Repetitive coding tasks will burn the curiosity out of anyone. The only solution is to not have "IT organizations".

You may be onto something here: IT is under constant pressure to squeeze ever more performance out of its workers. Optimizing for performance means taking a common task, standardizing it to make sure that it can be easily repeated without much effort.

What do you mean by "not having IT organizations"? What is the alternative?

Kill the patient!

I'm not sure eliminating IT or 'killing the patient' as you so eloquently phrase it, is a viable solution for many companies. What can be done to increase the metabolic activity of creativity in said patient instead of killing him?

With the speed at which technology is advancing, there's really no excuse for this attitude. It's also a common, general personality failure. If a person has no love of knowledge by nature and the fear of competition cannot engender it, then what use is such a person?

Falls in line with the my colleague's "Fire 'em" rhetoric which prompted this thread in the first place. What kinds of things can a company do to encourage learning? Certificates don't count ;-)

How can you change someone's fundamental attitude if fear doesn't work? I'm not sure you can and I'm not even sure fear is all that effective in the long term. Either they want to develop themselves, or they don't.

Some people are just afraid of learning, or never discovered that it could be more than grinding away for a boring teacher. Or they are afraid of falling behind at the "real work". You could try to help these folks with enthusiasm and gently leading through the learning process. If it works, great!

Other people probably have a combination of low IQ and highly-focused attention [1]. Most of this is probably genetically determined; there is nothing to fix, although it will continue to improve into their mid-twenties. These folks are perfectly useful, and even trainable, but management must understand their cognitive limits. They are not so good at solving problems ill-suited to their existing mental tools, and even worse at recognizing the possibility of other approaches. Higher-order systems are probably especially difficult for them. Understand that they can exude confidence even when walking straight into an architecture tar pit. Do no let them drive the high level strategy, and fire 'em if they try to dominate the discussion.

[1] The converse of attention deficit "disorder".

EDIT: fear and activity for the sake of activity create focused attention. An organizational culture of compulsive activity and rapid action can cause this is anybody who buys in to it.

EDIT AGAIN: The opposite of compulsive activity is play. Make a regular game out of trying things just to see what they do.

Bravo, very insightful. Particularly the comment on play.

Yes I'm sorry but large organisations often seem to slowly and inadvertently replace creativity and enthusiasm with processes and procedures.

Would budgetting in time set aside for non-productive endeavours be helpful? If so, how much?

Problem solving contests. The "Regular Expression of The Week" challenge, or solving a Raymond Smullyan logic problem, or smallest program that does X challenge.

You'll have to mix it up to encourage a lot of participation, as some people are scared of regexps, others of number theory, and others of prgramming challenges.