about toys for girls, as well to shrink the gender gap in STEM fields. Careers in STEM, and engineering jobs in particular, are among the fastest-growing and highest-paid jobs in the country. But the engineering profession is 87 percent male. I believe there are millions of girls out there who are engineers, but just don’t know it yet. At GoldieBlox, we aim to provide girls with options and show them that it’s normal to take an interest in engineering — and possibly even pursue it as a career. Having been in the male-dominated field myself, I faced a number of disadvantages. I realized the need to change this disparity.

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While studying engineering at Stanford University, I always wondered why I was one of only a handful of women in every class. From the first class on, I discovered engineering wasn’t what I expected. It wasn’t nerdy, it was actually very artsy — with assignments like designing an object to launch a tennis ball as far as you can using a soda can and a piece of string. I fell in love with my major and the desire to help more girls enter the field followed me for years after college. After months of research and planning, I landed on the idea of a construction toy designed specifically for girls.

I found that simply creating a pink building toy wasn’t enough. Young girls are far more avid readers than boys, and they internalize and learn more effectively through storytelling. I began to play with and babysit my friends’ kids on a more regular basis, to better understand the way they like to play and create.

Through observation, research and a love for drawing, design and storytelling, I finally broke through with GoldieBlox — the first construction toy that comes with a storybook, aiming to introduce engineering concepts to girls. Girls follow Goldie through a series of adventures, where she is tasked to build simple machines to overcome obstacles. Building alongside Goldie, they learn engineering concepts and develop spatial skills along the way.

My biggest challenge was getting the toy industry to believe in my vision for GoldieBlox. When I first introduced the idea at the New York Toy Fair, I was told, “Construction toys for girls don’t sell.” Undeterred, I chose to crowdfund GoldieBlox on Kickstarter and was able to find a group of supporters who really believed in the mission. In 30 days, over 5,000 supporters had contributed more than $285,000 — enough funding to start the first round of production and prove there is market demand for this product. With much determination and many late nights, GoldieBlox went from Kickstarter to Toys“R”Us in less than a year. And we’re not stopping there — this year, we’re expanding the toy line beyond book and construction sets to include digital products, apps and toys for older age groups.

It’s so important for more women to understand exactly what engineering is, and how exciting and creative it can be. We need more women to contribute to the field and bring with them a new perspective to projects. My advice to any woman who wants to become an engineer is: Go for it, persevere, and tell all of your friends and family about your journey.

My engineering education was incredibly challenging, but all the more rewarding because of it. It isn’t easy to be a woman in a male-dominated field, but we’ll only reach gender equality by inspiring others with our stories and refocusing our attention to all the creativity women have to offer. This is why I created Goldie, a character that I envision to one day be a mainstream, household name that will encourage and empower girls across the world to get building.

Debbie Sterling is Founder and CEO of GoldieBlox.


3-D Printing — Coming to a Store Near You?

3-D printing seems to have made everyone’s shortlist of “disruptive technologies,” but the real disruption yet to materialize is at the consumer level. The desktop production facility has enjoyed a high profile for its potential to change the face of manufacturing and retailing. Like the early iteration of a miracle technology that might be seen on Star Trek, the computer-controlled devices can build real three-dimensional things right before your eyes — no assembly plant required.

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Some see the 3-D printer, which stacks layers of plastic or other materials on top of each other to make objects from a digital file, as a gateway to the democratization of manufacturing — disrupting the traditional model of making and bringing goods to market.

“To be sure, 3-D printing has received its share of hype,” Dominic Barton, global managing director of McKinsey & Co., told The Wall Street Journal in response to a piece that asked experts whether the technology could live up to the image its advocates had created for it. “But in this case, we think that the excitement could be justified.”

3-D printing made the McKinsey Global Institute’s list of 12 technologies that have a high potential to become economically disruptive over the next decade. Consumer use of 3-D printing could have an economic impact of up to $300 billion a year by 2025, with sales of 3-D printed consumer products reaching $4 trillion that year.

