2014: A Contradiction of Devices and Desires

Technology dictated many major events in 2014. It was a year bookended by airline disasters, with three planes linked to Malaysian Airlines involved in catastrophes. It was a year of unrest — abroad and within the U.S. The actions and atrocities of the Islamic State drew near universal condemnation globally. Actions by police leading to the deaths of two black men caused riots and mass protests in the U.S. and may have inspired the murder of two police officers in New York City by a deranged man. We faced the resurgence of Ebola and a botched medical response in the U.S. The massive technology breaches that affected Target, Home Depot and Sony made people feel vulnerable (temporarily anyway).

As much as 2014 will be remembered by these seemingly unlinked events and tragedies, the common element to the widely publicized stories was the role of technology in causing the problem or the inability of technology to solve it. Because we love the beauty of technological solutions, we demand advances, even when concerns are raised by individuals or nations.

How could the Malaysian Airlines Flight 370 carrying 239 people, a Boeing 777 jet that was 242 feet long, 61 feet tall, weighing up to 660,000 pounds, just disappear? Its systems connected hourly with a satellite telecommunications company even after all other communications stopped. Hope remains that the jet will be found at the bottom of the Indian Ocean, but the incident remains a mystery. Shortly after Malaysian Airlines flight 370 disappeared, another Boeing 777, this time carrying 298 people, exploded over the Ukraine, when it was hit by a missile fired by a surface-to-air system. The missile, traveling at a speed of 1,900 mph, decimated the airliner. And at the end of the year, Air Asia flight 8501, an Airbus A-320 aircraft with 162 people onboard, crashed apparently because of technical engine failures due to weather. Because Air Asia is a 49 percent subsidiary, it represented another blow to Malaysian Airlines. One question arising from the three air disasters is simple: at a time when components can “talk” and weapons have amazing speed, power and ability to kill, why couldn’t technology prevent ice crystals from forming in an airliner’s engines or even lead the plane around the problem thunderstorm?

In the United States, the shooting in Ferguson, Missouri sparked riots and heated debate. It also encouraged the practice of equipping police with body cameras that document their activities. The underlying theory is that the transparency afforded by such technology will provide better evidence to the public when something goes wrong (and may even cause all parties to mind their behavior). The theory was put to the test when the death of a man who struggled with police in New York was videotaped and disseminated widely. Even so, there was no clear picture because of the wide interpretations of what happened in the video. Again, it seems we have great confidence that technology will provide an answer to certain problems, but how do you address the interpretation and judgment issues that go hand in hand with the use of technology?

When the Ebola epidemic spread in West Africa this year, people in the U.S. were assured that such a problem could not happen here. The assurance evoked much cynicism when a hospital in Dallas seemed not to follow protocol when Ebola struck. Fortunately, we appear able to contain Ebola and cure those who are infected, but the same therapeutic technologies don’t seem to be available or effective in West Africa. In this case, there does not seem to be a technology solution.

Finally, in 2014, the data breaches at Target and Home Depot affected many U.S. consumers as credit card and other information was potentially exposed when hackers accessed secure terminals at those companies. This caused the reissuance of many credit cards and extra attention to monthly charges to determine if fraud had been committed as a result of the breaches. Near the end of the year, however, the Sony breach seemed to be more challenging because it exposed electronic information on a much broader scale and involved internal documents and communications. The U.S. government has called it an act of state-supported terrorism by North Korea.

The link across these top stories is the misuse and ineffectiveness of technology. Advances in technology in recent years have enabled many positive societal outcomes. Most people have cell phones, new cars have black boxes to record data (similar to an airplane) in case of an accident, cameras linked to traffic control software create smoother traffic flow in many cities and wearable technology allows people to monitor their activity, health, and connect with others. In 2014, many of the main stories emphasized the shortcomings of technology. While this may be affected by the proclivity of the media to emphasize the negative, it illustrates the vulnerability that is caused by dependence on technology, belief in technical solutions and the escalation of the problem.

Some individuals have noted that we are entering an age of the Internet of Things (IoT). This refers to the ability of devices and appliances to talk to each other remotely and wirelessly. In positive form, it allows you to lock your doors remotely, turn your oven on or off and view activities in your home or office from afar. It also allows the devices to “help” you by braking your car if you get too close to another vehicle or turning your water off if a leak is detected. But it also creates an enormous technology vulnerability that could be hacked. There have already been television plots involving deaths when someone hacked into an individual’s addressable implanted medical device. There is also much writing and discussion about advances in artificial intelligence and the ethical issues that must be addressed as we equip computers and robots to act like human beings. Will the common flaws in 2014’s top stories be tragically exposed in a worse way involving artificial intelligence in a future year?

Our societal and business challenge is to ensure the design of adequate safeguards in new and existing IoT systems and to avoid panic about the inevitable changes that will be created by open communication among devices and appliances. Moreover, in some ways, the coming wave of technology enhancements brings a darker connotation to the title of P.D. James novel and miniseries, Devices and Desires, as the enabling of devices unleashes some of man’s less noble desires.

