Cisco's Chambers: It's all about survival

Cisco's Chambers: It's all about survival

Cisco Systems' head had a stark message for businesses -- embrace the Net economy as a means of survival. He also had harsh words about the US education system: Unless it improves, he said, the country may lose jobs to other nations.

"The Internet changes everything -- every company, every country is in transition," said John Chambers, Cisco's president and chief executive officer. "The real driving force is survival. You have to create a culture that thrives on change."

Chambers made his remarks in an address to the California Chamber of Commerce board of directors here yesterday.

"[US President] Clinton and [US vice president] Gore were slow to catch on to the Net. Now they get it," he said. The heads of Australia, China, South Korea and the UK also "get it" that they have to prepare their countries for an Internet revolution, otherwise they'll get left behind, Chambers added.

In the Net economy, people will no longer migrate to jobs, jobs will move to where the best educated people are, he said. "Our education system is not up to speed; we could get left behind," Chambers said, citing statistics that show the US trailing other developed nations in both math and science education. "Our children's jobs will go overseas."

"My personal view is that our education system is broken," Chambers said. "Singapore has the best education system in the world and every school and home is connected to the Net. If we don't fix our system in the next decade, we will run into problems."

The way to fix the US education system is e-learning, Chambers said, an issue he also talked about in his keynote address at the Comdex trade show in Las Vegas last month. The key about e-learning, which is still in a very early stage, is to think imaginatively about how best to use the technology and how the roles of teacher and student will change. "The teacher becomes a knowledge agent and the student becomes selective in the knowledge they need," Chambers said.

Businesses will play a leading role in kick-starting e-learning, since they have a competitive reason to use the technology to help train and retain staff, he said. Today's e-learning applications are mostly "terrible and based on talking heads", Chambers said. "For example, Wal-Mart uses an application for training its staff which could've been written by an IBM mainframe."

He referred to Cisco's own experiences to highlight how using Internet-enabled applications has helped the company automate its processes and save money.

Currently, the networking company does 80 per cent of its customer support via a Web-based architecture, a process that took five years to achieve, Chambers said. If Cisco hadn't gone the Net route, the company would have had to employ 2000 people within 18 months. By avoiding that increase in headcount, the vendor saves $US600 million in expenses per year, he said.

Returning to a much bigger picture, Chambers said that within five years the Net will have created a level playing field for competition around the world. Basic industries such as coal mining won't be left behind, but will be able to compete globally in a way they were never able to before, he said.

"PCs are the only products priced consistently around the world," Chambers said. "Countries will not be able to put a 50 per cent premium [on goods] to protect local businesses because consumers won't tolerate it."

In politics, the Net may be able to woo disenfranchised voters such as young people, Chambers said. In 2004, the Net will have as profound an impact on the US election as television did on the 1960 Kennedy versus Nixon race to the White House, he added.

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