One day, cottage industry manufacturers might churn out bespoke goods in tiny production runs unattainable with traditional methods. Or manufacturing might get even more local — showing up on the actual consumer’s desktop to print out a new smartphone, food processor or even a dress after a shopper purchases the object’s digital design file online.

The ripples of 3-D printing are likely to be felt in everything from toys to jewelry, ceramics and simple apparel. But at this point, most consumer 3-D printing applications focus on the things one can make with plastics, the building material overwhelmingly used by the current crop of printers.

Beyond Plastic

For the disruption to truly reach consumers, significant technological challenges still must be overcome. Most home and small business 3-D printers can produce objects using a limited palette of four different types of plastic. While this is sufficient for making toys, art, some simple replacement parts like shower rings, and even musical instruments, consumer manufacturing is unlikely to take off until the machine can print conductive materials.

Researchers report they are steadily making headway on printing circuits and sensors. In the U.S., North Carolina State University scientists have developed a conductive metal alloy that can be squeezed out of a 3-D printer head and solidifies at room temperature. Another team at Harvard has been able to 3-D print a working lithium-ion battery the size of a grain of sand. And in Europe, a consortium sponsored by the European Commission has successfully produced a plastic doped with supermaterial graphene that makes it conductive enough to be used in low-power sensors.

“We’re now upscaling the material to an industrial-level output,” says Jonas Hansen, an engineer at the Danish Technological Institute. “We can use it for thermal conductive applications and low amperage electric applications like building sensors directly into constructs.”

Beyond using multiple materials with different characteristics, the production process on individual machines needs to become faster—building small, simple objects on a current unit can take hours—and more intuitive.

Home Depot or Kinko’s?

Once the technology improves and starts producing goods such as electronics and other more complex items, there are two potential routes 3-D printing could take to go mainstream.

In the first, the technology and the software used to operate a consumer desktop unit at home will become so intuitive that printing in three dimensions won’t be markedly different than sending a document to a regular two-dimensional printer. This would help move the 3-D printing process from the realm of dedicated hobbyists and niche users to a wider market.

While the at-home 3-D printing market is still nascent, some rumbling sounds point to its potential. Home Depot recently announced it would offer MakerBot 3-D printers for sale in a dozen stores in California, Illinois and New York. The offering could represent a significant step into the mainstream for the technology and for MakerBot, one of the leaders in the small but growing personal 3-D printer space. In another sign, startup MakerBot was recently purchased by Stratasys, a publicly traded manufacturer of industrial- and office-based rapid prototyping and digital manufacturing systems whose revenue in 2013 reached almost $500 million.

The second path would see 3-D printing technology not quite make it into homes, but just down the street. In what might be called the Kinko’s model, the neighborhood printing shop would serve as a small-batch consumer manufacturing hub. Entrepreneurs around the world are already getting into the game. From Copenhagen to Colorado Springs, storefronts are popping up that sell 3-D printing services, machines and parts.

Until those and other paths to consumerization take shape, debate will continue about whether consumer 3-D printing will change the nature of commerce or won’t become much more than hype. The authors of the McKinsey analysis, take a more nuanced view, saying that while 3-D printing could transform how products are designed, built, distributed and sold, the process could take years. “Nonetheless, rapidly improving technology and a variety of possible delivery channels for 3D-printed goods (such as using the local print shop) could ultimately result in many products being 3D-printed.”

What 3-D printing will ultimately mean for consumers is still largely in the hands of technologists trying to overcome significant hurdles and a market that is naturally reluctant to change. But one thing is certain: A long road lies between where we are now and unlocking all the potential that consumer 3-D printing offers.


Trawling for Big Insight in the ‘Industrial Data Lake’

You’d need to hide yourself under a pretty large rock to avoid hearing about Big Data these days. From NASA to Netflix, organizations of all sorts and sizes are taking advantage of larger-than-life data sets to power everything from lunar modeling to color-pattern analysis. But many companies remain behind the curve — not due to a lack of data, but the absence of an efficient system to gather and analyze it all.

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That could be changing soon. A new system developed by GE and Pivotal aims to empower more companies to leverage the analytical tools of Big Data and the Industrial Internet.