My hope for 2015 is that we recognize the need to consider humanity while seeking a technology that is the next big thing. At one point in time, dinosaurs were the big thing. Ironically, technology could send humans the way of the dinosaurs as easily as it could improve our lives. The difference is at the margin but the cost is infinite.


The Hidden Student Loan Debt Problem

Much outrage has been expressed over the difficulty U.S. college students and recent graduates are facing because of their student loan debt. Since the recession began in 2008, the amount of student loan debt has spiked by 84 percent, with borrowers owing a record $1.2 trillion. Nearly 40 million Americans have at least one outstanding student loan, according to new research by Experian. But is the problem as dire as some make it out to be?

Today, the average student owes about $28,000 on student loans. That is a big number, but a recent article in Forbes used some comparisons to help put that number into perspective. For example, the average American car loan is $27,000 and purchasing a car does not deliver the high return on investment that a four-year college education does. The U.S. Census Bureau estimates that over an adult’s working life, someone with a bachelor’s degree can expect to earn nearly an extra million dollars on average compared with someone with only a high school diploma. Similarly, the average home mortgage loan in the U.S. is now over $280,000. Some observers have suggested that student loan debt may prevent young people from purchasing cars or homes and hence is a serious problem. That may be true to some extent, but I argue that the real problem today is wage stagnation, which adds years to when borrowers can pay off their student loans and does much more to limit their opportunities in life.

Please understand that I am not downplaying the hardships of student loan debt or the seriousness of the rising cost of education. A college education has become part of the American dream, right up there with home ownership and apple pie — and rightly so. Years ago, government programs were created to subsidize student loans to honor the belief in higher education and recent proposals aimed at forgiving or reducing student loan borrowing seem to echo the same sentiment.

Let’s review some recent legislation and proposals. A law signed by President George W. Bush to provide forgiveness of student loans for people going into public service for 10 years will begin helping people in 2017. Other officials are working to provide even more support to indebted students. Senator Elizabeth Warren (D-MA) developed the Bank on Students Emergency Loan Refinancing Act, which allows borrowers to refinance their student debt at today’s lower interest rates. Such refinancing is already commonplace with mortgages and cars, but has not been easily available in the student loan sector. The Obama administration estimates that the bill has the potential to help 25 million borrowers to save about $2,000 over the lifetime of their loans. Earlier this summer, the bill was blocked in the Senate, primarily because it would require the imposition of new taxes or the loss to the federal government of $60 billion in student loan interest payments over the next decade.

In truth, while the amount of student loan debt is concerning, it’s not the most serious problem facing college students and recent graduates. When adjusted for inflation, student loan debt has increased, but, as noted, it is about the size of a car loan on average. While horror stories have been reported about individuals who borrowed massive amounts to finance multiple degrees in fields offering few jobs, that problem is connected to factors beyond the availability of loans. A critical problem today is the stagnation of wages, which makes people take longer to pay back loans. Politicians overlook this and often focus on symptoms of the problem. This diverts attention from the stagnant economy and the reduction of public funding for higher education, which is being felt in many states, including Pennsylvania.

Colleges do play a role in the problem, both for increasing costs so rapidly and for facilitating situations in which students can earn degrees that offer few opportunities in the job market. In an era of global markets, where jobs are often mobile and technology has automated many functions, colleges have not uniformly adjusted their standard model to ensure that students receive adequate preparation for work. While it is fine for university officials to say that they wish to educate students for their career and not their first job, it is imperative for colleges to provide career skills that allow students to find employment by using the critical thinking skills and other attributes provided in a traditional liberal arts education.

It is also essential for colleges to supplement the student experience in ways that enhance the employability of graduates. For example, a recent Gallup study showed that students who have strong relationships with faculty and mentors and have access to experiences that allow them to apply what is discussed in the classrooms (through internships, cooperative education programs, and other real-world and experience-based learning practices) are more successful in their careers and happier in life. Gallup identified six specific attributes and concluded that only three percent of the respondents strongly agreed that they had exposure to all six.

I am not saying that student loan indebtedness should be ignored. It is a problem, but it is less serious than other related problems. It is a symptom of a vicious cycle: State governments have reduced funding for higher education, which pushes tuition higher. Government-guaranteed student loans provide options for students to deal with higher college costs. Colleges use the increased tuition revenue to ensure budgets are met. There is inadequate pressure on colleges to emphasize job placement outcomes. Students and graduates have problems repaying the loans.

We are at a crossroads and must employ different solutions to address student loan debt. For their part, colleges must provide students with the necessary skills to be employable — even if it requires changing the traditional educational focus by adding career-focused majors in the liberal arts. Government must support higher education through consistent funding and by applying common sense to a variety of government-supported loan programs — for example, let people consolidate loans and set reasonable caps on the maximum amount that can be borrowed with a government guarantee. Society should recognize that some students will benefit more from a technical education program than a traditional college. Most importantly, government needs to stimulate wage growth, as this will lessen the problems of student loan debt much more effectively than will the creation of new legislation to forgive debt or the creation of new bureaucracies for monitoring colleges.


