Here are a few of my predictions for how 2011 will be remembered:

1. Passive television viewing starts a long slow slide to oblivion. Despite Google’s planned delay of its IPTV launch, 2011 will be the year where Internet Television hits the consumer market and a fundamental shift begins from passive to interactive TV viewing. At the same time—3D television will be a failure.

2. Tablet computing becomes the rage. Apple set the stage but 2011 will be the year when tablet computing becomes the preferred platform for viewing a whole variety of content—so much so that enterprises will begin extending their applications to accommodate the devices. About 15 percent or more of mid-to-large size businesses will have a tablet application deployed.

3. Near field communication technology will hit the market to eliminate the need for credit and debit cards for charging purchases.

4. Enterprise cloud computing adoption will begin in earnest. CIO’s begin to have confidence that moving pieces of their infrastructure such as office productivity tools and testing environments to the cloud makes business sense.

5. And sadly we will see a significant act of cyber terrorism. The electronic services of one country will be knocked out for at least 24 hours due to cyber terrorists or criminals.

[Editor's Note: This is part of a series of posts from Xconomists and other technology and life sciences leaders from around the U.S. who are weighing in with the top surprises they've seen in their respective fields in the past year, or the major things to watch for in 2011.]

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The longest recession in U.S. history officially ended in June of this year, according to the National Bureau of Economic Statistics. Yet people in Washington State, even in the technology sector, are still feeling the pinch. Between July and August of this year, our state lost more than 9,000 jobs, according to the U.S. Bureau of Labor Statistics. With so much fear about job loss and focus on job creation, one would never imagine that we are at the beginning of a talent crunch that could have ripple effects for years to come. One has to only look at the long list of vacant engineering and technical jobs on local job sites to see that despite tough economic times, there is still a shortage of available technical professionals.

And we are only at the beginning. By 2011, an 18-year-long wave of baby boomer retirement begins. While pundits and politicians are focused on the impact to Social Security and Medicare, they’re overlooking another looming issue, the technology and engineering jobs that will need to be filled when these boomers retire. The pessimists believe these high paying jobs will simply disappear. Others think the younger generation, already more technologically savvy, will be inherently better equipped to fill these roles. While no one can predict the future, we do know that between 2010 and 2025 an estimated 77 million baby boomers in the U.S. workforce — citizens born between 1946 and 1965, will begin to retire. It’s also known that many of those jobs are the highly skilled, technology and engineering jobs that fuel the Washington economy.

In fact, 50 percent of our current engineering workforce in the U.S. is about to retire. That’s a staggering number when you consider how dependent our state is on those jobs. If we are to continue as a leading home for innovative, technology based businesses, we need to prepare our workforce for the jobs of the future. Pacific Northwest powerhouse companies like Amazon, Boeing, and Microsoft are looking for people with training and knowledge in math, science, engineering, computers and technology. Unfortunately, our state’s educational system is not equipped to effectively train students pursuing these careers. And so the gap between the high paying positions and the unemployed grows.

One of the primary challenges is simply getting young people interested in technical subjects. Proving to kids that algebra or physics will be useful in the real world isn’t easy, but it needs to be done. We must not limit enthusiasm for science and math to kids who are raised by a Microsoft mom or a Boeing dad. Everyone, regardless of economic status, should be exposed to science and math from an early age and inspired to compete for jobs with Amazon, Boeing, and Microsoft. We should be fostering the next generation of Northwest innovators by getting them excited about the possibilities now.

The reality is, schools and parents can’t solve the educational challenges alone. Fortunately for families in Washington we have FIRST (For Inspiration and Recognition of Science and Technology), an organization founded by inventor and entrepreneur, Dean Kamen, that inspires young people to be science and technology leaders.

FIRST engages students of all ages through mentor-based projects that build science, engineering and technology skills as well as practical communication and leadership skills. Through a robotics competition where teams from around the state compete with their robots against one another in a sports arena setting, students are exposed to hands-on technical skills that help them understand the value of pursuing an education in science and math. Our state has seen tremendous year-over-year growth in its FIRST program and is leading the nation in terms of number of robotics teams with more than 100 high school teams across the state from Bellingham to Vancouver and Port Angeles to Spokane. And FIRST pays off. About 55 percent of FIRST Robotics Competition students pursue degrees in engineering or science, compared to only 28 percent for those who have not had a FIRST experience.

Despite deep budget cuts, Washington State legislators and Gov. Gregoire doubled this year’s FIRST budget for middle and high schools to $300,000. These government leaders understand that investing in STEM (science, technology, engineering and math) education will eventually boost the state’s technology-based workforce. Washington companies like Microsoft and Boeing have also been working with these legislators and with FIRST on solutions to the looming workforce crisis.

