First Commencement


Hannover, Germany

Friday, July 7, 2000

Dr. Heinrich V. Pierer
President and Chief Executive Officer Siemens AG


Minister President, President Beering, Graduates, Ladies and gentlemen:

In your program my speech is described as a "Laudatio." So I will immediately do the honors and heartily congratulate you on earning your MBA degree. You have worked hard over the past eleven months and have certainly given up quite a bit for your studies. You have learned a great deal. You have broadened your knowledge and skills. And you have successfully passed your exams. I think you have every right to be proud of what you have accomplished here in Hanover. Johann Wolfgang von Goethe once spoke of "Weeks laborious, feast-days gay" in a lovely poem titled "The Treasure Digger." Today is truly a "feast-day gay."

Here in Hanover at GISMA we certainly are not seeing part of the "cultural historical museum" that media and education expert Peter Glotz believes Europe is in danger of becoming. Glotz presents a rather provocative thesis in his most recent book "Die beschleunigte Gesellschaft" (The Accelerated Society). He believes that Europeans face the prospect of playing only a minor supporting role in the Internet economy of the 21St century. The primary reason for this is that Europeans are neglecting their top universities. "It is," he writes, "as if Europeans are stoically looking at their destiny to become a cultural historical museum."

This is obviously quite exaggerated. And it was intended to be. For despite a general proclivity for inertia, there is in fact considerable movement at our universities these days. And solid progress has already been made, including shortening the duration of studies, introducing internationally recognized academic degrees like Bachelors and Masters, offering courses in English, and establishing private universities like GISMA. I believe these efforts should be honored. Glotz's book does make one thing clear: international benchmarks in education are found in the U.S. and no longer - or not yet again - in Europe or specifically in Germany.

This is a matter of serious concern, for I am convinced that the quality and efficiency of our educational system are decisive factors for the future of our country. They determine our chances for the future. Or more precisely: they determine the quality of life of our children and grandchildren. They decide whether we will continue to belong to one of the prosperous generations, or whether we will fall back into mediocrity. Germany is a country of high wages, high environmental and social standards, and generally high costs. And this isn't likely to change in the future. If we want to differentiate ourselves in global competition, we can scarcely do this with competitive prices. We have to offer something else that makes us attractive. We must be more innovative than others, offer better products and services, and bring these to market faster than anyone else. And we can accomplish this only with the help of people with an outstanding education.

Henry Ford once said:

"A country's competitiveness doesn't begin in a factory hall or a research lab. It begins in the classroom. "

In our globalized world, however, it is no longer enough if this classroom is oriented exclusively to Germany. Our classrooms have to attract intelligent and capable young people from every part of the world. Because education systems are also in global competition. And this competition is about one thing: attracting the best and brightest. Not only from one's own country, but from around the world. It is an unfortunate fact that German universities are no longer the first choice for the best and brightest international students. Right now, around 100,000 foreigners are studying in Germany. According to the President of the University Rectors Conference, however, we need at least twice this number. Even more sobering and critical is the fact that less than half of these 100,000 students would have come here if they could have freely chosen the country where they could study. The top choice is clearly the U.S.

What must we do, then, to make our universities interesting and attractive for the world's best students? I believe we are talking basically about two themes:

First: We have to substantially accelerate and intensify the reform of our educational system in Germany. And second: We must further expand possibilities for life-time learning - both within companies and through the government and business associations. In both of these points, private universities like GISMA play an important role.

What do we need? First of all, we have to have an educational system with internationally competitive curricula and degree programs. This is particularly true for our universities. Their current problems are well-known. Above all, their degrees are not internationally compatible and there are language barriers. In short, not enough courses and lectures are held in English. The duration of studies is also far too long, and there is inadequate support for foreign students.

How can we improve things here? Let me put it in simple terms: We have to trust our universities and give them greater autonomy. And most importantly, we have to expose them to greater competition - among them and within them. If we do this, I believe the rest will take care of itself. Some universities will turn out to be more competitive than others. This will show up fairly quickly -- and help us get moving. And if we have the courage to discuss the issue of tuition fees and the limitation of teaching contracts - to give teachers an incentive to perform - then quite a bit would change for the better.

Competition also means accrediting private universities and educational institutions. Outside Germany - and by no means just in England and the U.S. - it has long since become common practice for private institutions for compete for students. Despite this hard fact of life, private universities in Germany are still regarded - let me express this diplomatically - with certain misgivings.