“Big and fast data is a critical piece of how modern industry is reinventing itself in order to innovate and compete,” says Pivotal CEO Paul Maritz.

The new approach is called an “industrial data lake.” It leverages GE’s Predix™ industrial software platform  and Apache Hadoop, an open-source software framework, to process information 2,000 times faster and at one-tenth the cost of previous methods.

“Big Data is growing so fast that it is outpacing the ability of current tools to take full advantage of it,” says Bill Ruh, vice president of GE Software, explaining how the industrial data lake is able to merge IT with operational technology (OT) to enable companies to “get the most value out of their mission-critical information.”

The marriage of IT and OT will be needed as companies seek greater online control of their machines and other operational devices, with analyst firm IDC estimating that at least three-quarters of intelligent industry solutions will be data intensive. “As a result, effective industrial data management is moving to the forefront of business looking to ‘digitalize’ their operations,” says Lothar Schubert, platform product marketing leader at GE Software.

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The Lake Effect

So how does a data lake work? The essential mechanics of the system boil down like this: Predix connects together a broad range of industrial equipment in a network — the Industrial Internet — enabling operators to funnel sensor data from various networked machines onto a single platform. From there, Hadoop’s massively parallel processing architecture analyzes the data as a unified whole, rather than a billion separate bits of information, each with its own individual file path.

“Instead of slicing, dicing, and classifying the data, we capture the metadata, which is data about the data,” says Dave Bartlett, computer scientist and chief technology officer for GE Aviation. “Metadata provides a more robust and varied context at the time of analysis that’s been missing from conventional data storage.”

So far, the industrial data lake approach has been used to great effect by GE Aviation, in a trial that tracked some 15,000 flights across 25 airlines. Service crews were better able to analyze jet-engine temperatures and other performance factors, cutting costs by tenfold.

Such data-crunching capabilities can be applied to industries ranging from rail to healthcare, where small but powerful insights can equate to huge cost savings. “What most of our customers will tell you is, if you can help them unlock one more mile-per-hour for a locomotive running its daily routes, it’s worth up to $200 million a year,” says Vince Campisi, chief information officer for GE Software.

This in many ways reflects the promise of Big Data — not simply a massive database of disparate information, but a system that correlates and cross-references at the speed of commerce, drawing new insight from the aggregate.

Armed with an effective analytics framework, industrial users can move away from wholesale data warehousing to a more dynamic model where information storage is so efficient that it begins to change the business model.

For companies that haven’t yet embraced Big Data, it may be time to dip their toes in the lake.

Companies Mobilizing Against Trade Secret Theft

There was a time when the theft of a trade secret elicited a seemingly counterproductive response from the corporate victim — keeping the theft a secret. On one level, such a reaction was understandable, given the risk that going public about the compromise of a key piece of intellectual property (IP) could cause further harm to the bottom line.

Homeland Security Secretary Napolitano Announces New Cybersecurity Team

But silence is no longer an option, given the surge in cyber-espionage and the growing role IP plays in today’s knowledge-based economy. A rise in awareness about the threat — and potential damage — of trade secret theft has also helped spark a change in strategy. A recent study by PwC and the Center for Responsible Enterprise and Trade (CREATe) estimated that losses from trade secret threats range from 1% to 3% of advanced economies’ gross domestic product — hundreds of billions of dollars in the U.S. alone.

Putting a dollar figure on corporate espionage has always been a challenge, in part due to the silence of victims and the difficulty of even detecting IP theft. To get around those limitations, the study used research and development (R&D) spending and illicit activities —from corruption to occupational fraud — to come up with a ballpark range.

“It is difficult to accurately measure economic losses attributable to trade secret theft at a national or industry level,” says Pamela Passman, president and CEO of CREATe, adding that the proxy approach provides a “reasonable” estimate given the similarities between trade secret theft and other illicit activities.

The proliferation of cybercriminals, state agents and other players getting in the game has elevated the issue to the top of the international trade agenda. During high-level meetings in July, the U.S. got further commitments from China to clamp down on theft.

