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'Low skills, low wages don't generate prosperity'

Paul Ahlstrom recommits to training 1000 Jamaican software engineers per year

BY KEITH COLLISTER

Sunday, October 20, 2019

At Jampro's 'Future of Work' conference at AC Marriott last Wednesday, Utah-based venture capitalist Paul Ahlstrom (the founder of venture capital firm Altaventures) renewed his ambitious promise to train 1000 “full-stack” Jamaican software engineers per year made at the June Development Bank of Jamaica conference on 'Private equity, Infrastructure, Entrepreneurship and Innovatio”'.

To achieve this, he is working on bringing Utah-based computer coding school Bottega to Jamaica, as detailed in my previous Observer article 'Igniting Jamaica's venture capital industry the Paul Ahlstrom way'.

The timeline has slipped a little, and he now expects the AltaDev Bottega Coding Bootcamp to start up in the first quarter of 2020. AltaDev plans to train full-stack engineers on the popular computer coding languages Python and React (Java script).

Ahlstrom's condition to start, in line with his “Nail it, then Scale it” methodology outlined in the book of the same name of which he is co-author, is to verify local demand for this increased output of software engineers (currently he reckons Jamaica is training and graduating approximately 200 software engineers a year – clearly not enough), a process that is now ongoing, working through Jampro, as well as getting US$250,000 in matching funding and space, with the latter two conditions apparently well underway.

He followed a similar philosophy in seeking matching local funding for his support for Jamaican universities' involvement in the international business model competition, which has now seen our students achieve great success.

In his view, worldwide, the traditional education system is broken and misaligned, both too rigid and slow to adapt. The education system needs be more aligned to market needs.

Students are now graduating with huge debts and a skill set that is out of date with what industry needs.

AltaDev plans to change the model in Jamaica, taking the risk of educating the student and making sure the skills the students are learning are in line with what the market needs.

In training, Ahlstrom believes Jamaica shouldn't just focus on building student resumes but emphasise making real business connections, with students connected to real business opportunities through internships while studying (apprenticeships and mentoring is critical).

 

BPO VS INNOVATION ECOSYSTEM

Ahlstrom used the example of Utah, a state with the same population as Jamaica which, 20 years ago, was experiencing a population boom. The governor at the time, concerned about where the jobs were going to come from, started recruiting call centres and outsourcing companies to come to Utah.

It was quickly realised however that while this was a good “anti – starvation” strategy, it was not a “wealth-creation” strategy. In brief, outsourcing was a good place to start but “low skills, low wages don't generate prosperity”, notes Ahlstrom. He observed that he was just in the Philippines, where they were having the same conversation about BPO.

So how do we solve hard systemic problems, he asked rhetorically.

In Utah, they established a common shared vision. Through more than 140 meetings over several years, a group of Utah leaders established a unified vision to enable real change to the entrepreneurial environment. It was discovered that complex social problems can't be solved by single programmes, organisations, or even sectors alone. This required five conditions for collective impact — a common agenda, shared measurement, mutually reinforcing activities, continuous communication, and backbone support.

Utah set a state goal to double the number of engineers. They did it, but it still wasn't enough. Working on all these factors together allowed Utah to sharply increase its venture capital dollar creation eventually by several hundredfold (Utah is now third in the US per capita), with Utah creating first hundreds then thousands of higher-paying tech jobs at new start-up companies.

In short, Ahlstrom argues, Jamaica's focus needs to be on creating an innovation ecosystem.

He quoted famous venture capitalist Mark Andreessen's remark “software is eating the world”. In his view, Jamaica could effectively achieve “full employment” in a few years through creating tech and coding skills for employees to enter the global economy, and the associated spin-offs.

Quoting also from Harvard Business School Professor Clayton Christensen's new book Prosperity Paradox, Ahlstrom believes Jamaica needs to build new “hero companies”, or unicorns (enterprises valued at US$1 billion or more) to grow our economy.

Local hero companies would help create many additional needed services and economic stability.

In other words, focus on “non consumption“ or greenfield opportunities, and generate native tech companies or high-potential new industries that become the new engines of the economy.