Megatrend #2: The Technology Revolution

Technology has transformed our society and economy. The impact on America corporations is profound and is explicitly evident by the increased investment in technology over the past three decades. In 1970, approximately 5% of corporate capital expenditures were for computer and data processing equipment, aimed at improving the productivity of human capital. By 1997, nearly 50% of capital expenditures by corporations were high-tech related.

The PC is as ubiquitous in business as the telephone or filing cabinet. At the corporate level, there is now one PC for every 1.3 employees. American homes are also embracing PCs. By 2002, 60% of households are forecasted to have PCs, up from nearly 50% in 1998. Recent studies have estimated that in families with children, PC Penetration is much higher, perhaps as high as 70% today.

Technology can take American schools into the 21st Century, but first we need to bring our schools into the 20th Century. Our K-12 schools have been slower to adopt technology, although they are beginning to respond to the opportunity. The students-per-computer ratio has improved from 16 students for every one computer to seven students per computer in the last five years.

PCs have achieved remarkable penetration compared to other technological innovations in the U.S., reaching a 25% market share in 15 years, versus 35 years for the telephone and 30 years for the microwave. But even more dramatic has been the wildfire rate of adoption of the Internet, which has reached 25% of the population in only seven years.

The explosion in Internet usage, achieving the most rapid rate of technological adoption ever experienced in this technology-hungry century, will continue. According to International Data Corporation (IDC), Internet access is forecasted to grow to 320 million users in 2002, up from 14 million in 1995. Moreover, e-commerce is expected to reach $400 billion by year 2002 from $8 billion in 1998.

Technology platforms such as the Internet have created tremendous opportunities for new business and education paradigms, ushering in a "New Economy" driven by knowledge and access to information.

Where the resources of the physically-based economy were coal, oil, and steel, the resources of the new, knowledge-based economy are brainpower and the ability to effectively acquire, deliver and process information. Those who are effectively educated and trained will be the ones who will be able to economically survive and thrive in our global, knowledge-based economy. Those who don't will be rendered economically obsolete.

As a consequence, education has become critical for both individuals and employers. In today's economy a four-year degree is just a prerequisite to participating in the industries of the future. Lifelong learning is now required for survival and economic longevity and technology such as the Internet, video-conferencing and satellite systems makes this possible.

The pace of change is dramatic. Under Moore's Law, the capacity of a computer chip doubles every 18 months, enabling more powerful hardware and software applications to emerge, and changing the requirements of the typical job.

Several factors are driving rapid change in the demands on human capital. The shift is obvious enough in information technology occupations where the focus is on the design, programming, maintenance and repair of the computing and communications infrastructure. These positions require a four-year undergraduate degree, advanced training or a graduate degree in a field such as science, mathematics or engineering. The changes in human capital demands may not be as obvious in positions at non-technology companies. However, as new technology-based ways of doing business, such as e-commerce, become more widespread, it will drive changes at even the most traditional of companies, and with it the composition of the labor force required to produce, service, and deliver goods and services.

Even labor-intensive manufacturing jobs are becoming highly automated and require higher-skilled employees to work sophisticated computerized machinery. Forty-two percent of production and non-supervisory employees in manufacturing and service establishments now use computers. Just think, a car mechanic's job is no longer as simple as looking under the hood. Mechanics now are required to understand complex onboard computers systems, as well as operate sophisticated diagnostic computers. As Vice President Gore recently observed, "A Ford Taurus has more computing power than the Apollo II that took us to the moon."

The impact of the digital revolution on all sectors of the education and training industry is significant, as summarized in the following table.

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