Teach­ing eco­nomic dy­namism

Financial Mirror (Cyprus) - - FRONT PAGE -

Business lead­ers of­ten ar­gue that the widen­ing ed­u­ca­tion gap – the dis­par­ity be­tween what young peo­ple learn and the skills that the job mar­ket de­mands – is a lead­ing contributor to high un­em­ploy­ment and slow growth in many coun­tries. For their part, gov­ern­ments seem con­vinced that the best way to close the gap is to in­crease the num­ber of stu­dents pur­su­ing de­grees in the so-called “STEM” sub­jects (sci­ence, tech­nol­ogy, en­gi­neer­ing, and math­e­mat­ics). Are they right?

The short an­swer is no. In­deed, the two main ar­gu­ments un­der­pin­ning claims that in­ad­e­quate ed­u­ca­tion is to blame for poor eco­nomic per­for­mance are weak, at best.

The first ar­gu­ment is that the lack of ap­pro­pri­ately skilled work­ers is pre­vent­ing com­pa­nies from in­vest­ing in more ad­vanced equip­ment. But that is not how eco­nomic de­vel­op­ment usu­ally works. In­stead, firms be­gin to invest, and ei­ther work­ers re­spond to the pos­si­bil­ity of higher wages by ac­quir­ing (at their own cost) the re­quired skills, or firms pro­vide their cur­rent and fu­ture em­ploy­ees with the rel­e­vant train­ing.

The sec­ond ar­gu­ment is that it is in­creas­ingly dif­fi­cult for the United States and other ad­vanced coun­tries to match the gains that de­vel­op­ing coun­tries have achieved by in­vest­ing heav­ily in up­graded equip­ment, tar­geted higher ed­u­ca­tion, and skills train­ing. But, again, this con­tra­dicts tra­di­tional trade dy­nam­ics, in which one coun­try’s suc­cess does not im­ply hard­ship for another.

In the­ory, of course, a si­mul­ta­ne­ous shift in sev­eral coun­tries to­ward STEM-fo­cused sec­ondary and higher ed­u­ca­tion – with large con­comi­tant pro­duc­tiv­ity gains – could di­min­ish the com­pet­i­tive­ness of an econ­omy that made no such ef­fort. But this sce­nario is highly un­likely, at least in the fore­see­able fu­ture.

In fact, the pro­lif­er­a­tion of highly spe­cialised univer­si­ties in Europe has failed to but­tress eco­nomic growth or em­ploy­ment. And the con­ver­sion of com­pre­hen­sive univer­si­ties into spe­cialised in­sti­tutes for sci­ence and tech­nol­ogy in the Soviet Union and com­mu­nist China did noth­ing to avert eco­nomic dis­as­ter in those economies. (China’s top univer­si­ties now of­fer two-year pro­grammes that em­u­late the struc­ture of Amer­i­can lib­eral arts col­leges.)

But the case for STEM ed­u­ca­tion is even more fun­da­men­tally flawed, be­cause it treats an econ­omy as an equa­tion. Ac­cord­ing to this logic, job cre­ation is a mat­ter of slot­ting hu­mans into iden­ti­fi­able op­por­tu­ni­ties, and eco­nomic growth is a mat­ter of in­creas­ing the stock of hu­man or phys­i­cal cap­i­tal, while ex­ploit­ing sci­en­tific ad­vances. This is a dark view of mod­ern economies, and a de­press­ing blue­print for the fu­ture.

To lay the foun­da­tion for a fu­ture based on ideas and in­ven­tion, busi­nesses and gov­ern­ments should con­sider how new prod­ucts and meth­ods emerged in some of his­tory’s most in­no­va­tive economies: the United King­dom and the US as early as 1820, and Ger­many and France later in the nine­teenth cen­tury. In th­ese economies, in­no­va­tion was pow­ered not by global sci­en­tific progress, but by the pop­u­la­tion’s dy­namism – their de­sire, ca­pac­ity, and lat­i­tude to cre­ate – and will­ing­ness to al­low the fi­nan­cial sec­tor to steer them away from un­promis­ing pur­suits.

The fact that in­no­va­tive ideas have arisen largely from the dy­namism of peo­ple be­lies the con­clu­sion that all economies re­quire wide­spread STEM-fo­cused ed­u­ca­tion. Though a larger STEM base can ben­e­fit some economies, most ad­vanced coun­tries al­ready have suf­fi­cient ca­pac­ity in th­ese fields to ap­ply for­eign tech­nolo­gies and en­gi­neer their own.

What economies need in­stead is a boost in dy­namism. The prob­lem is that the his­tor­i­cally most in­no­va­tive economies have lost much of their for­mer dy­namism, de­spite re­tain­ing an edge in so­cial me­dia and some high-tech­nol­ogy sec­tors. And oth­ers – for ex­am­ple, Spain and the Nether­lands – were never par­tic­u­larly dy­namic. Mean­while, the emerg­ing economies that are sup­posed to be filling the gap – no­tably, China – are still fall­ing short of the lev­els of in­no­va­tion re­quired to off­set the de­clin­ing ben­e­fits of tech­nol­ogy trans­fer.

In other words, economies to­day lack the spirit of in­no­va­tion. Labour mar­kets do not need only more tech­ni­cal ex­per­tise; they re­quire an in­creas­ing num­ber of soft skills, like the abil­ity to think imag­i­na­tively, de­velop cre­ative so­lu­tions to com­plex chal­lenges, and adapt to chang­ing cir­cum­stances and new con­straints.

That is what young peo­ple need from ed­u­ca­tion. Specif­i­cally, stu­dents must be ex­posed to – and learn to ap­pre­ci­ate – the mod­ern val­ues as­so­ci­ated with in­di­vid­u­al­ism, which emerged to­ward the end of the Re­nais­sance and con­tin­ued to gain trac­tion through the early twen­ti­eth cen­tury. Just as th­ese val­ues fu­eled dy­namism in the past, they can rein­vig­o­rate economies to­day.

A nec­es­sary first step is to re­store the hu­man­i­ties in high school and univer­sity cur­ric­ula. Ex­po­sure to lit­er­a­ture, phi­los­o­phy, and his­tory will in­spire young peo­ple to seek a life of rich­ness – one that in­cludes mak­ing cre­ative, in­no­va­tive con­tri­bu­tions to so­ci­ety. In­deed, study­ing the “canon” will do more than pro­vide young peo­ple with a set of nar­row skills; it will shape their per­cep­tions, am­bi­tions, and ca­pa­bil­i­ties in new and in­vig­o­rat­ing ways. In my book Mass Flour­ish­ing, I cite some key fig­ures who ar­tic­u­late and in­spire mod­ern val­ues.

The hu­man­i­ties de­scribe the as­cent of the mod­ern world. Coun­tries world­wide can use the hu­man­i­ties to de­velop or re­vive the economies that drove this as­cent, while help­ing in­di­vid­u­als to lead more pro­duc­tive and ful­fill­ing lives.

Newspapers in English

Newspapers from Cyprus

© PressReader. All rights reserved.