Post on 04-Apr-2023
21st Annual Conference of Regional Central Banks’ Information Systems Specialists 2011
“New and Emerging Technologies: Value Propositions for Regional Central Banks”
Silburn Clarke FRICS,Jamaica Computer Society
silburn@spatialvision.com
Strategies for Global Success for IT Professionals in Caribbean Central Banks
presentation outline
• Redefining Development around Human Capital
•Source of sustainable competitive advantage
•Global shifts and trends towards knowledge-based economy
•Role of the Caribbean knowledge worker in exploiting the global value chain
• Quantum leap .... Punching above your weight class
•Transformation 2.0 .... Call for the Caribbean IT Professional to lead indigenous innovation across region
•Price Stability Objective key to Societal Harmony –IT Innovation Vital
•Recap
•Many ways potentially
•The progressive method is the human capabilities way (Amartya Sen, 1997, 1999)
•Human Capabilities has since been adopted in UN’s Annual Human Development Index (HDI)
•Do we measure our progress ?
•by the amount of books printed (economic measure) or by the level of literacy (human capabilities measure) ?
•or by the amount of internet infrastructure (economic measure) or by the amount of on-line education and services (human capabilities) ?
• by the amount of COTS software or hardware acquired (economic investments) or by the qualitative enhancement in the analytical capabilities and outcomes by Caribbean Central Bank professionals on behalf of Caribbean societies (human capabilities) ?
1. How do we assess societal development ?
•Wealth and prosperity are primarily generated by businesses
•Government’s role is to deftly appropriate a level of income from the production classes and be the fair and balanced allocator of these resources towards building the overall human capabilities of its citizens
•An enlightened business class, acting through its own self-interest, also enhances the lives of its employees, members and constituents through its own socially responsible behaviour
How do we fund development ?
•The business class overwhelmingly
•Not from FDI with its inevitable attendant lagged net outflows
•Not from Foreign Institutional Investors or Foreign Individual Investors (FII) via their fickle, Foreign Portfolio Equity Investments or Foreign Portfolio Debt Investments (FPI)
•Not from multi-lateral and bilateral debt (MLBLD)
•FDI , FII , FPI and MLBLD can support but ……
•Primary focus and source of national wealth creation, enhancement and preservation must be Caribbean business (public and private)
Where does wealth and prosperity come from ?
Cultural
Human
Knowledge
Institutional
Financial
Man-Made
NaturalEndowments
Soci
al
Tangible Articulations Norms Mental Models
Phy
sica
l
Environmental Issues Raw Materials Climate and Location
Transportation, Communication Power Water and Sewerage
Financial Systems Private Wealth Public Wealth
“Good, Clean Governance” Justice System Connective Organizations
Qualitative, Quantitative Data Frameworks and Concepts Insight Generation
Health and Population Education and Training Attitudes and Motivation
Architecture, Music, Language Range of Acceptable Behaviors Trust, Wealth Creation Attitudes, Long-term Thinking
Conservation, Restoration Agricultural, Mineral, Petroleum Proximity to Markets
Roads, Ports, Telephone Systems Electric Grids, Generation Capacity Pipelines, Pumping Stations
Banks, Stock Markets Bank Deposits Bank Reserves, Taxes, Duties, Macroeconomic Stability
Transparency, No Hidden Costs Property Protection, Predictable Regulations Chambers of Commerce, Unions
Statistics, Opinions, Records Theories, Processes, Procedures Universities, R&D, Market Learning
Nutrition, Medical & Mental Health Primary & Secondary, Technical Self-responsibility, action-orientation
Representative Elements Representative Examples
Drivers for national wealth and prosperity are changing...from physical capital to social capital...
•Through Knowledge, Innovation and Creativity (KIC)
•The Resource Based View (RBV) identifies the combination of Valuable, Rare, Non-Inimitable and Organisation (VRIO) resources and capabilities as the source of firm modern competition (Wernerfelt 1984, Barney 1991)
•Valuable resources and capabilities ….only gives competitive parity
•Valuable and Rare resources and capabilities ….. only gives temporary competitive advantage
How do organisations create wealth and prosperity ?
2. Sustainable Competitive Advantage
• Resources and capabilities which are Valuable, Rare, Inimitable plus supported by an Organisational context, culture and processes that can exploit these resources and capabilities especially where these are tacitly embedded or intangible (VRIO).…yields Sustained Competitive Advantage (Wernerfelt 1984, Barney 1991, Peteraf 1993, Bounfour 2003)
• Ubiquitous resources and capabilities such as IT does not give any advantages; they are valuable but nothing else. Advantage comes from IT-enabled processes, systems, applications and routines that are unique and inimitable
•Dynamic Organisational Capabilities flows from a grounding in Knowledge, Innovation and Creativity (Teece et al 1997, Grant 1996, Eisenhardt and Martin 2000)
•Knowledge resources are identified as being at the heart of the advantages under the Resource Based View (Conner and Prahalad, 1996) and in building national intellectual capital for global competitiveness (Stahle and Bounfour, 2008)
How can businesses create wealth and prosperity?