The U.S. and European Union have also taken steps to update their laws to keep up with ever-changing nature of the problem. Yet the inability to protect trade secrets in a consistent manner across jurisdictions creates an uncertain legal environment for companies operating internationally.

“For many companies, the actions take place in regions where the rule of law is weak for prosecution and, as such, many companies aren’t able to recover any damages,” says Passman.

The International Chamber of Commerce highlighted the weakness of legal protections worldwide in a recent report, “Trade Secrets, Tools for Innovation and Collaboration,” noting that the policy response remains extremely fragmented. The report notes that the convergence of trade secret laws globally could provide more legal certainty, but emphasizes that “ensuring that confidential business information is adequately protected from misappropriation requires action at the firm level, first and foremost.”

Thus, companies must play a key role in neutralizing the threat, and most recognize that. The vast majority of executives who participated in the latest GE Global Innovation Barometer — 86 percent — say protecting trade secrets is a priority.

Passman has been on the front lines of the corporate response, leading an effort to share best practices on minimizing the risk of theft across the global supply chain. Ideas Lab spoke with the former deputy general counsel for Microsoft about how executives can be proactive about protecting IP in the face of the changing scope and nature of the threat:

Working with PwC, you’ve come up with one of the best methods for calculating trade secret losses, using various proxies — corruption, illicit financing, occupational fraud — to come up with an estimate of 1-3% of GDP. Were you surprised by the size of the problem?

We weren’t too surprised at the estimate in light of the critical role of trade secrets in the overall confidentiality and proprietary information of companies. As we mention in the report, the pace of innovation from 1990 to 2010 has increased by 40.6 percent, as indicated by the number of patents issued. This increase, coupled with strong, continued investment in R&D in the U.S. and other advanced economies points to the increases in all types of IP, of which trade secrets are just one component.

The report lays out some starkly different scenarios for the future — from a sort of “wild west” scenario where companies have to wall off their information in a world without international rules; to a more open, collaborated environment in which companies can protect their IP. Which direction do you see as more likely?

The scenarios focus on varying weights/impacts of four drivers — regulatory environment for protecting trade secrets; the balance between cyber offense and defense; the openness of “cyber commons” vs a “walled garden” approach; and, the pace of innovation. These scenarios and factors will likely play out at different times and in specific ways. For example, in the latter half of 2013 some multinational corporations and national governments publicly raised the issue of segmenting or walling off parts of their Internet traffic. Companies can use these scenarios in considering different risk mitigation strategies.

Are you optimistic that nation states such as China are taking the issue of trade secrets more seriously, given they agreed at recent high-level meetings with the U.S. that enforcement is essential for ensuring competition and innovation?

The protection of trade secrets is an issue that governments around the world are taking more seriously, as witnessed by recent legislation in the U.S., and the European Commission’s proposed trade secret “directive,” which would define trade secrets and establish EU-wide rules to deal with unauthorized access, disclosure and use of such material. Companies in emerging economies are also increasingly interested in protecting intellectual property.

Given that cyber-espionage and other state-level threats are likely to persist, if not intensify, do you believe companies have the tools necessary to protect themselves and their supply chains from theft?

There are tools and approaches that companies can take today. However, the challenge lies in competing priorities and taking actions in a consistent and comprehensive manner. In 2012, The Conference Board conducted a survey of multinational companies, and 68 percent said trade secret infringement risk was very high, yet only 36 percent said their current approach was effective. Likewise, in the pilot program of our CREATe Leading Practices for IP Protection service, we found that companies generally have policies in place but no supporting business processes to ensure protection of IP.

Are you optimistic that companies are becoming aware enough of the trade secret theft that the threat can someday be minimized, if not eliminated?

We are optimistic that the risks of trade secret theft can be mitigated through increased awareness, education and taking practical steps, as outlined in the framework in the CREATe–PwC report, and through our CREATe Leading Practices for IP Protection service.

Top image: The U.S. National Cybersecurity and Communications Integration Center (Courtesy of Win McNamee/Getty Images)

Pamela Passman is the founding President and Chief Executive Officer of the Center for Responsible Enterprise and Trade (CREATe).