Two trends are driving the current job market: globalization, where everybody is becoming part of the economy, and innovation, which increases productivity and allows fewer people to do the same jobs. These two trends will not slow down during the next few decades. How should students train in college to build careers under these conditions?

The situation is similar to 150 years ago, when 98 perecent of people farmed. Now we need only 2 percent of the population to look after the farms. The other 96 percent are engaged in businesses that did not exist 150 years ago. Similarly, the globalization of the workforce and the concurrent productivity gains will take care of people’s current needs. New graduates over the next decades will be part of businesses that don’t exist today.

What are these new businesses? We know that the world faces several big challenges such as energy, sustainability, poverty, education and healthcare. We need to solve these problems, but no one is sure how they will lead to specific businesses. This is the challenge and the opportunity for new graduates.

New graduates who want to be players in the new economy will need a strong work ethic, rigor in their thought process, and entrepreneurial energy. In the old economy, individuals mastered a specific skill and practiced it over the course of a 50-year career. In the next 50 years, new graduates will probably change their field of practice every 10 years. They need a good work ethic to be able to learn new things. They need rigor in their thought process to learn to learn. They need to be flexible and be entrepreneurial to adapt to new businesses.

No matter what students study, whether it is technology, journalism, art, medicine, business, or law, they will have to be entrepreneurial to survive and prosper in the next 50 years. In universities they learn to solve problems. In addition to solving problems posed by others, students need to learn how to pick problems that they are passionate about solving. A big part of being an entrepreneur is to learn to pick problems that you want to solve.

I am a big believer that students should create experiential learning opportunities during their university years. They should treat the whole world and its problems as their laboratory, as opposed to confining themselves to their campuses. Picking a problem that they feel passionate about and finding a way to solve it builds confidence and gives students a taste of taking charge. New graduates have to be entrepreneurial and innovative in creating opportunities for themselves as opposed to waiting for others to do it for them.

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We’re quickly moving to a new world where the wealth gap is compounding and increasing. We’re moving to a world that is going to look a lot like Hollywood: a few people enjoying insane success … and everyone else spends their days waiting tables.

The delta between A-players and B-players in companies has always been high. A-players get promoted faster and they earn more. My guess is that an A-player earns about 30 percent more than a B-player in that same position for most professions. An A-player administrative assistant usually can earn about 30 percent more than a B-player in the same position. That’s a significant difference and even more when you compound that difference in savings and lifestyle over the course of one’s career.

In some professions like sales and entertainment, an A-player might earn 300 percent more than a B-player and essentially live an entirely different lifestyle. In the future, everyone’s jobs will look more like salespeople.

Let’s focus on the profession I am most familiar with: software engineers.

Today, an A-player software engineer has a lot more job prospects than a B-player. That seems obvious. But there are plenty of B-player and C-player engineers that work at great companies and get paid well. Their services are needed and important. And while they don’t make the contributions that an A-player makes, they still are very valuable to a company and have a lot of importance to the success of an organization.

But things are changing (queue in the Darth Vader music).

There are three forces that will drastically change work, compensation, and our value to each other forever:

1. A productivity boom will automate B- and C-player work.
2. Globalization will commoditize B- and C-player work.
3. A-players can have much more impact.

The productivity boom will automate your job.

Everyone is massively more productive today than they were just a few years ago. A salesperson can use tools like Salesforce.com to track customers, LinkedIn to find prospects, and they can easily call and send documents from the road with their iPhones (unless they are on AT&T). The Internet makes all of us extremely productive and automates parts of our jobs.

In the 1990s, I was a software developer and I remember writing a script to determine if a string was a valid e-mail address. It took about 12 hours for me to write. First, I had to research what could and could not be in an e-mail address (dashes are ok, commas are not, only one “@” symbol, etc.) and there were a bunch of corner cases that I had to guard against and test against. After coding into the night, I finally came up with something I was proud of.

Today those 12 hours of work would take about 1.2 seconds. There are hundreds of libraries that have been written by really smart people and tested by thousands of programs. All one has to do is … Next Page »

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Consider these five trends, and then ask yourself what kind of Internet business you would create to exploit them.

