Taking the Digital Age Into New – and Very Green – Territory

36886821What does the world’s greenest office building look like? You’re about to find out.
The Edge (enticing moniker) towers over onlookers in Amsterdam and is home to 2,500 Deloitte employees … who don’t have desks.

Let me back up. There are desks, but employees aren’t assigned one of their very own. The space they occupy each day is based upon their schedule. They may get cracking on projects in the concentration room, along the sun-infused balcony, in the atrium – it’s called “hot desking.”

Living on The Edge (or at least working there) is all about innovation. Connectivity and going green are king. A smartphone app allows employees to control lighting and climate preferences at their workstations. Rainwater is collected for flushing toilets and irrigating gardens. A security robot stands guard. And that’s just the beginning.

Check out this short video and share your input: Brilliant work environment or too much of a good thing?

Interested in Business in China? Check Out this Event (and See the New BizVoice!)

Doing Business with China is both a popular phrase these days and the title of an upcoming seminar.

The September 20 event at the Indianapolis Marriott Downtown is part of an international business briefing series presented by Faegre Baker Daniels, Deloitte and Chase. Topics for the 8 a.m.-1:30 p.m. seminar include China mergers and acquisitions, joint ventures, protecting intellectual property, banking and finance, tax planning and more.

Learn more and register.

The Chamber's September-October BizVoice magazine features two related stories. Instead of doing business in China, we focus on Africa and business prospects in the world's second largest continent. But we don't forget about China, looking at international visitors and how some Central Indiana attractions put out the welcome mat for the Chinese. You can also view the entire interactive version.

Reports: Manufacturing Changes Required

If manufacturing is your business, you realize more than most that the game is changing on a seemingly daily basis. While you are on the front lines experiencing new challenges and hopefully taking advantage of opportunities, what is the big picture? The State Science & Technology Institute summarizes two recent studies:

The 2013 Global Manufacturing Competitiveness Index, published by Deloitte and the Council on Competitiveness, draws on a survey of more than 550 CEO and senior international marketing leaders to depict the changing global landscape. China continues to occupy the top spot as most competitive manufacturing economy, despite a recent downtown in economic growth. China’s abundant low-cost labor and material and strong government investment in manufacturing and innovation appear poised to preserve its competitive edge. The U.S. currently ranks third, but is projected to fall to fifth by 2018. Survey respondents found the recent focus on manufacturing in the U.S. encouraging, but cited a sense of uncertainty in the regulatory and taxation systems as a major concern.

Survey respondents cited talent and labor-related issues as the most important factors in judging the competitiveness of nations. The quality and availability of researchers, scientists and engineers led as the most important single factor, followed by the quality and availability of skilled labor. While the U.S. scored well in these areas, it performed less impressively in the second group of factors, which account for a country’s economic trade, financial and tax system. Respondents found the U.S. tax system overly complex and burdensome.

In a separate report, the McKinsey Global Institute argues that preserving the U.S. manufacturing edge will require a significant reassessment of federal policies as manufacturing evolves and splinters into new market segments. Policymakers need to adjust their expectations about job creation within manufacturing companies and view manufacturing firms as drivers of the overall economy, according to the report.

The lines between service-oriented firms and manufacturing-oriented firms has begun to disappear as manufacturing firms employ more workers in customer service, R&D, information technology and other tasks typically associated with the service economy. At the same time, service companies are engaging in small scale production that would have been associated with manufacturing in the past. The blurring of the line suggests that policymakers should focus on the innovative power of manufacturing firms to increase productivity and create ripple effects throughout the economy instead of job creation at individual manufacturing companies.

More on the reports: Deloitte and McKinsey

Skills Gap Dramatically Slows Business Growth

All right, we know there is a great disconnect with high unemployment while thousands of skilled jobs go unfilled due to a lack of qualified applicants. But just how bad is it?

A new report from Deloitte and the Manufacturing Institute answers that with a "pretty bad." Here’s a short analysis from the State Science & Technology Institute and a link to the 16-page report.

American manufacturing companies cannot fill as many as 600,000 skilled positions — even as unemployment numbers hover at historic levels — according to Boiling Point? The Skills Gap in U.S. Manufacturing, a new report from Deloitte and the Manufacturing Institute. This annual skills report provides a stark snapshot of the manufacturing sector’s inability to find qualified workers. Approximately 67% of survey respondents attribute the unfilled positions to a shortage of available, qualified workers. Unfilled jobs are mainly in the skilled production category positions (e.g., machinists, operators, craft workers, distributors and technicians).

The report also indicates that this shortage has an impact on the overall competitiveness of the U.S. manufacturing sector. Approximately 64% of respondents report that workforce shortages or skills deficiencies in production roles are having a significant impact on their ability to expand operations or improve productivity.