SUSTAINABLE COMPETITIVE ADVANTAGE MODEL
Is the resource or capability valuable ?
Is it heterogeneouslydistributed across
all firms ?
Is resource or capability imperfectly mobile ?
Competitive disadvantage
Competitive parity
Sustained Competitive Advantage
Temporary Competitive Advantage
YES
YES
YES
NO
NO
NO
Mata, Feurst, Barney (1995)
Acquired /Imported Innovations
IndigenousInnovations
Acquired vs Indigenous
• Acquired /Imported Innovations
• Indigenous Innovations
Hardware
Cloud
Pervasive and ubiquitous mobile devices
VOIP
COTS Software
Processes
Models
Context specific Applications
Intangibles
Sustainable Competitive Advantage
Innovative Capacity
Competitiveness Improvement
Prosperity
Begins with research and development
Productivity Growth
3. The traditional economic model is dead !!
•The model of the last two eras (agricultural and industrial ) indicated that Land, Labour (low-cost) and Capital (LLC) were the key factors of economic production
•Today .... Knowledge has become the main resource
Welcome the New Economy!!
•Caribbean cannot assert any globally distinctive VRIO resources or capabilities from factors derived from the old LLC model
•They are no longer relevant; have not been relevant for a long time
•We have no distinctive land assests, no low-cost labour factor, no unique capital factor
•The relevant factor for this new era ,which commenced in the 1990’s, is Knowledge, Innovation and Creativity
•We have to start investing our time and energies into creating, enhancing, preserving our own KIC factor for maximal global economic leverage
•Others have been doing so for the past 20 years
•That is where our unique and special VRIO resources and capabilities lie
The traditional economic model is dead !!
“The global pace of innovation is accelerating (not only in products and services, but also in processes, markets, sourcing, business models, etc.) “ Umemoto 2006
Caribbean cannot assert any globally distinctive VRIO resources or capabilities from acquired or imported innovations derived from others
Caribbean has to build its own capacity for creating indigenous innovations
Welcome the New Economy!!
RESOURCE-BASED ECONOMIES EFFICIENCY-BASED ECONOMIES INNOVATION ECONOMIES
TransitionI to II
JamaicaGuyana
TransitionII to III
TrinidadBarbados
Stage II
Dom RepPanama
Costa Rica
Stage III
???
Stage I
HondurasNicaragua
Countries compete based on theirfactor endowments: primarilyunskilled labour and naturalresources.
Compete on the basis of price andsell basic products or commodities,with their low productivityreflected in low wages.
Countries begin to develop moreefficient production processes andincrease product quality.
Competitiveness is increasingly drivenby higher education and training.
Wages have risen and they cannotincrease prices
Companies must compete byproducing new and different goodsusing the most sophisticatedproduction processes and throughinnovation.
Wages will have risen by so much thatthey are only able to sustain thosehigher wages and the associatedstandard of living by higher valueproduction
The Shift to Knowledge and Innovation
•There is a global value chain that swirls around us 24/7/365.
•We have a choice as to how and where we harvest value for our people from that chain
•We can choose to direct our political and business energies to the low-value, mass end ; which is really a race to see which nation can be the poorest....the fastest
• Or we can choose to toss our line to hook into the high-value end
• We can choose to start mid-way on the chain and grow our resources and capabilities, over time, to reap at the higher net value to firms and economy.
• It is all up to us !!
• We will not get any special push on this from outsiders
• The persistent drive to move up the chain, the pressing urgency of now, can and will only come from Caribbean peoples !!
4. Exploiting the Global Value Chain !!
•Can a human capabilities approach be pursued in harmony with a market economy approach ? Yes it can !
•Fair, deftly regulated, and properly and dynamically calibrated efficient marketplaces are the acknowledged as fairest allocators of resources in an economy
•Emerging alternative thoughts on markets … Organisational economy , as opposed to the market economy, may yield a better model and recognises the dominance of firms and organisations in modern economies (Simon 1991, Moran & Ghoshal 1996, 1999)
Whither markets?
• Exploitation with the global value chain is dependent on access to the GVC
• Leveraging the GVC rests on information on emerging opportunities that are exploitable as well as superior knowledge on a wide domains so as to opportunistically exploit
• Networks, alliances, partnerships and relationships are vital resources and capabilities
• Networks provide critical tentacles to extend our intelligence reach ; - commercial networks, academic networks, government networks, professional networks, family networks, scientific networks, research networks,
• The Greater Caribbean Network , the Diaspora, is uniquely placed to gather and provideintelligence on and access to information on the opportunities in the GVC
• Caribbean peoples are highly mobile world travellers and the Diaspora occupies positions of influence globally
• They are our Trojan Horses
Sensing opportunities in the Global Value Chain thru Networks of Intelligence?
•Unleashing the entrepreneurial energies of the population
•Knowledge, experience, passion and networks are the key components of the springboard for launching into entrepreneurship
•A focus on Knowledge through training & relevant education and building and reinforcing an Innovation Culture
•Dynamically building, combining, re-combining, re-configuring,deploying our resources and capabilities (Schumpeter 1934, Nonaka 1994)
•Higher level capabilities in our people ensures and assures higher level capabilities in our business organisations and our public organisations
How does the Caribbean exploit the Global Value Chain ?
