for unskilled workers has decreased and unemployment correspondingly increased. the higher the education level of the workforce, the lower the level of unemployment. a closer look reveals that the connection between education and it utilisation is more complex. higher education is very important when we are talking about companies that have made substantial investments in research and development. this is especially true of the ict industry and of innovation activities. but when we consider ict utilisation and application, the matter is not so straightforward. still 20 years ago, a worker was a physical part of the process and performed mechanical tasks. these days workers monitor and oversee processes via computer terminals. the processes themselves have not changed very much, and therefore the worker must master them. the advantage of the new computer applications is that the software assists in controlling and monitoring the overall production process. they collect information on the whole process and present it for user viewing. this enables the user to get a broader overview at a glance. the main characteristic of the most advanced companies is that they have shifted the focus of work, education and training from mechanical tasks to problem - solving and communication skills. previously when a problem arose, the worker told his superior. today he is more likely to try to solve the problem himself, in order to avoid having a small problem become a large one. as i noted earlier, since the adoption of it, productivity has increased most in the service sector. what is paramount for productivity growth is that all employees involved in a given process be able to use the required it. the best solution to accelerate the implementation of changes is that the staff is involved in any project where new it and related management systems are developed and applied. the employees know the products and services and their flows. as regards ict based management systems, the overall process becomes more transparent and more easily visualised. the same work is performed – but with more efficiency, and possibly also with more pleasure. when a company is operating in a competitive environment, the pressure to be competitive is an important incentive to the company ’ s management. if the company is unable to raise its productivity, new competitors will pose the threat of driving it out of the market. but on the other hand, raising productivity requires investment, organisational change, restructuring of processes, training of personnel, and a broad - based commitment. how can this be made to work? it is vital that the entire staff know and understand the market situation and the in - herent challenges so that they will share the company

are at the low end of the range they have been running since last november. putting these factors together, i would argue that inflation is likely to remain moderate over the foreseeable future. the fomc forecasts for core inflation were concentrated near 1. 8 percent this year, and its forecasts for total inflation were in the range of 1. 5 percent to 2. 0 percent for 2012, 2013 and 2014. my own assessment is that inflation will be at the lower end of these ranges. fed performance these disappointing forecasts pose a challenge for monetary policy. the fed is charged by congress in the federal reserve act to encourage conditions that foster both maximum employment and price stability. this is what you hear us refer to as the fed ’ s “ dual mandate ”. given the high unemployment rate and low job growth, i think it is clear that the fed has fallen short in achieving its goal of maximum employment. i will return to this point shortly. as for the price stability component of our dual mandate, the majority of fomc participants – including me – judge our objective for overall inflation to average 2 percent over the medium term. with my own view that inflation is likely to run below this rate over the next few years, i believe we run the risk of missing on our inflation objective as well. two different perspectives on the economy central bankers must formulate monetary policy with the understanding that our knowledge is imperfect. we may have incomplete and sometimes competing views of the forces that generate current economic conditions. this is especially true in the difficult circumstances we face today. in my view, we should try to formulate a monetary policy strategy that carefully balances the risks associated with the reasonable alternative economic scenarios that we face and is as robust as possible to miscalculations as to which of these scenarios is predominantly true. let me now discuss two quite different perspectives that could account for the disappointing slow growth and continued high unemployment that we confront today. these two conditions are important to consider in that they have markedly different monetary policy prescriptions. the first storyline i will refer to as the “ structural impediments scenario ”. in this scenario, the recent period, which has been referred to as the great recession, was accompanied by an acute period of structural change, skills mismatch, job - killing uncertainties and excessive bis central bankers ’ speeches regulatory burdens. accordingly, these structural impediments have caused the natural rate of unemployment to increase. the structural impediments scenario