To resolve these issues long-term, the U.S. must focus on the next generation by developing a skilled workforce that goes beyond the required skills (i.e., a solid math and science base). Respondents indicated that high schools should focus on strengthening students’ critical thinking and problem solving skills.

Anytime we talk about this topic, I have to mention Ready Indiana, the Indiana Chamber’s workforce initiative, and its role in helping connect companies and employees with needed training resources.

Competing in the Manufacturing World

I see this phrase or a version of it often and use it myself occasionally: "In Indiana, we make things."

With that being the case, we (Indiana and the U.S.) need to be the best in the manufacturing business. According to a recent report from the Council on Competitiveness and Deloitte, it takes innovation and advanced skills development on one side of the equation complemented by research, technology and full commercialization.

The 16-page report is Ignite 2.0: Voices of American University Presidents and National Lab Directors on Manufacturing Competiveness. Five goals are outlined for colleges, universities and the national labs:

  • Continue to support the community colleges and universities though long-term government programs

  • Utilize community college more effectively to develop a skilled S&T workforce

  • Create conduits that connect talent and ideas at universities with the private sector and the local community in regional clusters

  • Implement university programs in math, science and manufacturing

  • Ensure that national laboratories develop mission-driven innovations and broaden the definition of national interests to include impactful economic development

The report also provides several recommendations to build a 21st century advanced manufacturing workforce and to fuel science, technology and innovation. In the coming months, the council is expected to release Ignite 3.0, which will highlight the perspectives of U.S. labor leaders.  

Billy Joel was Right; It’s a Matter of Trust

When the economy improves, do you expect your staffers to stay put? According to a new survey from Deloitte, many American employees may be searching for greener pastures. The reason? Lack of trust in leadership. You’d be wise to make sure that’s not the case at your company. The New York Post writes:

Just wait until the recession is over.

One-third of American workers claim they will look for a new job once the economy gets better, according to a survey released today.

A whopping 48 percent of those who want to change jobs are mainly motivated by a loss of trust in their employers, according to Deloitte’s fourth annual "Ethics & Workplace Survey."

“With lack of trust and transparency factoring into the employment decision of roughly half of the respondents who plan to job hunt in the coming months, business leaders must be mindful of the importance of both on talent management and retention strategies, as well as the bottom line impact,” said Sharon Allen, chairman of the board at Deloitte.

Forty-six percent also said a lack of transparent communication from their organization’s leadership was the reason why they were not happy at work.

“The survey shows that trust and flexibility are critical in today’s workplace," said Allen.

After all, you can’t go the distance, with too much resistance … and so forth.


Cato Scholars: Stimulus Could Lead to Scams to Make Madoff Blush

Here’s an uplifting gem from the folks at the Cato Institute. They assert President Obama’s stimulus package (and health care plan) could end up leading to major scams to seize money from the federal government — scams in which we’d all be investing. They speculate:

Government fraud has been in the news lately because analysts are expecting major abuses of the Obama administration’s $787 billion stimulus plan. One Deloitte expert argued that "swindlers, con men, and thieves could siphon off as much as $50 billion" of stimulus funds, which are vulnerable because policymakers are under pressure to shovel it out the door quickly.

Even more troubling is the potential for fraud and abuse created by President Obama’s other big spending proposals — particularly his giant health-care plan. Obama wants to inject hundreds of billions more tax dollars into federal health care instead of fundamentally reforming Medicare and Medicaid — broken programs that are already subject to Madoff-sized larceny. That is incredibly unfair to those of us paying the bills.

Take Medicare. The Government Accountability Office reports that the program makes about $17 billion in improper payments each year. And that doesn’t include problems in the new $60-billion-per-year prescription-drug plan, which is a juicy target for criminals. Harvard University’s Malcolm Sparrow, a specialist in health-care fraud, recently testified to Congress that official estimates are "lacking in rigor," are "comfortingly low and quite misleading," and exclude many kinds of fraud and abuse. He thinks that as much as 20 percent of the federal health-care budget is consumed by fraud, which would be $85 billion a year for Medicare.

Medicare makes a staggering 1.2 billion electronic payments each year, making it highly vulnerable to cheating by health-care providers and organized-crime rings. Criminals need only fill out the government forms carefully and the "claims will be paid in full and on time, without a hiccup, by a computer, and with no human involvement at all," according to Sparrow. A perfect example is the recent case of a high-school dropout in Miami who was able to single-handedly bilk Medicare out of $105 million from her laptop by submitting 140,000 separate claims for equipment and services.

So what do you think? Do you expect this to happen or do we all need to stop worrying so much?