1. Persistent economic uncertainty, leaving employers unwilling to hire lots of new permanent employees—but needing to get work done nonetheless.

2. The emergence of outsourcing as a mainstream, accepted, even expected corporate practice.

3. A growing number of people with home broadband connections for doing computer-mediated work and easy access to remote collaboration tools like Skype, Box.net, Basecamp, and Github.

4. More workers choosing (not necessarily being forced) to work from home as career contractors.

5. The interconnection of banking and financial systems around the world, making it more practical to transfer payments internationally.

Well, obviously, if you were thinking like an Internet entrepreneur, you’d want to go out create some kind of online service that helps businesses find, manage, and pay remote contractors, whether domestic or foreign, and then take a cut of the action.

But as it turns out, you’d quite possibly be too late: a company called oDesk created just such a service in 2005, and it’s now built up such an impressive lead over rivals such as Guru and Elance that it may be unstoppable. The six-year-old Redwood City, CA, startup has been growing its business at 100 percent per year for the last three years, and is now the world’s largest online employment platform, with more than 1 million contractors and employers signed up in more than 150 countries.

ODesk’s services, which include a hiring marketplace, tools for monitoring contractors’ hourly work, and a backend for handling payments across national borders, have been “a hit from the beginning,” says Gary Swart, the company’s CEO. But the venture-funded startup has also been the beneficiary of some huge and unexpected shifts, especially the global economic meltdown of 2008-2009. “The winds got stronger, fueled by the economy, the Internet, and globalization,” Swart says.

Barring the collapse of the Internet, a drastic drop in unemployment, or a sudden end to globalization, oDesk seems positioned to keep growing for years to come—and perhaps to eventually earn a nice return for investors Sigma Partners, Globespan Capital Partners, Benchmark Capital, and DAG Ventures, who have put $29 million into the company. With 38 full time employees of its own, the startup may or may not be breaking even yet, but … Next Page »

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As Don Corleone said in The Godfather, “A man who doesn’t spend time with his family can never be a real man.” If that’s true, then a Seattle company called Cozi should help quite a few people become real men.

Cozi is a tech startup focused on family-related software for the home. That includes things like online calendars, shopping lists, to-do lists, message boards, and family journals for sharing family memories and photos. These are the kinds of things, the company reasons, that busy families want to have to keep the trains running on time, and which most still do with paper and pen, or a physical bulletin board. Cozi puts it all online.

But there’s something deeper here. Cozi’s mission statement is to help family members improve their relationships with each other, through its software. I’m paraphrasing, but this is essentially the company’s 10-year “audacious goal.” It’s posted on the wall of Cozi’s meeting room at its headquarters in the Smith Tower near Pioneer Square. The place feels like a comfortable living room, as CEO and co-founder Robbie Cape pointed out when he showed me around. I came away with a strong sense that Cozi is a family, not just a company. And that if Cape were in a Godfather movie, you’d call him Don Cozi. (I’m kind of hoping that sticks.)

In any case, a sweeping mission to help families is all good—and atypical of tech startups, where 80-hour weeks and product focus are the norm. But it’s one thing to have a noble mission, and another to deliver on it. That’s why Cozi is interesting right now: for the first time, it can see a viable path to achieving its mission. “We are only now starting to see signs that the vision we had when we started the company can become a reality,” Cape says.

Cozi seems to have surged ahead of most startups in family organization software, including Fircle, Famundo, and Nesting.com. Seattle-based Trumba started as an online calendar service for families, but has switched to focusing on businesses and other organizations. Meanwhile, most big companies like Microsoft and Google don’t focus on family software because to them, the market is too small.

Being privately held, Cozi doesn’t disclose its financial performance and growth rates. But here are some hints of success. Cozi’s software now comes pre-loaded on all Dell machines. It has … Next Page »

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“Language lessons,” says the Korean sportscaster in his Howard Cosell voice at the end of Better Off Dead. It’s what allowed Lane Meyer (played by John Cusack) to ski the K-12 on one ski, and 23 years later, it’s still the key to building relationships in global business. So when we heard on Friday that Livemocha, a Bellevue, WA-based online language-learning startup, had won the NWSource People’s Picks 2008 award for “favorite startup,” we were eager to find out more.

