02 Nov We Need Techo-Savy Leaders – Don’t just blame government and education for economic problems
At last year’s 2002 Wisconsin Economic Summit it was suggested that we focus on expanding the “high-tech” sector of our economy as the quickest way to create faster economic growth and raise our per capita income above the national average. It was pointed out that our basic industries are in relatively good shape, but we are missing the high-tech, high-growth engine that can pull our economic train at a faster speed. More high-tech companies will create more high-knowledge jobs that pay higher salaries, it was argued, making it possible to retain more of the graduate and post-graduate students being produced each year by our educational and research institutions.
Since then Governor Doyle has come out in support of high-tech industries. There are now more than a dozen bills in the Legislature that supposedly would realign the regulatory and financial environment in Wisconsin to encourage our emerging high-tech industries. If enacted into law, such legislation will no doubt help to eliminate many of the impediments that now exist for small businesses. But the more important question is whether these changes will make a difference? Will they trigger a spurt of growth in new high-tech companies in Wisconsin? I think not.
From the perspective of a venture capitalist that has spent the last 20 years attempting to create successful high-tech companies in Wisconsin, most of the proposed legislation, although needed, will have little impact. It is hard for me to see how our economic problems can be blamed on bad government or poor educational systems. Any problems we have in these areas are only symptoms of the disease. I think the main reason we suffer the effects of a slow economy is that Wisconsin’s business leaders have been slow to recognize technology trends and unimaginative in finding ways to participate in rapidly developing, high-tech markets.
Our main problem is simply this: WE NEED MORE TECH-SAVVY BUSINESS LEADERS IN WISCONSIN! If we hope to change the pace of our economy, we need more business leaders who know a good idea when they see it. We need leaders with the ability to see how a recent scientific breakthrough could be used to create new businesses. Such leaders would be knowledgeable about technology and also creative and inventive. They would be leaders who are driven by the excitement that comes from discovery, from pushing the limits of possibility, from doing things that have never been done before.
In all the years that I have worked in the Wisconsin’s business community, as a banker and as a venture capitalist, I have been amazed by the lack of a technology vision among local businessmen. I have witnessed a consistent lack of insight into the forces driving the high-tech economy and how new technology is changing the basis of competition in many industries. There are notable exceptions, of course—people at GE Medical Systems, Rockwell, Astronautics, SGI, Cray, Plexus, Promega, Epic and a few others. But, by and large, Wisconsin business leaders are low-tech and mid-tech thinkers, and many are outright technophobic.
At times I have even seen a frightening disrespect for higher education. Wisconsin business leaders have told me that they prefer to hire less educated workers that they can train internally. I have heard them say, “We don’t hire PhD’s at our company because we find that they are hard to manage and don’t fit into our system.” In my view this is code for “Phd’s are too expensive and we don’t like to hire anyone who will challenge our conventional thinking.” Is it surprising then, that we are experiencing “brain drain,” or that the level of technology innovation in Wisconsin has dropped to an all time low?
The shortage of techno-savvy business leaders is not unique to Wisconsin. This problem is becoming increasingly apparent in board rooms of industrial corporations across the country. The results of a recent study by CI Profile, Inc., identified the changes that have occurred in the criteria being used for selecting senior executives in leading U.S. corporations. There has been a remarkable shift away from traditional managerial and financial skills toward more specific, technical knowledge of products and markets.
In the last eight years, the senior executives of leading U.S. companies have had to become increasingly more techno-savvy to keep their jobs. There has been a marked shift in what directors value (what they look for and insist on) in their executive leadership. It is no longer sufficient for a CEO to rely on subordinates to deal with the complex, technical issues facing the business. Modern business leaders are increasingly expected to understand and anticipate technology and market dynamics that are the real drivers of business growth and earnings. They must be able to correctly position the business to prosper in the rapidly changing environment of today’s high-tech, global economy.
In Wisconsin we need more executives who understand not only basic science, but also the power of new discoveries to create new markets. We need more business leaders who can apply scientific and technological insight to the process of making new products that change the nature of competition and propel the profitable growth of a business. However, such people will not be found among the ranks of liberal arts graduates with degrees in general management, finance, accounting and law. (People like me.) No, the people we need in Wisconsin are leaders who come from our engineering and research communities.
Fortunately, we have a large number of such people now employed in the Wisconsin workforce. I was told recently that there are more than 1,300 graduates of Massachusetts Institute of Technology now working in Wisconsin. Yet, these and thousands of other talented engineers from equally good schools are laboring each day in our state to squeeze-out small (10-15%) performance improvements in old technology. While such work makes existing technology better, it does not amount to a technological breakthrough that might spawn an entirely new industry. If we hope to create high-growth industries in Wisconsin, we must invent entirely new forms of technology that solves problems in ways never before thought possible.
Inventing new technology requires vision and support from top management. Too often, however, top management doesn’t get it. It is not their fault, really. Most of them took the minimum science curriculum in college and know almost nothing about modern physics, computer architecture, software systems or the structure of the human genome. When we recognize how little most mangers know about science and technology, it is not surprising that that they fail to see the importance of creativity and invention. But this can change. If we start making room at the highest levels of the business community in Wisconsin for our best scientists and engineers, we will gain a perspective that is now missing in those circles.
John Byrnes is Executive Managing Director of Mason Wells, a leading Midwest private equity and venture capital firm headquartered in Milwaukee, Wisconsin. John is a regular columnist for the Wisconsin Technology Network and can be reached at email@example.com.