This was quite obvious at the opening of GISMA last year. At the time, a certain political group spoke condescendingly of a "talent forge for big business" that ignored the needs of small and medium-sized businesses. Because of this supposed bias, state support was an "incomprehensible waste of resources."Of course this is wrong. The fact is, small and medium-sized enterprises also benefit from what GISMA offers. After all, MBA graduates don't work exclusively for big corporations. And I believe such arguments are fundamentally wrong to begin with. The sad truth is that we have an enormous ways to go in Germany when it comes to having private universities which can compete with those in the U.S. - on both the undergraduate and postgraduate levels.

Rigorous promotion of the intellectual elite is also a key part of an internationally competitive educational system. Private institutions like GISMA are a critical component here, because they drive competition. And competition, as we all know, is the best driver of top performance. Fear of contact with - or even rejection of -private universities, perhaps because of a false understanding of social equality, are absolutely uncalled for.

We at Siemens, by the way, are also deeply involved with our own academic institutions. We have established so-called Technical Academies in Berlin, Erlangen and Munich, and added Dusseldorf to the list last year. Right now we offer some 650 young people a practice-oriented alternative to traditional engineering studies. Holders of a baccalaureate, or German Abitur, can complete a two-year degree in a field we call industrial technologies. And this can be followed up with additional studies for a normal Bachelors degree. We started out with 650 participants in our program and expect the number to grow to over 1,000 shortly.

Ladies and gentlemen:

Knowledge gained in the course of an education is crucial for successfully entering the working world. That is obvious. But each of you must remember - even on days like this when everything seems fresh and new, and the world lies before your feet -that this initial database will never be sufficient for an entire professional career. The pace of change in markets, customer requirements and technologies is accelerating at breathtaking speed. Knowledge acquired at a university gets stale after a mere three to five years. An Internet year, symbolic for today's speed, lasts only three months.

This is why I feel - and we have reached my second point - that the classic division of "first education, then career" is no longer relevant. Today we must be prepared to embrace life-long learning. And everyone is responsible for this, not just companies. The state as well as professional associations must commit themselves to encouraging continuing education throughout a professional career. At Siemens, for example, we spend over DM900 million every year for vocational training and continuing education, including some DM700 million in Germany alone.

Life-long learning means that people must permanently update the knowledge base they acquired during their formal education. And they must constantly add new qualifications in order to broaden their range of operations and keep pace with changing market needs.

This means, in part, steadily expanding and supplementing know-how in their own field of specialty. In short, keeping up with developments in their profession. But that isn't all, by far.

Today, employees and especially managers have to grasp far more than just their own field. The global economy keeps demanding new key qualifications. Our research and development teams, for example, have long worked across all geographical and time barriers. For this kind of networked teamwork to be a success, efficient and collegial cooperation is a must. In other words, one also needs social competence.

Postgraduate studies like the MBA here at GISMA give professionally experienced, eager high potentials valuable additional qualifications they need in the real world of business. You have not only been given the necessary background in economics, finance, marketing and management, but have learned how to work in a small international team. A solid MBA program, then, offers both professionally crucial knowledge and a healthy dose of social competence.

Such supplementary qualifications help ensure an individual's employability. And this, ultimately, is the most effective protection against unemployment. In a globalized economy, we have to give up the illusion that companies can - or will - provide their employees life-long employment.

Mark Twain once summed it up nicely: "Education," he said, "is what's left when your last dollar is gone. "

As MBA graduates, most of you probably have a job already. So perhaps this little story in closing really doesn't apply to you. On the other hand, it may help out when you apply for a new job sometime in the future. A valuable little tip, so to speak.

A fresh MBA graduate applies for a job at a big company. At the end of his interview, the human resources manager gets around to the big question: "What kind of starting salary were you thinking of?" "Oh, around 250,000 marks a year," answered the candidate, "depending, of course, on the extras you offer me. "The manager thought for a moment. "OK. ! can offer you the following perks: eight weeks of paid vacation, full private medical coverage, a company pension at 90 percent of your final salary, and a new company car every two years - say, a Porsche. "The young guy looked a bit startled, then grinned from ear to ear, "That's fantastic!" he replied. Then he paused and asked hesitantly: "Are you joking?" "Sure," answered the manager, "but you started!"

My point is: a good degree alone isn't enough to guarantee you the sun, moon and stars. But a good degree does give you the most important prerequisites for a successful career. It's the admission ticket to your future.

Once again, congratulations on your MBA.