Livemocha beat out 10 other fellow finalists including AdaQuest, Evri, and Xconomy (yes, really—we have no idea who voted for us, but thank you). Last year’s winner was Zillow, so Livemocha is in good company. The NWSource writeup cites Livemocha’s “model of diversity, with employees from India, China, Japan, Iran and the Ukraine, to name a few,” and its “very robust Ping-Pong culture.” Evri, for its part, has a Ping-Pong table, but not a Ping-Pong culture, according to one employee. Here at Xconomy, we have none of the above, but we’re working on it.

But seriously, Livemocha has been steadily building its Web 2.0 e-learning service, which lets users around the world chat in their native language online and by video with people who want to learn foreign-language skills. The year-old startup, led by co-founder and CEO Shirish Nadkarni, has garnered lots of media attention and surpassed one million registered members in September. Last January, Nadkarni announced Livemocha had closed a $6 million venture round led by Seattle-based Maveron. (By coincidence, another investor is Sunny Gupta, whose new company Apptio we profiled today.) It all sounds like a perfect application for social networks, as long as the user interface is fun, reliable, and easy to use.

No word yet on whether I can find someone to teach me that Howard Cosell accent, but there are at least 11 major languages on offer…

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This morning, I stopped by the panel on venture capital in cleantech, at the Renewable Energy Finance Forum-West conference at the Grand Hyatt in downtown Seattle. It was moderated by Nancy Floyd of Nth Power and Michael Butler of Seattle-based Cascadia Capital (who’s an Xconomist). The panelists were Raj Atluru of Draper Fisher Jurvetson, Anup Jacob of Virgin Green Fund, and Brad Zenger of Pivotal Investments.

The panelists were optimistic, but also grounded in reality. They touched on their investment strategy, how they position themselves against the cleantech-deal competition, and their favorite areas of investments. Here are my quick Top 10 takeaways from the session:

10. Record investment levels in energy. New records were set in the third quarter for investment in cleantech, with $2.6 billion invested globally, $1.8 billion of that in North America, according to Butler of Cascadia Capital.

9. Cleantech isn’t a sector. It’s many different sectors with very different markets. To name just a few: solar, wind, geothermal, other renewables, biofuels, energy efficiency, green buildings, smart grid, waste, recycling, water.

8. Solar is king. The king is dead. Long live the king. Solar energy has been receiving more than 40 percent of cleantech investments. Yet none of the panelists talked about solar as being their most exciting plays. “We’ve placed our bets in solar already,” said Atluru of Draper Fisher Jurvetson. “You’re going to see solar drop off. People are moving into other categories.” Yet there are clearly still opportunities, as production costs are falling, said Zenger of Pivotal Investments.

7. Biofuels 2.0 is “emerging from the ashes,” said Butler. After the high-profile problems of Seattle-based Imperium Renewables, next-generation biofuels are starting to come on, though the panelists expressed caution because of the high fixed costs needed to build refineries and other infrastructure.

6. Smart grid is getting a lot of attention from info-tech investors, in part because it’s capital-efficient. Waste, water, and recycling aren’t getting as much investment as they deserve, but that may change given the enormous market opportunities worldwide.

5. Because of the downturn, investors are much more cautious about cleantech and other technologies. “We have to sacrifice growth to get to cash flow,” said Jacob of Virgin Green Fund. “We’re only doing deals with revenues and cash flows. We’re very focused on market risk.” Larger energy projects, ones that swing for the fences, may suffer for the next couple years, said Atluru. Also, he said, time horizons for exits have increased to 7-9 years, up from 5-7 years not too long ago.

