Making education pay
By Julia Laplane, OECD
This article is on “Education “, the third most popular topic in the Better Life Index.
Education is a cornerstone of a functioning society. As Benjamin Franklin put it: “An investment in knowledge always pays the best interest.” But as education becomes longer and increasingly expensive, are we teaching our young people the right skills for the current market? With an outstanding student debt reaching $1 trillion last year in the US alone, and millions of graduates unable to find jobs in OECD countries, the question of return on investment has become a real economic priority.
In our technology-driven economies, knowledge is, more than ever, power. The OECD Skills Strategy is built around the notion that “Skills have become the global currency of 21st century economies”. A recent article in the OECD Observer on the impact of knowledge on economic growth pointed out that iPod production in 2006 accounted for 14 000 jobs inside the United States and 27 000 jobs outside. Today, Information and communication technology (ICT)-intensive occupations represent more than 20% of all jobs in the OECD. In such a fast-changing economic landscape, the issue of skills shortages has become a global concern. According to a recent international survey of more than 2,700 employers by consulting firm McKinsey, some 40% of employers reported that they face difficulties when recruiting entry-level staff because the candidates have inadequate skills for the jobs available. Furthermore, almost 45% of young people said that their current jobs were not related to their studies. So we need to ask how much of our investment in education should deliver greater productivity and income for workers.
Some countries factor this issue into their educational policies. Germany, which places high emphasis on vocational courses, apprenticeships and links with industry, has in a certain way addressed this challenge, bridging the gap between education and the labour market. In other countries, industries have taken initiatives to fill the void. Big firms such as Microsoft and Hewlett-Packard have started new training programs to cover their specific needs. The former plans to raise the number of apprenticeships and internships by 50% over the next 3 years, while Hewlett-Packard aims to train 500,000 IT-professionals globally by 2015. Others have taken a more radical approach to the issue. According to Silicon Valley billionaire and Facebook investor Peter Thiel, university does not necessarily provide young people with the skills needed to start a business or change society. He started a Thiel Fellowship program in 2010, offering $ 100,000 each to 24 ambitious young students to drop out of college to start technological and scientific start-ups. According to Jonathan Cain, president of the Thiel Foundation, the 2011 and 2012 fellows launched more than thirty companies and raised more than $34 million in outside funding.
So what, in our modern world, should education aim to accomplish? Should it serve to provide people with the right skills to match the job market rather than pursue the broader ideals of knowledge and enlightenment? But be careful -- some of the ‘pointless’ skills you learn at school might prove to be surprisingly useful and profitable. In his 2005 Stanford Commencement address, Steve Jobs mentioned his calligraphy class, the only one he decided to continue with after dropping out from all his other university classes: “None of this had even a hope of any practical application in my life. But ten years later, when we were designing the first Macintosh computer, it all came back to me. And we designed it all into the Mac. It was the first computer with beautiful typography.”
Find out more: