IBM was at death's door in the late 1980s.
Consumer tastes were changing, and the company was caught flat-footed.
The PC revolution led by Apple, Intel and Microsoft was cannibalizing Big Blue's low-margin mainframe business.
Expensive research projects weren't making it into consumer products, and the company was short on cash to pay its 400,000 employees, according to Irving Wladawsky-Berger, chairman emeritus of the IBM Academy of Technology.
"We couldn't adapt," Wladawsky-Berger said. "When the environment changes, you have to change."
Eventually, IBM changed, hiring an outside CEO and transforming itself from a hardware manufacturer into a technology services company.
But unlike IBM today, much of the U.S. is still stuck in a 20th century mindset and mired in joblessness instead of looking to the country's resilient business culture to solve its problems, Wladawsky-Berger told Chattanoogans at Wednesday's Power of Technology event,
"A lot of old jobs aren't coming back," he said. "So who is going to invent the new jobs? Not Washington."
Many entrepreneurs seem to agree that workers needed for companies in the future aren't coming out of the current education system in sufficient numbers.
Steve Hau, founder and CEO of Nashville-based Shareable Ink, said that though he "would very much like to" stay in Nashville, he is "not yet convinced" that it's possible to do so for the long term, according to a Venture Nashville interview.
"We found five engineers," he added. "Can we find 50?"
That's a question already being tackled by educators in Chattanooga, who plan to open a new science, technology, engineering and math-focused school in August 2012.
Ronna-Renee Jackson, who is coordinating local efforts to secure grants for the school, said Chattanooga's effort will prevail because area leaders are starting to look at education as a product rather than an end unto itself.
"We're not just talking about educating children in a different way, we're talking about businesses being consumers of education, so how do you create a work force that businesses need," Jackson said. "It's not just a STEM school, it's about economic development."
IBM talks about the today's perfect employee being "T-shaped," Wladawsky-Berger said, with a broad range of skills and one technical or vocational skill with which he or she is very adept.
This view contrasts with the 20th-century focus on a broad liberal arts education with little specialization, he said.
"You can say, 'But I like the way it used to be,' but it's just not that way anymore," he said. "You either adapt or fall, and no one is going to do it for you."
From vacuum tubes to transistors, microprocessors and finally the Internet cloud, the pace of innovation rewards people who think like entrepreneurs rather than bureaucrats, he said.
Creating that spirit of entrepreneurship starts not at the national level, but at the local level and in the classroom, said David Crockett, Chattanooga's director of sustainability.
The problem is that because science and math are often taught as abstract concepts, a lot of students get turned off and lose interest, Crockett said.
Educators are learning instead to focus on solving real-world problems using those skills, just like businesses do, Crockett said.
"If you want to build a more resilient region, it's going to require more science and technology in education, but teaching [students] in such a way that they don't even know they're learning it," he said.