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IBM Study: Education Lags in Preparing Students for Globalization and Sustainability

June 22, 2010

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 Students at ease with complexity, rely on data analysis

 -Today's university students are extremely concerned with issues of globalization and sustainability, but only four out of 10 believe their education has prepared them to address these issues, according to a new IBM (NYSE: IBM) study designed to gauge the attitudes and opinions of the next-generation global workforce and business leaders.

This first-of-its-kind survey -- which asked university students the same questions posed to global business leaders in IBM's 2010 Global CEO Study -- finds that both students and CEOs believe creativity is the most important emerging competency of future leaders; and reveals clear confidence about the ability of information technologies to address looming issues in business or society.

Conducted through IBM's Institute for Business Value, the Study, "Inheriting a Complex World: Future Leaders Envision Sharing the Planet," reflects the consolidated view of more than 3,600 students in more than 40 countries.

The study reveals a discerning and decidedly optimistic new ethos -- based on an integrated view of globalization, sustainability and belief in technology as a path to solutions to emerging and existing problems. Almost 50 percent of students said that organizations should optimize their operations by globalizing, rather than localizing, to meet their strategic objectives.

At the same time, these students describe a gap in this generation's training to cope with issues that will arise in an increasingly interconnected and complex world, but a strong belief that information technologies can bridge the gap.

Within four years, this "Millennial generation" will make up half of the global workforce. Despite the economic environment and the challenges students may face entering the current job market, the findings from this study were characterized by an unmistakably optimistic outlook about what's ahead – and their capacity to affect change in the world they will inherit.

Students surveyed indicated that they will lean more heavily on data analysis -- over gut instinct or existing "best practices" -- to reach their strategic and operational goals as business leaders in their own right. And as fact-based decisions begin to prevail, they may need to pioneer an entirely new management style -- one that continually enriches personal experience and education with new sources of insight based on a new ability deal with the explosion of real-time information.

The study revealed broad-based confidence that increased access to information, analysis, and the resulting insight can reduce uncertainty about the future.

Clearly, the students' experience regarding globalization is different. Growing up more connected globally, students see the shocks and threats, but are more prone to view globalization as an opportunity to solve increasingly global problems. They are strongly committed to a global view of shared responsibility for both environmental issues and societal prosperity.

The new IBM survey was conducted as an extension of the 2010 IBM CEO Study, "Capitalizing on Complexity," which discovered that today's chief executives are charting new courses of action in response to the increasing complexity of the world's business and competitive environment.

Students and CEOs

Students, for the most part, shared their views, and even agreed on very specific courses of action: embodying creative leadership, reinventing customer relationships and building more dexterous operating models.

Nevertheless, for all the areas of agreement between students and CEOs, twice as many students selected globalization and environmental issues as one of the top three factors to impact organizations and expected major consequences to business and society from a scarcity of resources. Bold positions like these came about because students clearly saw that globalization provides an opportunity for organizations to create new value.

Compared to all other regions, the views of students and CEOs on sustainability diverged most sharply in North America. Students there were almost three times as likely as CEOs to expect scarcity of natural resources to have a significant impact. They were more than twice as likely to select environmental issues as a top external force. And 60 percent more students than CEOs in this region anticipated that customer expectations for social responsibility will increase significantly.

"What these students are saying is that they understand the complexities inherent in a world that is getting smaller and more interconnected all the time, and the implications of those changes for their careers," said Ragna Bell, Associate Partner, and Strategy and Change Leader in IBM's Institute of Business Value. "As a result, they expressed some very different -- and powerful -- expectations about the responsibilities of business and governments, and by extension, for the paths their careers will take."

The Digital Deluge

Given that today's students grew up in a digital age, intuitively understanding that economies, societies, governments and organizations are made up of interconnecting networks, it may not be surprising that seven in 10 students experienced the new economic environment as significantly more complex today, compared to six in 10 CEOs.

But they saw far less volatility and uncertainty, in part because they were confident that access to more information could be put to better use, analyzed for patterns and predictive insights to solve the hardest problems in business or society.

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Students who saw significantly more complexity, or interconnectedness in the environment, were 50 percent more likely to expect significant impact from the information explosion and 22 percent more likely to believe that a focus on analyzing information for insight would be key to organizations' success in the future.

Views about the impact of the information explosion were fairly uniform across regions, except in China where students were 67 percent more likely to see a large impact than CEOs in China. Students in China were also far more likely to approach decision-making analytically, relying on facts more than instinct, or even experience.

Global Thinking, Local Views

Students' attitudes toward globalization were reflected in their expectations of leadership as well. Like CEOs, students selected creativity as the top emerging leadership quality for the successful enterprise of the future. But among the nine leadership traits CEOs and students were asked to select, students placed a higher emphasis on only two qualities -– global thinking and a focus on sustainability.

Given students' concerns about globalization and sustainability, the Study found a gap in educational experiences, as well as business expectations. Asked how well their education has prepared them in a number of areas, only four out of 10 students believe their education has prepared them well to address these issues.

In China, 76 percent of students value global thinking as a top leadership quality, more than students anywhere else. Yet, only 38 percent of students in China believe their education has prepared them for global citizenship, which is lower than students in any other region.

Only 17 percent of students in Japan, less than any other region, believe their education has prepared them well to benefit from the growth of emerging markets.

Understanding these and other sharp differences emerging by geography is increasingly important as economies and societies become more closely linked. Students will confront these differences as they increasingly become the future leaders of business and organizations.

About the IBM Institute for Business Value

The IBM Institute for Business Value, part of IBM Global Business Services, develops fact-based strategic insights for senior business executives around critical industry-specific and cross-industry issues. This Global Student Study is part of our ongoing C-Suite Study Series. For access to the full study findings and case studies, please visit: www.ibm.com/futureleaders.

To join the conversation about smarter leadership, please visit: http://smarterleaders.tumblr.com/.

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