We all work on the network: How the network economy is changing the training industry - solutions technology

T+D, April, 2002 by Chris Charuhas

* Networks pervade the economy, changing the world of work and training with it. Training needs, types, and techniques are expanding and becoming more sophisticated, just like the network economy.

* The number of companies offering computer, soft skills, and management training has exploded. As the economy becomes even more wired, the need for training will increase.

* The Internet has fragmented the market for training as it did other markets, creating new niches for training companies and lowering the barriers for entry.

* The dot.com crash hasn't stopped innovation in the training industry.

Network technology accelerates that process. It took 30 years for mainframe computers to generate mega-industries that depended on them, but when personal computers were strung together in a global network, that network--the Internet--grew rapidly. It spawned billion-dollar industries, such as online stock trading and Web auctions, that didn't exist five years ago.

Networks now pervade the economy, changing the world of work and training with it. A trucker now needs more than driving school; she must know how to log onto getloaded.com to find cargo that needs to be shipped, then be able to compose a clear email responding to the shipper. Training needs, types, and techniques are expanding and becoming more sophisticated, just like the network economy.

Ever since the horse-drawn plow created crop surpluses that jumpstarted mercantile trading in medieval Europe, technology has driven economic change. London Business School professor Jeffrey Sampler explained how that works in his article in Netpreneur.org, "Find the Bottleneck and Own It." He describes how the economy grew when technology was applied first to production, then distribution, and now consumption. Using that framework, let's examine how technology has changed the economy, and training along with it.

The past 100 years

Production. In the 1900s, economic growth occurred when technology was applied to production. Industrial technology allowed manufacturers, such as Ford Motor Company, to turn out products by the millions, sell them cheaply, and become the biggest employers around. Mass production meant cursory training because factory jobs didn't require much training. Engineers and CEOs were educated in how to design machines and direct their use, while the vast majority of workers got a little training in how to rivet or weld. The lunch-pail worker learned how to do his job on the factory floor.

Distribution. In the 1950s, the fastest-growing sectors of the economy applied technology to distribution. Mainframe computers processed massive amounts of data for companies, such as Citibank, enabling those companies to build far-flung service enterprises that employed thousands of people. Computer scientists (the mainframe priesthood) and high-level managers got high-level training to design, operate, and plan the use of computers. Everyone else got a standard class on how to open checking accounts. The Organization Man learned how to do his job from the company manual.

Consumption. In 2000, technology became central to consumption. The Internet now allows customers to get more information, get it faster, and tell more people what they find. Someone surfs the Web to find the perfect pair of sunglasses among thousands of models, then buys them with the click of a button. If she gets a great deal, she emails her discovery to all of the people on her buddy list. Markets move quickly in the network economy. Technology-trained, communications-savvy people are needed to discover, exploit, and serve those markets. More sophisticated training is needed for more people who are further down the management pyramid. The proliferating knowledge workers learn how to do their jobs from classes, seminars, and discussion groups.

Training into overdrive

Management guru Peter Drucker coined the term knowledge worker to describe people who work with their minds, not their hands--the people who do most of the jobs in the current economy. But Drucker's distinction between mental work and manual labor was drawn in 1994, before the Internet explosion, and it's no longer valid. Consider the aforementioned Web-surfing trucker: It's apparent that even people who work with their hands must now be skilled in technology and communications. We're all knowledge workers now.

The network economy makes the jobs of even factory workers more Internet-oriented. That can be seen in the printing industry. Printers with ink on their hands used to print runs of 10,000 identical books using huge mechanical Heidelberg presses. Not anymore. That's because the book trade, like all markets, has fragmented into niches, accelerated by the Internet. In the past, 10,000 people would buy the same cookbook, but now 5,000 want New Age Cooking, 3,000 want The Buffalo Meat Cookbook, and 2,000 want Illustrated Vegetarian Delights.

Because large presses couldn't print small runs economically, printers bought smaller presses, and Heidelberg saw sales decline. So, it teamed up with Xerox to create print-on-demand equipment--smaller, computer-controlled units that can print 50 books as cheaply as big mechanical presses print 5,000. Those print-on-demand machines require operators who know how to use computers and the Internet because a print-on-demand job might go something like this: