IBM offers Trump its ideas to Make America Great Again
Make America's CEOs write open letters again
Big Blue's big boss, Ginni Rometty, is hoping to dance on the tightrope that Big Orange has brought to the White House.
Trump's unexpected election puts the technology industry in a tight spot, because many associate it with the economic conditions Trump exploited throughout his campaign. Globalisation demonised as a destroyer of American jobs; the feeling that multinationals like IBM leave the mundane business of paying American tax to individuals and the looming threat of having your job automated away can all be laid at the feet of technology companies, with productivity upsides conveniently forgotten.
Before the election, many tech companies scoffed at the Trump campaign – or warned against it – which makes a rapprochement inevitable, and it's into this environment that Rometty has penned an open letter to the president-elect offering five policy suggestions from IBM.
Make those blue collars new
IBM's “P-TECH” schools model only graduated its first students this year, but Big Blue hopes it's (demonstrated enough success to be more widely adopted. Not everybody agrees the schools are a hit, as Fortune noted earlier this year, but Rometty says IBM hired “some of the first graduates” of its New York school and thinks that's a sign the incoming administration should adopt the model more widely.
Arguing that the tech sector needs vocationally-trained people as much as it needs college graduates, Rommetty writes that scaling up its model would create “a national corps of skilled workers trained to take the “new collar” IT jobs that are in demand here in America.”
Make great cities smart again
Digitising cities is an obsession among the likes of IBM and Cisco, not least because they'll need lots of hardware and consulting. So it's no surprise that Rometty calls for the incoming president to encourage states and localities “to build intelligent – and secure – roads, bridges, buildings and other public facilities”.
Healthcare? So much health. You'll health so much you'll get tired of health
IBM wants to update advice it gave to a much younger Barack Obama, from 2009, that the tech sector could trim $900 billion from the US health budget over ten years with analytics, electronic health records, and getting the government to put the squeeze on profiteering.
Rometty reckons the ideas are still worth pursuing, and tells Trump IBM can update its 2009 advice.
Government? It's a fraud. A really bad thing. Just ask Doctor Watson
Technology and fraud analytics – plus cybersecurity – will save $1 trillion, Rometty reckons, so the Technology CEO Council will dust off the recommendations it offered the Obama administration for another try.
Psst ... can we talk about tax?
IBM likes president-elect Trump's tax cut ideas a lot, and dangles a capital carrot: if he'll make US corporate taxes “competitive”, IBM will bring home all that money mouldering away in Bermuda or the Caymans, Ireland or The Netherlands). Today, bringing that money home would mean paying US taxes, despite some tax already having been paid in the countries it was raised. IBM promises, cross its heart hope to die, that if Trump sorts this out it really will spend repatriated cash on education and R&D. Really.
Watson's got spare time for war veterans
The letter wraps up with Rometty asking the administration-to-be to expand the collaboration, announced this year, with the Department of Veteran's Affairs, which uses Big Blue's Go-playing powerhouse to help with cancer treatment.
The full text of the letter is below. ®
Dear Mr President-elect:
Congratulations on your election as the 45th president of the United States.
Last Tuesday night you spoke about bringing the country together to build a better future, and the opportunity to harness the creative talent of people for the benefit of all. I know that you are committed to help America's economy grow in ways that are good for all of its people.
I am writing to offer ideas that I believe will help achieve the aspiration you articulated and that can advance a national agenda in a time of profound change. I do so as the leader of the nation's largest technology employer, its leading patent creator, and the company that for more than 105 years believed that prosperity and progress can be achieved by unleashing the potential of all people. Permit me to offer a few specific suggestions.
Creating “New Collar” Jobs
Getting a job at today's IBM does not always require a college degree: at some of our centers in the United States, as many as one third of employees have less than a four-year degree. What matters most is relevant skills, sometimes obtained through vocational training. In addition, we are creating and hiring to fill “new collar” jobs – entirely new roles in areas such as cybersecurity, data science, artificial intelligence and cognitive business.
You've spoken about the importance of vocational education, and we agree. IBM has championed a new educational model for the United States – six-year public high schools that combine traditional education with the best of community colleges, mentoring, and real-world job experience. The first of these schools opened with IBM's support five years ago in New York; we have hired some of the first graduates. There will soo be 100 such schools across the country. With your support, we could do much more. Let's work together to scale up this approach of vocational training, creating a national corps of skilled workers trained to take the “new collar” IT jobs that are in demand here in America.
Building Intelligent, Secure Infrastructure
You've said we need to invest in America's infrastructure, and we agree. As we build big, let's also build smart. The country should focus on infrastructure investments that incorporate Internet of Things (IoT) technology and artificial intelligence to improve performance. And as infrastructure gets smarter, it also increases the need for cybersecurity, so that vital networks cannot be compromised. We recommend that your infrastructure package include incentives for states and localities to build intelligent – and secure – roads, bridges, buildings and other public facilities.
Healthcare: Applying Lessons from Private Sector Experience
IBM operates one of the largest employer-sponsored health plans in the United States. In 2009, IBM offered 15 specific ideas for how America could save more than $900 billion over ten years through some common-sense reforms to the healthcare system, leveraging lessons learned in the private sector. These included using data analytics to reduce fraudulent Medicare claims, improving the exchange of healthcare information among providers, and leveraging the government's purchasing power to lower the cost of drugs and care. IBM will update its recommendations for the healthcare system and hopes to work with Congress and your HHS Secretary to drive better healthcare at lower cost.
Using Data to Fight Government Waste and Inefficiency
Eight years ago, IBM helped lead an effort to identify $1 trillion in savings the federal government could achieve through advanced data analytics, data center consolidation, and the use of cloud technologies to improve the cybersecurity of key government systems. As part of the Technology CEO Council of which I am a member, we will prepare an updated set of recommendations for how you could use technology and fraud analytics to save the government more than $1 trillion.
Bringing Money Home to Invest in America
IBM supports your proposal to make America's tax system more competitive. Many billions of dollars of American companies' earnings do not come home because of an outdated and punitive ax system. Your tax reform proposal will free up capital that companies of all sizes can reinvest in their US operations, training and education programs for their employees, and research and development programs. We will support the efforts of your administration and Congress to pass tax reform early in 2017.
Taking Care of Our Veterans – With the World's Best Technology
All of us at IBM share your gratitude and devotion to the men, women and families who serve our country. More must be done to give our vets the best medical care possible. So, we recently announced a pilot program with the Department of Veterans Affairs to help its oncologists treat 10,000 veterans through the power of precision medicine and genomic analysis powered by IBM's cognitive computing system, Watson. We hope to work with your VA Secretary to expand this collaboration.
Mr President-elect, IBM's roots are in the United States. We are investing, hiring, and continuing to reinvent our company for long-term competitiveness. At more than 50 major locations across the country, we hired more US employees last year than in the previous five years. We are opening new innovation centers and business units across the country. We are proud of the work we do here in the United States, just as we are proud of the work we do in more than 175 countries around the world.
In the years ahead there will be issues on which we can agree, and issues on which we do not. But as you prepare to take office as our new president, I hope the ideas I have offered in this letter represent ways that we can work together to achieve prosperity that is broadly shared in our society.
Sincerely, Ginny Rometty