4. It’s a time of great opportunity. “The needle has moved from optimism to skepticism in cleantech. We’re looking for big winners… and not shying away from failure,” said Atluru. “We expect to see 30 percent [of our companies] not make it. If they all succeed, we’re not taking enough risk.” Zenger, of Pivotal Investments, added, “This is a great time to work with customers. A new company carries its own oxygen and doesn’t depend on the greater markets.”

3. Declining oil and natural gas prices may lead to less investment in certain energy technologies like waste gasification and wind power.

2. Entrepreneurship in the U.S. and around the world is very strong. The energy sector “has globalized really, really quickly,” said Atluru. “The enthusiasm of entrepreneurs in this sector is an order of magnitude higher than any other sector. We’re seeing entrepreneurs who have done it in other sectors, and they’re not going back.” And the panelists agreed that entrepreneurs are ahead of investors when it comes to dealing with the economic downturn.

1. A final thought to the audience. “Don’t give up,” said Zenger. “This is the time to invest in the next cycle.”

[The filing of this story was delayed by a drained laptop battery and lack of power outlets. I'm sure there's a renewable energy lesson in there somewhere---Eds.]

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Being the leader of the pride, it seems, doesn’t guarantee you a nice meal everyday. Waltham, MA-based Lionbridge Technologies (NASDAQ: LIOX) may be the world’s largest provider of localization services, helping hundreds of other companies from Microsoft to Merrill Lynch to Pfizer go global by translating their websites, product manuals, software programs, and drug warnings into other languages. But it sure isn’t getting rich doing it: On May 6 the company reported a net loss of $4.4 million for the first quarter—its third straight quarterly loss—and last Friday Lionbridge stock dipped to $2.37 per share, its lowest point in more than five years, and down 61 percent compared to a year ago.

That’s lower than even the most pessimistic analysts were predicting at the beginning of 2008. As the financial website 24/7 Wall Street put it in a catty post recently, “It looks like the lion’s roar is a meow, at best.”

It’s a frustrating reversal for a company whose CEO, Rory Cowan, was being lionized (that’s the last cat pun, I promise) just three years ago for putting together a $180 million deal to buy one of its main competitors, the Global Solutions unit of New York-based Bowne & Company. That acquisition vaulted Lionbridge into the ranks of Boston’s 60 largest companies. And it’s a puzzling state of affairs, given that the company’s revenues are large and growing—a record $117 million in the first quarter, up more than 8 percent from a year earlier. But no matter how high the company’s revenues go, its expenses seem to go higher.

One answer to the puzzle seems to be that Lionbridge’s expansion has put it at the mercy of the same twin forces—technology and globalization—that drive demand for its services.

Analysts who follow localization services—a $12 billion industry in 2007—point out that translation is still a labor-intensive process, and that Lionbridge’s strategy of employing hundreds of managers, engineers, and translators in expensive regions like Europe may be backfiring with the weakness of the U.S. dollar against the Euro and many other currencies.

And while Lionbridge has made a significant investment in technology—especially on work-flow automation and memory systems that save labor by identifying material that’s already been translated—it hasn’t really profited from that spending. “What has happened is that the benefits of the efficiency gain that Lionbridge has been able to produce through the use of technology have been handed right to the client” in the form of prices that have stayed flat despite global inflation, says Ben Sargent, content globalization strategist at Common Sense Advisory, a localization market research firm in Lowell, MA.

It wasn’t supposed to be this way. Lionbridge, founded in 1996, has spent hundreds of millions of dollars on acquisitions and other growth strategies, and has the client list (Bayer, Cisco, DuPont, GE, Google, IBM, Merck, Merrill Lynch, Microsoft, Morgan Stanley, Nokia, Pfizer, Sony, and Wal-Mart are a few of the big names) and revenues ($452 million in 2007) to show for it. With 4,600 employees in 45 offices around the world and a network of 25,000 freelance translators skilled in more than 200 languages, the company is three times the size of … Next Page »

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We got an interesting e-mail on Tuesday from the global communications staff at IBM. The company was concerned about the message some readers might be taking away from an economic report published last Friday, the Massachusetts Technology Collaborative’s 2007 Index of the Massachusetts Innovation Economy.

