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Research on Future Skill Demands: A Workshop Summary 3 Skill Demands of Knowledge Work Opening this session, moderator Beth Bechky (University of California, Davis) explained that, after the previous broad overview of the labor market, it was time to “drill down deeper” into skill demands in selected groups of occupations. The steering committee chose to focus on “knowledge workers,” a group that is similar to the rapidly growing Bureau of Labor Statistics (BLS) category “professional and related occupations,” because knowledge workers are widely viewed as key to the nation’s future international competitiveness (National Research Council, 2001, 2006). The focus of the session was two different types of knowledge work—information technology (IT) workers and scientific knowledge workers in the biotechnology industry. KNOWLEDGE WORKERS AND FUTURE SKILL DEMANDS Israeli sociologist Asaf Darr (University of Haifa) said that “an examination of the sociology of work practice can enrich our understanding of the future skill demands of the U.S. labor force.” He explained that his paper reviews the debates in the sociological and business literature surrounding the term “knowledge worker” and the failure of both disciplines to define the term analytically (Darr, 2007b). In addition, he said, his paper calls for more research focusing on what knowledge workers do, what skills they possess and use, and how their work is coordinated and controlled. The most important implication of his research, he said, is that the boundaries between knowledge and service work are blurring, creating an emerging group of “technoservice” occupations that challenge the historic
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Research on Future Skill Demands: A Workshop Summary structure of the national labor force (Darr, 2007a). He depicted the new group in relation to other occupational groups (see Figure 3-1), arguing that this group, which combines service, technology, and software application, makes up the core of the emerging knowledge economy. The group includes software application engineers, technical support, engineering and scientific consulting, software implementers, and detailers. Darr observed that his view of the emerging occupational structure challenges the view of labor market polarization presented earlier (see Chapter 2). He said that the service sector is often described “as producing low-skilled and low-paid jobs,” in contrast to the knowledge sector, made up of “highly skilled individuals who hold college degrees and enjoy … autonomy and a high salary.” While he did not dispute the notion that the national labor market is polarizing, he is “opposed to the assumption that polarization occurs along the traditional service-knowledge divide.” Darr explained that he had conducted an ethnographic study of engineers engaged in selling real-time computing applications, interviewing the sales workers and also observing them at trade shows and in other settings. The research yielded two main conclusions. First, the traditional boundar- FIGURE 3-1 Occupational typology of service and knowledge work. SOURCE: Darr (2007b).
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Research on Future Skill Demands: A Workshop Summary ies separating design, production, and sales work have blurred, making this industrial model of the division of labor obsolete. Technical workers engaged in design, who were traditionally buffered from market forces, today interact directly with customers. In this interaction, the customers are allowed—and even encouraged—to influence the design process. Reflecting this integration of formerly distinct activities, companies have shifted their emphasis from design and manufacturing to sales. Second, Darr observed a “blurring of cultural distinctions between technical and social skills.” He found that, in their daily practice, sales engineers are simultaneously engaged in knowledge work and service work, deploying social and interactive skills that are closely intertwined with technical skills. He said that “as the technical complexity of sales increases, so does the need to depend on social and interactive skills.” Based on his research, Darr outlined several ways to strengthen engineering education. He said that, while others have already recognized the importance of including communication skills in the engineering curriculum (National Academy of Engineering, 2004, 2005), it would be especially valuable to require engineering students to work on customization projects as part of their undergraduate studies. Student internships focused on customization should teach students to negotiate technical details with clients and manage interviews “specifically structured to extract vital technological information about the client application,” Darr said. He argued that this approach would support companies’ growing emphasis on value-added processes and would improve the global competitiveness of U.S. technology firms. Noting that engineers now change employers more frequently than in the past, as well as collaborating more often with other engineers inside and outside the firm, Darr said that they would benefit from a greater sense of engineering as a professional community. To help create such community, he suggested increasing the linkages between engineering schools, perhaps by engaging students from different schools and in different nations in shared design and customization projects. He argued that increasing students’ knowledge of Chinese and Indian engineering practices would “improve the chances of American engineers leading the global engineering market rather than becoming its casualties.” Response Ken Kay (Partnership for 21st Century Skills) said he agreed with almost everything Darr had said. Based on his 15 years of experience working with the information technology industry, Kay said, the trends Darr described are “unassailable.” Commenting that U.S. education policy makers want to have a fight between skills and content, Kay said Darr’s