• As a region we need to consistently and continually be punching above our weight class
• Not punching in an average way … but instead … punch way aboveour weight class
• Our sportsmen and women, our musicians, our hospitality sector demonstrate an ability to punch above our weight class
5. Punching above our weight class
•We can punch above our weight class in all pursuits that we are minded to; including IT and other domains from the academy
• The national fetish with Benchmarking on international standards is a recipe to remain average
• While we benchmark on the average of others…these others are forging ahead consistently and continually……a sure recipe for perpetually being behind
• We must set our sights on being way above and way better than average benchmarks in order to make quantum leaps be realisable
Leap-frogging or benchmarking ?
•Leadership sets the context for organisations to excel and be resilient (Ghoshal and Bartlett, 1984)
•Context creates the ambiance for individual motivation, engagement and commitment
Likkle ..... but tallawah
Transformational change driven by Superlative , Visionary Leadership
•LIkkle but…..tallawah
•Truly great leadership facilitates, builds and empowers individuals’ capabilities
Leadership sets the context for the Caribbean to begin to punch way above .. our weight class
RESOURCE-BASED ECONOMIES EFFICIENCY-BASED ECONOMIES INNOVATION ECONOMIES
TransitionI to II
JamaicaGuyana
TransitionII to III
TrinidadBarbados
Stage II
Dom RepPanama
Costa Rica
Stage III
???
Stage I
HondurasNicaragua
Countries compete based on theirfactor endowments: primarilyunskilled labour and naturalresources.
Compete on the basis of price andsell basic products or commodities,with their low productivityreflected in low wages.
Countries begin to develop moreefficient production processes andincrease product quality.
Competitiveness is increasingly drivenby higher education and training.
Wages have risen and they cannotincrease prices
Companies must compete byproducing new and different goodsusing the most sophisticatedproduction processes and throughinnovation.
Wages will have risen by so much thatthey are only able to sustain thosehigher wages and the associatedstandard of living by higher valueproduction
Despite its size the Caribbean can punch above its weight class
6. Transformation 2.0•Last Decade of IT provided enlarged technology access
•Despite these large investments, IT contribution to growth, productivity and development assessed as being anaemic
(World Economic Forum / Global Information Technology Report 2011)
•Economist Robert Solow first observed the “Productivity Paradox” in the US Economy in 1987 ... “I can see the computer age everywhere except in the productivity statistics”
•Evidence of firm and national-level productivity from IT will only come from enhancing Human Capabilities
•WEF calls for next phase of IT development to drive usage relevant to local contexts
•“Technology is easy ... People are hard” John Gage Sun Microsystems 2001
•Imported/Acquired Innovation (easy) .. Indigenous Innovation (hard)
The Caribbean IT Professional
Your success will depend on your;
•Knowledge
•Experience
•Networks & Relationships
•Passion
Networks and Relationships
a. speeds knowledge flowsb. accelerates the sharing of experiences
7. The Symbiotic Partnership Model for Development
Let this be the house that the Caribbean builds !!
Contribution of Central Bank to Development
•Central Bank is a critical actor in ensuring a supportive environment for harmonious growth and development
•Key Business objective of CB is Price Stability
•Inflation Targeting is a key contributor of the State can make to nurturing these symbiotic harmonious societal relationships
•The collective skillset of the Central Bank is critical to dynamically sensing the monetary/economic data, crafting appropriate models and smartly managing the complex inter-relationships present in an economy so as to make the symbiotic model work for all players/stakeholders
•Transitioning to Inflation Targeting imposes additional burdens on the Central Bank for higher levels of governance, transparency and timeliness of information dissemination.
•Inflation Targeting rests on superlative Information Technology
•The Jamaica Computer Society endorses and wholeheartedly supports Inflation Targeting as a policy measure of the Central Bank to build the confidence of the private/business sector in the management of the macro-economic framework of the country
•The attendant higher standards for transparency and communication will enure to the benefit of all stakeholders
(refer Blackman, Venner, Reserve Bank of New Zealand, Chilean Central Bank, )
Role of IT in Stabilising the Society
Societies depend on businesses (private and public) to create wealth
These businesses need VRIO resources and capabilities to create new wealth
People with their knowledge , ideas, creativity and innovation are at the core of VRIO
You may be likkle but you tallawah
The Caribbean can punch above its weight class in IT just as it has done in music and sports
RECAP of KEY MESSAGES
Success begins with believing in yourself and in building your own capabilities
Strengthening our regional networks of professionals enhance collective wisdom
CB Challenge : Managing Price Stability in context of Inflation Targeting rests on Smart IT
The globe has pivoted to Social Capital as the key driver of development
The relevant contemporary measure of development is Human Capabilities
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References
21st Annual Conference of Regional Central Banks’ Information Systems Specialists 2011
“New and Emerging Technologies: Value Propositions for Regional Central Banks”
Silburn Clarke FRICS,Jamaica Computer Society
silburn@spatialvision.com
Strategies for Global Success for IT Professionals in Caribbean Central Banks