strategies for global success for it professionals in caribbean central banks

7/29/2019 Strategies for Global Success for IT Professionals in Caribbean Central Banks

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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 [email protected]

Strategies for Global Success for ITProfessionals in Caribbean Central Banks


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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 valuechain

Quantum leap .... Punching above your weight class

Transformation 2.0 .... Call for the Caribbean IT Professional to leadindigenous innovation across region

Price Stability Objective key to Societal Harmony IT Innovation Vital

Recap


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Many ways potentially

The progressive method is the human capabilities way (Amartya Sen, 1997, 1999)

Human Capabilities has since been adopted in UNs 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 ?


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Wealth and prosperity are primarily generated by businesses

Governments role is to deftly appropriate a level of income from

the production classes and be the fair and balanced allocator ofthese 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 ?


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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 theirfickle, 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 ?


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Cultural

Human

Knowledge

Institutional

Financial

Man-Made

NaturalEndowments

Social

Tangible Articulations

Norms Mental Models

Physical

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

...fromphysical capitalto social capital...


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Through Knowledge, Innovation and Creativity (KIC)

The Resource Based View (RBV) identifies the combination of Valuable, Rare, Non-

Inimitableand 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 competitiveadvantage

How do organisations create wealth and prosperity ?

2. Sustainable Competitive Advantage


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Resources and capabilities which are Valuable, Rare, Inimitable plus supported by anOrganisational 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?


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SUSTAINABLE COMPETITIVE ADVANTAGE

MODEL

Is the resource or

capability valuable ?

Is it heterogeneouslydistributed across

all firms ?

Is resource or capability

imperfectly mobile ?

Competitivedisadvantage

Competitiveparity

SustainedCompetitiveAdvantage

TemporaryCompetitiveAdvantage

YES

YES

YES

NO

NO

NO

Mata, Feurst, Barney (1995)

Acquired /ImportedInnovations

IndigenousInnovations


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Acquired vs Indigenous

Acquired /ImportedInnovations

Indigenous Innovations

Hardware

Cloud

Pervasive and ubiquitous mobiledevices

VOIP

COTS Software

Processes

Models

Context specific Applications

Intangibles


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Sustainable Competitive Advantage

Innovative Capacity

Competitiveness Improvement

Prosperity

Begins withresearch anddevelopment

ProductivityGrowth


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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!!


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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 1990s, 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 !!


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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!!


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Global Shift to the Knowledge Economy


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RESOURCE-BASED ECONOMIES EFFICIENCY-BASED ECONOMIES INNOVATION ECONOMIES

Transition

I to II

Jamaica

Guyana

Transition

II to III

Trinidad

Barbados

Stage II

Dom Rep

Panama

Costa Rica

Stage III

???

Stage I

Honduras

Nicaragua

Countries compete based on their

factor endowments: pr imarily

unskilled labour and natural

resources.

Compete on the basis of price and

sell basic products or commodities,

with their low productivity

reflectedin low wages.

Countries begin to develop more

efficient production processes and

increase product quality.

Competitiveness is increasingly drivenby higher education and training.

Wages have risen and they cannot

increase prices

Companies must compete by

producing new and different goods

using the most sophisticated

production processes and through

innovation.

Wages will have risen by so much that

they are only able to sustain those

higher wages and the associated

standard of living by higher value

production

The Shift to Knowledge and Innovation


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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 !!


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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?


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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?


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Unleashing the entrepreneurial energies of the population

Knowledge, experience, passion and networks are the keycomponents 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 ?


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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 above

our 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


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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 othersthese others are

forging ahead consistently and continuallya 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 ?


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Leadership sets the context for organisations to excel andbe 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


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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


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RESOURCE-BASED ECONOMIES EFFICIENCY-BASED ECONOMIES INNOVATION ECONOMIES

Transition

I to II

Jamaica

Guyana

Transition

II to III

Trinidad

Barbados

Stage II

Dom Rep

Panama

Costa Rica

Stage III

???

Stage I

Honduras

Nicaragua

Countries compete based on their

factor endowments: pr imarily

unskilled labour and natural

resources.

Compete on the basis of price and

sell basic products or commodities,

with their low productivity

reflectedin low wages.

Countries begin to develop more

efficient production processes and

increase product quality.

Competitiveness is increasingly drivenby higher education and training.

Wages have risen and they cannot

increase prices

Companies must compete by

producing new and different goods

using the most sophisticated

production processes and through

innovation.

Wages will have risen by so much that

they are only able to sustain those

higher wages and the associated

standard of living by higher value

production

Despite its size the Caribbean can punch above its weight class

6 Transformation 2 0


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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 theproductivity statistics

Evidence of firm and national-level productivity from IT will onlycome from enhancing Human Capabilities

WEF calls for next phase of IT development to drive usagerelevant to local contexts

Technology is easy ... People are hard John Gage Sun Microsystems 2001

Imported/Acquired Innovation (easy) .. Indigenous Innovation (hard)


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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


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7. The Symbiotic Partnership Model for Development

Let this be the house that the Caribbean builds !!