That report’s executive summary emphasized the growing challenges for Massachusetts companies in the face of international competition, and it listed IBM, alongside General Motors and Microsoft, as one of several U.S. companies expanding its global footprint and hiring large numbers of employees in places like India and China. In their note to us, IBM staffers expressed concern that readers of the summary might peruse that section and question Big Blue’s commitment to employment and innovation in Massachusetts.

Curious about the scope of this apparent spat between one of the Commonwealth’s leading economic development agencies and one of its largest technology employers, I called up both organizations. In the end, it seems, everybody’s still friends: the Massachusetts Technology Collaborative didn’t mean to imply that IBM’s global expansion is hurting the state, and IBM isn’t feeling irreparably wounded by the report’s language. But the whole conversation is an interesting case study in the politics of economic development in Massachusetts, and in large U.S. companies’ sensitivities to even indirect suggestions that they’re shipping jobs overseas.

Here’s what the report’s executive summary actually says about IBM: “The rules of the game for research and development investment, market access, and competition in and among states, regions, and countries are in flux…Evidence of these sea changes abound….IT services and hardware giant IBM counts more than 50,000 employees in Bangalore (the greatest concentration of employees outside the US) and went so far as to hold its annual investors conference there in 2007, an event historically and exclusively held in New York.”

I talked yesterday with Mohamad Ali, IBM vice president for business development and strategy, who said he was “a little bit surprised” by that wording. He pointed out that over 5,000 of IBM’s 250,000 employees worldwide are in Massachusetts, making it one of the state’s 20 largest employers; in fact, the new campus it’s building in Littleton and Westford will be the largest IBM software development lab anywhere in the world. “I think you’re seeing our non-U.S. employee population increasing, but you’re also seeing our U.S. population increasing,” Ali says.

“Yes, the reality is that the world is becoming a more competitive place, but I don’t think we are looking to abandon our core position here at all,” Ali continues. “IBM is an American company. We are based in New York and we have a large presence in Massachusetts, and we expect to continue to grow that. The reality is that there are substantial intellectual assets here and we continue to leverage that, and I don’t think the fact that we also have grown our India and China operations means that there is a tidal wave of offshoring.”

Next I called the Collaborative and ended up speaking with Mike Tavilla, the organization’s program manager for research and analysis and the lead author of the Index (a dense, chart-filled, extremely informative report that the Collaborative has been publishing annually since 1997). “We are keenly aware that IBM is hiring people here and consolidating their software labs in the state,” Tavilla says. “We don’t mean to nominate IBM or any other company as a poster child for offshoring. What we are trying to show is that it’s now a condition of global business that activity is growing overseas.”

In fact, the term “offshoring” has acquired an unfairly negative connotation, Tavilla argues. “It’s a common mistake that offshoring is automatically perceived to be a net loss for Massachusetts and for the U.S.,” he says. “There is nothing to document that. In fact, I think it’s a good thing that companies such as IBM can take advantage of what other regions have to offer, be it work forces or raw materials or whatever they need to conduct their business more efficiently. If they can then reinvest those efficiencies back into Massachusetts, that’s clearly a good thing.”

To my own eye, it’s a slight stretch to read the Index’s executive summary as explicitly taking IBM to task for moving U.S. jobs offshore. On the other hand, the statistics about IBM’s hiring in India are part of a passage about the challenges of globalization whose tone might fairly be characterized as defensive or alarmist. Either way, it’s clear that IBM wants the local community to understand that it’s here in Massachusetts for the long haul. And it’s equally clear that Tavilla and the Massachusetts Technology Collaborative think it’s important for the Commonwealth to stay engaged in the global economy.

The advisory board overseeing the production of this year’s Index actually included one representative of IBM, corporate community relations manager Maura Banta. But the board wasn’t asked to sign off on the report’s final language, according to Karen Lilla, a spokeperson for the global communications department of IBM’s Software Group.

“I don’t want you to think that IBM is feeling slighted,” Lilla told me by phone yesterday. “I just wanted you to understand that while IBM is a global enterprise, we do have these strong ties to Massachusetts.”

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