As leaders in the technology community, I urge you to participate and support FIRST. A child’s world is only as big as his parents, friends and community make it. Outside of funding, what a program like FIRST needs most are volunteers, mentors, teachers and support from Washington’s vibrant technology community. With a little time and encouragement, every single one of us can make a difference by showing our kids how to take advantage of the opportunities that lie in front of them. After all, the inspiration and direction our youth experience while in the 4 years of high school directly impacts their next 45 years in the workforce. Let’s work together to close the workforce gap and ensure a bright future for our region.

For information about mentorship opportunities and to find a FIRST team to support, visit the FIRST of Washington website’s pinpoint map that has contact information for teams in your area.

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The challenge currently before our Governor and Legislature to balance the Washington state budget in the face of declining tax revenues is not an easy one. No one envies the task of either cutting needed state programs or raising new taxes—yet this year we are faced with the prospect of both.

In the past 24 hours, the state House of Representatives has passed a bill that will create a new tax on a whole range of innovative software companies that are at the center of our technology industry. Without any input from industry, the House passed a version of Senate Bill 6143 that includes a new tax on custom software development—a fundamental shift in tax policy that could lead to job losses, business closures and new taxes on other professional services.

There are over 2,500 custom software businesses in our state and most of these are small companies—and many are independent and freelance consultants. These companies and their employees already pay over $150 million in state and local taxes and are held up as the kind of innovation businesses we want to encourage in Washington.

Yet this new tax scheme does just the opposite of encourage. Among the many problems:

* A slippery slope. Custom software has traditionally been considered a “professional service,” similar to attorneys, engineers, management consultants and other similar professions. This tax is a major departure from that classification system and puts us on a slippery slope to tax other professional services.

* New burden on small business. Unlike sellers of digital goods, custom software providers are not set up to take payments from customers by credit card, do not have e-commerce systems, and converting to a sales tax collection system will be burdensome and costly—resulting in frustration and likely business closures.

* Putting economic development at risk. Large customers of custom software companies will surely seek to lower programming costs by going to offshore providers, which could lead to job loss among local custom software providers. Custom software providers may decide to locate themselves in a neighboring state or province, thereby avoiding the burden of being a tax collector for the state, and instead put the burden on the customer to pay use tax, where compliance is traditionally less than for sales tax.

* The language is ill-defined. The technology sector is ever-changing. Is a Web design firm considered a “custom software” provider? Does any service done for a particular customer that uses software to produce that service fall under this provision? Confusion will rein and both the Department of Revenue and taxpayers will have endless discussions and arguments over tax liability.

Again…the challenge before the Governor and our Legislators is not an easy one, but this new tax is not the answer. If you agree with us, then please contact your State Senator and tell them to reject the house version of Senate Bill 6143. To follow our fight, please visit our Government Affairs blog.

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Likely you have heard about the large and growing budget problem we have in our state. Right now the gap between projected tax revenues and spending obligations is over $6 billion and it is expected this will grow by another $1+ billion by the next revenue forecast in March.

With this significant financial problem hanging over their heads you would expect that the majority of legislators would be spending their time trying to deal with making government more efficient, prioritizing spending, and finding creative ways to stimulate the economy. And most of them are.

Yet in the last few weeks a number of bills have been introduced that have nothing to do with economic recovery. In fact, many are taking direct aim at our technology industry with efforts to hinder the use of RFID technology, put state government in the middle of website privacy policies, and most disturbing—significantly changing how young technology companies get health insurance.

WARNING: Discussion of insurance issue to follow–may be arcane and sleep-inducing.

A little background is in order. The Washington Technology Industry Association (WTIA), like many other trade associations sponsors an Association Health Plan (AHP). Health insurance companies who work with Associations can use “adjusted community rating” to produce the rates and premiums they charge companies under AHPs which allows them to have flexibility from standard rating requirements. A report from a nonpartisan research firm indicated that AHPs are approximately 11% less expensive than the small group market plans. This is different than “community rating” where the pool is one very large group—in the case of an alternative to an AHP – this would be the “small group” market, which consists of all employers, in all industries that have 2 to 50 employees.

Both have advantages and disadvantages. If you buy your health insurance through an Association like the WTIA, you are in an AHP. If you buy your health coverage directly from an insurance carrier outside of an association plan and your company is under 50 employees, you are in the small group market. In the small group market, your experience is spread across a large group so rate increases could be lower if the total group has lower claims costs. But it could go much higher if the group has higher claims costs.

The same is true of AHPs, but under the law, health carriers can work with an association to design a plan tailored to that group, including wellness options and other incentives to be healthy. This allows the (smaller) group to control health care costs better and allows greater flexibility.

So where is this all leading?

Two bills just introduced in Olympia, House Bill 1712 and House Bill 1714 aim to remove the flexibility in the law that AHPs enjoy. Why? … Next Page »

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…is coming soon.

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