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Research on Future Skill Demands: A Workshop Summary paper made the case “extremely eloquently” against such a dichotomy. He suggested that the paper offers a vision, not only for engineering education, but also for science, technology, and mathematics education, as interactive and personal skills are essential to success in each of these fields. Saying that “a much bigger vision” is needed for the fusion of content and skills, he asked whether such a fusion might be important to prepare students for mid-level and lower level jobs, as well as engineering jobs. Kay noted that Darr described a business strategy in which an information technology or software firm has a general solution, which the sales and design staff then customize for individual customers. He argued that health care, education, and other industries are also adopting a similar “mass customization” strategy, asking Darr to apply the research method to other service industries. If Darr’s findings were more widely applicable, Kay said, the nation would need much more research to document effective ways to teach and assess the fusion of content and skills not only in engineering education, but also more broadly. He expressed hope that the view of content and skills as fused, rather than separate, would find its way into education policy, including future metrics under the No Child Left Behind Act and future metrics for accountability in higher education. THE KNOWLEDGE WORKER IN THE GLOBAL ECONOMY Opening his presentation on globalization of knowledge work, Martin Kenney (University of California, Davis) said he would give special attention to information technology professionals because they make up a large majority of the current and projected future U.S. science and engineering workforce (Kenney, 2007). Saying that there are many studies and estimates of the numbers of jobs that could potentially be moved offshore, Kenney cautioned that what the actual job losses might be is not yet known. Alan Blinder (2007) conducted a study indicating that up to 20 million jobs—in various occupations, not only science and engineering—might move abroad. The McKinsey Global Institute (2005) projected that, by 2008, 40 percent of all IT service jobs and 60 to 70 percent of professional engineering and mid-level management jobs in software development might move offshore. Lynn and Salzman (2007) identified a few cases in which U.S. IT service and software development companies are doing all new hiring of software engineers in India, and Indian engineers are using the newest software programs, while engineers based in the United States work with older “legacy” software. According to Kenney, a recent National Research Council workshop (2007b) suggests that, in the fields of integrated circuit design and in software development, few advanced research jobs will move offshore. However, Indian integrated circuit design firms and software development
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Research on Future Skill Demands: A Workshop Summary firms engaged in development and less sophisticated research are growing rapidly, as are Microsoft research and development facilities in China and India. Kenney mentioned a study of radiology work by Levy and Goelman (2005) that illustrates the role of legal and regulatory barriers in reducing movement of work offshore. Finally, in biotechnology and pharmaceuticals, Kenney said, he expects the United States to retain its strong international advantage in research and development, predicting only limited movement of jobs offshore (Loffler and Stern, 2006). In China, Kenney said, rapid development of IT manufacturing has attracted production engineering jobs from other nations, including Taiwan. The Chinese government and multinational corporations are making “massive increases” in research and development investments, and venture capital is flowing in. However, these investments have not yet led to “global class” technologies and services, as Chinese cell phone firms have recently lost market share in China to foreign firms. Generally, China is not competitive with India for providing offshore IT services to U.S. firms, Kenney said. Kenney explained that India is rapidly becoming more internationally competitive. He presented two figures depicting the evolution of India’s information technology sector, which grew increasingly sophisticated between 1995 and 2006 and now includes research and development, integrated circuit design, and packaged software (see Figure 3-2 and Figure 3-3). Ken- FIGURE 3-2 Information technology services in India, 1995. SOURCE: Kenney and Dossani (2007). Reprinted with permission.
