strategies for global success for it professionals in caribbean central banks
TRANSCRIPT
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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
21st Annual Conference of
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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 IT
Professionals in Caribbean Central Banks