March 20, 2012; Source: Harvard Business Review Blog Network


In a recent Harvard Business Review blog post, PricewaterhouseCoopers Chairman and Senior Partner Robert Moritz identifies a fundamental—and often overlooked—barrier to U.S. economic growth: The great mismatch between skilled jobs and the talent needed to fill them. According to Moritz, the failure to find tech-savvy talent is preventing U.S. companies from innovating their way out of their current financial doldrums. A survey by Moritz’s firm found that 57 percent of U.S. CEOs said that creating and fostering a skilled workforce should be a top government priority. Nonprofit leaders should agree with this position.


The sub-prime mortgage meltdown that has swelled the unemployment ranks is dwarfed by the ongoing effects of the digital transformation of world markets. This transition started well before the financial crisis and will likely continue long after. In the U.S., the issue of the pervasive lack of technology adoption within low income, rural, minority, and other underserved communities is almost solely couched in terms of the divide between technological “haves” and “have nots.” While social equity and economic justice remain critical dimensions of the issue, there is not nearly enough attention paid to the impact of the digital divide on the overall economy.


Metcalfe’s Law states that each additional node added to a network provides greater value to the network as a whole, but the obverse is also true. Leaving broad swaths of the population out of the digital economy not only harms the technological “haves nots,” but also constrains the technological “haves” from benefitting from the potential network effects of including these communities. This means all of us are now feeling the pain of the digital divide—American CEOs of the one percent included.


The digital divide shows up in the imbalance between available jobs and a workforce with the skills to fill them. Current online postings for computer and mathematical occupations outnumber job seekers three to one, according to the Conference Board. It also shows up in a lack of participation and readiness for science, technology, education, and math—or STEM-related—education, which has been steadily receding (particularly for low income women) relative to non-STEM degrees. And it shows up in a constraint on U.S. gross domestic product (GDP) due to a lack of digital access to domestic markets left offline. Every 10 percentage point increase in broadband penetration increases GDP by one percent, and doubling broadband speeds increases GDP by 0.3 percent, according to studies by Arthur D. Little and Ericsson. Yet nearly 100 million Americans (about one-third of the population) lack access to high-speed Internet.


Whether it’s educating young people in STEM-related skills through after-school programs, preparing people for 21st century jobs through workforce development programs, or advocating for a comprehensive national broadband plan, nonprofits need to be at the forefront in bringing our communities into the technological mainstream. What’s more, the nonprofit sector needs to do a better job in making the case that when more people in the U.S. are brought into the digital economy, everybody wins. Even CEOs. –John Hoffman