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Research on Future Skill Demands: A Workshop Summary FIGURE 3-3 Information technology services in India, 2006. SOURCE: Kenney and Dossani (2007). Reprinted with permission. ney said that a major U.S. IT firm he consults with now views the Indian firm Wipro Technologies as an emerging competitor of such market leaders as IBM, Accenture, and EDS. This helps to explain why IBM, which had 60,000 employees (18 percent of its global workforce) in India in 2007, has announced plans to increase its employment in India to 100,000 by 2010 while simultaneously laying off waves of employees in the United States. Kenney concluded that the rapid offshore movement of some scientific and engineering jobs—particularly those in IT services and software development—is likely to continue. Nevertheless, he provided several reasons for optimism, stating “we are an entrepreneurial society” and “the most innovative startups in the world are being established and funded in the United States.” Echoing Finegold’s earlier presentation, Kenney noted that the United States has flexible labor markets, cutting-edge consumers, and great universities. To respond to these trends, “education is a key,” Kenney said. He suggested focusing on IT training during the high school years, encouraging creativity and entrepreneurship, and requiring all undergraduates to spend at least one quarter abroad. Finally, he predicted that there is “little future” for those who cannot become knowledge workers.
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Research on Future Skill Demands: A Workshop Summary Responding to questions, Kenney said that the wages of Indian IT professionals with bachelor’s degrees are growing rapidly but are still below U.S. wages. Kenney also said that the most important research questions about the growth of IT jobs in India are whether and to what extent these jobs are replacing U.S. jobs. He suggested that, given the continuing wage differential, American engineers would have to create higher value in order to maintain their higher wages. Referring to Darr’s presentation, Kenney said that developing technoservice workers, with strong technical knowledge and social skills, is “where we need to go with our engineers.” KNOWLEDGE WORKERS IN BIOTECHNOLOGY: OCCUPATIONAL STRUCTURE, CAREERS, AND SKILL DEMANDS Management professor Fiona Murray (Massachusetts Institute of Technology) reported that biotechnology firms headquartered in the United States employ about 200,000 people—which is about 80 percent of total global employment in biotechnology, but only 0.2 percent of the national workforce (Murray, 2007a). Addressing the question of why anyone would care about this small industry, Murray said that the industry is important to understand in itself and also “in terms of what it can tell us about science-based knowledge work more generally.” She noted that the larger biosciences sector, of which biotechnology is a part, directly employs over 1 million people and creates millions more jobs providing goods and services to the industry and its employees. In addition, the industry is growing rapidly, employs many scientists, and pays an average wage of about $65,000 a year, compared with the average private-sector wage of $39,000 (Battelle Memorial Institute and SSTI, 2006). Based on all these aspects of biotechnology, Murray said, “we clearly care about jobs of this type.” Murray then observed that, unlike other industries, biotechnology is defined by the technologies it uses to make products, rather than the products themselves. Because these technologies can be used in various industry sectors, definitions of the biotechnology industry vary. A commonly used narrow definition for a “dedicated biotechnology firm” is a company founded primarily to commercialize biotechnology applications. Among dedicated biotechnology firms in the United States, nearly half focus on applications for therapeutics, another 12 percent focus on diagnostics, 10 percent on genomics, and 9 percent on industrial biotechnology (Ernst and Young Global Biotechnology Center, 2006). These firms are highly localized in regional clusters around Boston, Los Angeles, Washington/Baltimore, and a few other metropolitan areas. Murray presented a conceptual framework for thinking about the skill demands of biotechnology work (see Figure 3-4). The initial phase of biotechnology work—for the many firms focusing on drug development—is
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Research on Future Skill Demands: A Workshop Summary FIGURE 3-4 Framework for analyzing knowledge work in biotechnology. SOURCE: Murray and Hsi (2007a). discovery, followed by development, clinical trials, and manufacturing; the last two phases are sales and marketing. Murray emphasized that firms collaborate in many of these activities (Powell, Koput, and Smith-Doerr, 1996; Casper and Murray, 2004). For example, biotechnology firms often license and sponsor academic research (Edwards, Murray, and Yu, 2006). Through these collaborations, biotechnology scientists are engaged in a dense network of relationships with peers in academia, pharmaceutical firms, and other biotechnology firms (Murray and Hsi, 2007b). Turning to skills and training, Murray said biotechnology work generally requires at least a bachelor’s degree in one of a range of bioscience disciplines and employs many professional scientists with doctoral degrees. However, success in biotechnology also requires an appreciation for the potential commercial application of scientific knowledge, which is not always correlated with high-quality science (Gittelman and Kogut, 2003; Henderson and Cockburn, 1994). Because biotechnology research is more team-based than academic research, industry human resource directors say they particularly value collaboration and communication skills, Murray reported.