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Contribution of Central Bank to Development

Central Bank is a critical actor in ensuring a supportiveenvironment for harmonious growth and development

Key Business objective of CB is Price Stability

Inflation Targeting is a key contributor of the State can maketo nurturing these symbiotic harmonious societal relationships

The collective skillset of the Central Bank is critical to

dynamically sensing the monetary/economic data, craftingappropriate models and smartly managing the complex inter-relationships present in an economy so as to make thesymbiotic model work for all players/stakeholders


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Transitioning to Inflation Targeting imposes additional burdens on the

Central Bank for higher levels of governance, transparency andtimeliness of information dissemination.

Inflation Targeting rests on superlative Information Technology

The Jamaica Computer Society endorses and wholeheartedly supportsInflation Targeting as a policy measure of the Central Bank to build theconfidence of the private/business sector in the management of themacro-economic framework of the country

The attendant higher standards for transparency and communication willenure to the benefit of all stakeholders

(refer Blackman, Venner, Reserve Bank of New Zealand, Chilean Central Bank, )

Role of IT in Stabilising the Society

RECAP f KEY MESSAGES


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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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Thank you

References


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Barney, J., (1991), Firm resources and sustained competitive advantage, Journal of Management, 17(1), 99-120

Bounfour A., (2003), The Management of Intangibles, The Organisations Most Valuable Assets, Routledge: London & New York

Conner, K.R., and Prahalad, C.K., (1996), A Resource-Based Theory of the Firm: Knowledge versus Opportunism, Organization Science; 7,

(5), pp. 477501

Department of Culture, Media and Sport, UK, (1998), Creative Industries Mapping Document

Eisenhardt, K. M., and Martin, J. A.,(2000), Dynamic capabilities: What are they?, Strategic Management Journal,v21: 11051121

Ghoshal, S., and Bartlett, C., (1994), Linking organisational context and managerial actions the dimensions of quality o management,

Strategic Management Journal, v15-5, 95-112

Global Entrepreneurial Monitor (GEM), (2008),GEM Jamaica Report, UTECH

Grant , R. M., (1996) Toward a Knowledge-Based Theory of the Firm, Strategic Management Journal, 17, 109-122

Hofstede, G., (2001), Culture's Consequences: comparing values, behaviors, institutions, and organizations across nations (2nd ed.),

Thousand Oaks, CA, SAGE Publications

Moran, P., and Ghoshal, S., (1996), Theories of economic organisation, the case for realism and balance, AMR, v21-1, pp 58 72

Moran P., and Ghoshal S., (1999), Markets, firms and the process of economic development, AMR , v24-3, pp390-412Nonaka,. L., (1994), A Dynamic Theory of Organizational Knowledge Creation, Organisational Science, 5-1 14-37

Peteraf, M. A., (1993), "The cornerstones of competitive advantage: a resource-based view". Strategic Management Journal, Vol. 14, No. 3,

pp. 179191

Sen, A., (1997), Whats the point of a development strategy, Paper written for the United Nations Committee on Development Strategy and

Management of the Market Economy

Sen, A., (1999), Development as freedom, 1st Ed., First Anchor Books, Random House,

Schumpeter, J. A., (1934), The theory of economic development: an inquiry into profits, capital, credit, interest, and the business cycle,

(Cambridge, Mass.: Harvard University Press).

Simon, H. A, (1991), Organizations and Markets, Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 25-44,

Spring

Sthle, P., and Bounfour, A., (2008), Understanding Dynamics of Intellectual Capital of Nations, Journal of Intellectual Capital, Special Issue

of Intellectual Capital of Communities: The Next Step, v9-2, pp164-177

Teece, D., Pisano, G. and Shuen, A., (1997), "Dynamic Capabilities and Strategic Management". Strategic Management Journal, Vol. 18, No.

7, pp. 509533

The Work Foundation, (2008), Staying ahead: the economic performance of the UKs creative industries, UK Department for Culture,

Media and Sport

Umemoto, K., (2006), The Knowledge Economy and the Knowledge Society, Japan Advanced Institute of Science and TechnologyWernerfelt , B., (1984), "A resource-based view of the firm". Strategic Management Journal, Vol.5, pp. 171180

References

http://acawiki.org/index.php?title=Special:BrowseData/Summary&Journal=Strategic_Management_Journalhttp://en.wikipedia.org/wiki/Thousand_Oaks,_Californiahttp://en.wikipedia.org/wiki/SAGE_Publicationshttp://ideas.repec.org/a/aea/jecper/v5y1991i2p25-44.htmlhttp://ideas.repec.org/s/aea/jecper.htmlhttp://ideas.repec.org/s/aea/jecper.htmlhttp://ideas.repec.org/a/aea/jecper/v5y1991i2p25-44.htmlhttp://en.wikipedia.org/wiki/SAGE_Publicationshttp://en.wikipedia.org/wiki/Thousand_Oaks,_Californiahttp://acawiki.org/index.php?title=Special:BrowseData/Summary&Journal=Strategic_Management_Journal


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Regional Central Banks Information Systems Specialists 2011

New and Emerging Technologies:

Value Propositions for Regional Central Banks

Silburn Clarke FRICS,

Jamaica Computer [email protected]

Strategies for Global Success for IT

Professionals in Caribbean Central Banks

strategies for global success for it professionals in caribbean central banks

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