Blogging Alone: How the Social Media Disconnect Will Affect Business Schools

The ubiquity of social media reveals an interesting irony: Though we are more connected than ever before, loneliness is on the rise, and more people report they have no one to talk to, according to a number of research studies. Apparently, having a few real world friends is superior to having a million Facebook friends, which drives home the idea that Facebook is about quantity and not quality. Indeed, the purpose of Facebook is to broadcast, display and report ourselves to our wide world of “friends.” While there is nothing wrong with this new approach, it makes the old-fashioned method of sharing your thoughts with a few close friends seem increasingly antiquated.

For all the good social media brings, a generally unmentioned corollary is the fact that the more someone posts or tweets, the less time he or she has to read, experience or listen. Time is a limited resource. People must choose how to spend their time, and increasingly the choice is to reflect through social media — especially on oneself or one’s experiences — and as a result people are losing their ability to listen and engage others.

Because this dynamic affects human interactions and society, it will affect business schools. I see it exacerbating the existing trend of students coming to school with higher test scores but having a growing need for the development of emotional intelligence and social graces. Good grades alone don’t guarantee jobs. In today’s globally competitive environment, students must also develop social skills—especially the ability to interact, collaborate, and communicate. Texting is not the solution.

As a consequence, schools need to address this student deficiency in the curriculum. Doing so will require more than offering isolated non-credit seminars and Toastmasters groups. In my experience, it is highly effective for programs to emphasize hands-on learning activities and team-based projects. My school, for example, offers a variety of MBA and undergraduate consulting projects with companies and an MBA capstone simulation in which students are a firm’s executive team. The experiences take students out of their comfort zone, requiring them not only to use new skills from class, but also to address the concerns of a real Board of Directors. This helps students understand how it is possible to ace tests and fail interviews.

In some respects, a focus on soft skills is contrary to the traditional business school emphasis on mastery of a set of analytic tools and skills — i.e. foundational courses, specialized electives, and knowledge of certain facts. Today’s workplaces, however, require young people to be able to make sound judgments.  Yet, we educate students in a system that emphasizes standardized test results above all else – but that’s another blog entry entirely.

Beyond its influence on interpersonal skills and extroversion, social media may provoke other interesting effects. In the past, relationships forged between students and professors have fueled philanthropy and loyalty to alma mater.  Such close relationships are beneficial in other ways, too, as a recent study suggests that having a mentor in college leads to more engagement by students in their future careers. But if students continue to disengage from face-to-face interactions as they spend more time online, such relationships will occur less often. And faculty members, seeking to protect time for research, may prefer the result. For universities, the problem will not become apparent until years in the future. It will be a major issue for public universities, which have more students in the classroom and less state support to pay for their education.

In some cases, students’ reliance on technology and media will lead them to expect the same instantaneous response from faculty as from Siri or the customer service staff at an Apple Store. They will be primed to think it is a wise idea to email the CEO, ask for a raise for everyone, and copy much of the company workforce.  Already, Internet access in the classroom allows students to publicly “fact-check” professors — that is, when they are not showing their boredom by surfing the web. Professors need to spend time dispelling a student’s incorrect Googled notion instead of discussing the subject matter. Furthermore, the exchanges embolden students to believe they know more than they really do. This tendency is elevated by beliefs that everything can be handled through multi-tasking.  I am sure that faculty will take students to task. At the same time, because student satisfaction is part of the data used in business school rankings, the discrepancy between students’ expectations and faculty views may play out in a way schools detest.

Before you conclude I’m just an old Luddite, know that I see much value in the changes brought by social media and recognize that we are not going back to the quaint old days. Our hyper-connectedness has many clear advantages. It is democratizing and has in many instances increased transparency. Social media channels are revolutionizing how business schools can engage with students, alumni, and other audiences. Now, instead of sending a quarterly magazine, monthly e-mail or annual report, schools can talk to their audience (or a selected segment) on a daily basis. This offers an incredible opportunity to mobilize support for campus events, mentoring programs, employment referrals, fundraising, and more. We would be foolish to ignore the technology that provides such opportunities.

But we must also recognize the importance of how we use our time. As technology becomes further integrated into our lives, it is not clear whether it is fundamentally good (improving efficiency and the quality of life) or fundamentally bad (we are becoming part of the Borg). Moreover, in a world where people blog alone, what will stop them from doing more things alone? If the secret to eternal life is being connected to a central processor (i.e., the Matrix), will evolving generations choose that fate over normal messy interactions with other people?

Business schools must prepare students for the onslaught of technology, while being blind to what technologies will do or enable in the future. This makes speed more important than ever in what we do in b-school. And it exposes the vulnerability inherent in our deliberative governance processes. Will business school see this shift in the human experience as an opportunity to train students to generate revenue or a societal matter that requires discussion and the exercise of social conscience? Stay tuned for an answer. It may surprise you.