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Research on Future Skill Demands: A Workshop Summary With regard to jobs and career paths, Murray said that most scientific work takes place in the research and development phases. An executive chief scientific officer and one or more managers (scientists with doctorates) direct the work of individual contributors—both scientists and technicians. The later phases of the work, in clinical trials and manufacturing, employ fewer doctoral-level scientists. The industry also employs engineers. Murray said that dedicated biotechnology firms experience few major shortages of scientific skills, as their demand for relatively small numbers of scientists is generally met by the growing supply of scientists trained through public research funding. However, she said, there are a few isolated areas of skill shortages, driven by a mismatch between academic research agendas and industry needs. For example, in biology, the industry needs traditional skills in mammalian biology, physiology, and disease progression, which are less available than the molecular biology skills that are now widely taught. In chemistry, the industry has a continued need for medicinal chemists, while organic chemistry in universities has become increasingly focused on biology. A more significant skills shortage results from “a mismatch in style of training,” Murray said, as current doctoral training across the scientific disciplines does not develop the “soft” skills required by biotechnology firms. Doctoral training is too individual in its focus, does not develop teamwork skills, develops only a limited understanding of the broader context of science (including potential commercial applications), and trains students to be too highly competitive. Doctoral graduates lack the ability to design an experiment to solve a business problem, such as to assess how risky a drug might be or whether a process could be scaled up. Future Trends in Biotechnology Knowledge Work Murray said that biotechnology investors’ demand for more rapid results is driving three broad trends in the industry. First, the work is being deskilled, as fewer new hires have Ph.D. degrees. For example, Genentech is reversing the stratification of its workforce, from 70 percent master’s degrees and above to 70 percent bachelor’s degrees and below. Second, the work increasingly requires integrated knowledge across scientific disciplines. Third, the work is being partitioned and moving offshore, with most rapid movement in chemistry. Although broad scientific skills in China and India still do not approach those of the United States, both nations are developing pockets of expertise in chemistry and biology, she said. Murray concluded that the future direction of skills in biotechnology knowledge work depends on whether one views it as an art or a science. Those who believe that biotechnology knowledge work is an art will seek competitive advantage through people, building collaborative environments
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Research on Future Skill Demands: A Workshop Summary to attract top scientists. Those who see it as a science will try to improve efficiency, partitioning the work, employing more highly specialized technicians, and obtaining talent offshore. In reality, Murray said, most companies are using a mixture of both approaches. Response David Finegold first commended Murray for recognizing that the biotechnology workforce is part of “a wider ecosystem,” including people in higher education, supplier firms, intellectual property attorneys, and venture capitalists as well as those directly employed in biotechnology firms. Second, he said, he is struck by commonalities among the skills she identified, the six broad cross-functional skills mentioned by Janis Houston, and the broad social and technical skills highlighted by Darr. Finegold observed that Murray used an important source of data on biotechnology salaries (Radford Consulting). He said that some observers question whether salary levels are adequate, given the lengthy training required to enter this field. He then agreed with Murray that there are two “very different stories” about the future of biotechnology. In one story, the few “really viable profitable clusters” of biotechnology companies, such as those around Boston and San Diego, will continue to grow and prosper as the source of global innovation. In the other story, Finegold said, these clusters will continue, but most new firms will not be created in the United States. Observing that U.S. biotechnology firms are moving work offshore “earlier in the firm’s life,” Finegold offered the example of a company located quite close to his institution, Rutgers University, in New Jersey. This firm has rapidly added employees in New Jersey, growing from 50 to 150 workers in the past two years, Finegold said, but has also expanded in India. For every chemist in the United States, the company employs a support worker in India, and the U.S.-based chemists manage these Indian support workers on a daily basis. This model has been so successful that the firm’s managers are thinking about how to apply it in toxicology and biology. Rather than taking an either/or approach to moving work offshore, the company plans to keep its core high-level scientific work in the United States, while seeking leverage by also using offshore workers. This is an example of a firm that is “literally being born global,” Finegold concluded. DISCUSSION Moderator Beth Bechky asked the two speakers to comment on the importance of cross-functional skills not only among those with doctorates or engineering degrees but also among others employed in their respective
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Research on Future Skill Demands: A Workshop Summary industries. Murray responded that, among her master’s of business administration students, many with backgrounds in engineering or science, the ability to communicate ideas “is still very challenging.” Despite many years of effort and special courses focusing on communication, the skill needed “to stand up and make a convincing case … to a manager, a set of investors … is tremendously lacking,” she said. She suggested providing students more opportunities to make presentations and receive feedback and integrating learning of communication skills with science content, rather than having separate communication classes. At the doctoral level, she said, employers say that they can find many people with the right scientific or technical skills, but they wonder whether these technical experts are “going to be team players.” Murray said that current doctoral education focuses too much on giving people scientific knowledge and techniques, with little thought about helping students “to actually organize their education.” Murray said that almost all biotechnology employees, even those in manufacturing, have at least a bachelor’s degree. Skills to interact with customers are critical, she said. Workers at all levels in the life sciences require the ability to manage complex relationships with other organizations. Murray argued that future scientists are not being trained appropriately to deal with these complex relationships, which confront them “very early on in their careers.” Darr said that abstract terms like “globalization” may cause frustration for sales engineers. He described an American engineer returning from Mexico, who complained about Mexican engineers, saying they were not “real engineers.” Darr could see that this engineer could not communicate with his Mexican counterpart and did not know how to build a working relationship. In another case, Darr observed an American sales engineer return from Singapore with complaints about how the people there worked, which created a barrier to “the dialogue that was essential for the customization project he was working on.” Kay offered data supporting the argument that cross-functional skills are important in fields beyond IT and biotechnology. In collaboration with two other groups, the Partnership for 21st Century Skills surveyed human resource managers about their skill needs in 2006 (Casner-Lotto and Barrington, 2006). Among a list of 30 types of content knowledge and skills, respondents rated oral communication skills, collaboration skills, professional and work ethics, written communication, and critical thinking and problem solving as much more important than all other types of skills and knowledge. They also indicated that many new entrants, including four-year college graduates, were deficient in these skills. Commenting on lower level employees’ need for cross-functional skills, Finegold mentioned that Rutgers University had received state funding to link the biotechnology industry with community colleges and high schools.
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Research on Future Skill Demands: A Workshop Summary He said the university-community college-high school partnership plans to take approaches used successfully by the Keck Graduate Institute and the Massachusetts Institute of Technology to train master’s degree students and transfer them to the high school level. These approaches integrate science, management, and people skills. For example, teams of high school students are developing business plans for new biotechnology companies and presenting them to venture capitalists. In response to a question, Murray said that many biotechnology firms use stock options to supplement salaries, and that smaller firms offer smaller salaries but provide stock options to more employees. She observed that, in small start-up firms, employees typically work longer hours, “more like academic hours,” than do employees in large pharmaceutical companies. Finegold added that using stock options to reward employees aligns well with the biotechnology business, in which developing a new drug may take 10 to 15 years. New, “cash poor” companies attract employees to join in the risk and offer the possibility of large rewards if the firm succeeds. Responding to Murray’s critique of the narrow focus of U.S. doctoral training, Kenney asked if this training has failed the biotechnology industry. Murray replied that it is difficult to address the question, “if people had been trained differently, would the industry have done better?” In the United Kingdom and Europe, doctoral training is even narrower, she said, noting that students studying in the United States must take two years of course work before starting their research. Murray said she was not calling for broader scientific training, but suggesting new approaches to develop the communications, teamwork, and other broad cross-functional skills that are important for the industry. Kay agreed with Murray from the perspective of the IT industry. A start-up firm may have “a brilliant idea,” but the challenge is to bring it to scale. This means not only programming the software correctly but also creating a team that can overcome barriers inhibiting growth. Success requires the ability to “be globally aware” and think about IT issues far beyond the development of the specific product. At least some of the scientists and engineers in the firm need such skills to translate the business idea into commercial success, Kay said. Responding to a question from Paul Osterman (Massachusetts Institute of Technology), Murray said that, at Genentech, employees are now conducting experiments using biological cell systems that are “robust enough that you can actually work on them in a quite routine way.” As a result, the company is increasing employment of specialized technicians who can operate certain types of equipment and work with animals, but who do not design the experiments. Osterman responded that this development at Genentech might relate to Autor’s argument that computers are eliminating routine tasks and mid-level jobs. He noted that, while the routine work is
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Research on Future Skill Demands: A Workshop Summary being eliminated for the doctoral scientists, the company is creating a mid-level job for more people. He suggested that the creation of technician jobs in “this very high tech sector” could be significant in light of the questions raised earlier about the future availability of mid-level jobs. Responding to the question of whether there is a national shortage of scientists Murray said that none of the companies she has talked with has suggested that there is a shortage of qualified chemists or life scientists. She said that employers’ greatest concern “is not numbers, it is training.” She cited the example of managers who told her they could interview hundreds of candidates for an organic chemistry position but wish they knew how to identify those candidates who “can behave collaboratively” and have the other broad competencies discussed at the workshop. She argued that the degree to which scientists have these other capabilities “really seems to be the problem.” Darr added that some companies choose to completely separate collaborative skills from technical skills. He studied one firm engaged in implementing new software for enterprise resource planning systems (i.e., large software packages integrating computer systems of different divisions or functions in a company). This firm hired two different types of people, including software engineers and another type who know the subject matter (the business function for which the software was being developed) and have good social and communication skills. The firm’s customers see only people from the second group, who act as brokers between the customer and the software engineer. Darr said that this is another solution to the skills challenge that is “not integrated.” Bechky offered several concluding observations about the skill demands of knowledge work. First, in contrast to the public perception, this work requires not only abstract knowledge and technical skill, but also manual and social skills. She said that Darr’s characterization of this complex blend within knowledge work as “technoservice” work is an important contribution. Referring to Autor’s typology which distinguishes between abstract and manual work (see Chapter 2), Bechky said that technoservice work “incorporates both … abstract and manual tasks into the same work” and is found not only in biotechnology, engineering, and computer science, but also in many other occupations. For example, computer software engineers, one of the fastest-growing occupations according to BLS (Hecker, 2005), have this blend of technical knowledge and social skills. Second, Bechky said that knowledge work involves solving problems “under ambiguous conditions.” As computers take over more routine work, she said, the remaining problems are more ambiguous, and solving them requires both individual knowledge and also the social and communications skills to draw on others’ expertise (Levy and Murnane, 2004). In closing, Bechky observed that organizations’ needs for both technical
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Research on Future Skill Demands: A Workshop Summary and social skills in knowledge work create tensions around how to coordinate and control the work (e.g., Barley and Bechky, 1994; Owen-Smith, 2001). She noted that Murray had raised long-standing questions about how to help scientists (or other technical workers) develop the social skills they require when they are promoted to management positions. Bechky mentioned that there has there has been a great deal of research on matrix management as one approach to managing knowledge workers (e.g., Ford and Randolph, 1992). Despite such research, she said, many questions remain about how to organize knowledge work in a way that recognizes and rewards individuals’ technical contributions while also recognizing that those technical contributions are in part a function of the individuals’ social skills in a network of colleagues (Darr, 2007b; Murray and Hsi, 2007b).