As important as the rise of participative media is – for those keeping track, the #1 video on YouTube today is Pepsi Girl Superburp – the broadband internet is also having other effects. It is, for instance, reshaping the worldwide labor market. In an article in the Financial Times today, Michael Schrage takes a contrarian look at the West’s “shortage” of qualified science and engineering graduates, arguing that attempts to close the technical skills gap are wrongheaded and doomed.
“India and China,” he notes, “already produce nearly 1 million engineering graduates a year compared with roughly 170,000 such graduates from the US and Europe.” Confronted with this “demographic deluge of human capital investment,” European and American policymakers and educators are urging big investments to train “more and better homegrown students” in technical disciplines in order to ensure future competitiveness. That view has become the common wisdom, but Schrage blasts it:
What nonsense. What aspect of “supply and demand” do these elites refuse to understand? Western students clever enough to succeed in science and engineering are clever enough to know they will compete against growing global armies of educated rivals trained to work hard for less … Innovative companies will [use the internet to] chase ‘cheap smarts’ as relentlessly as today’s cost-conscious multinationals pursue cheaper manufacturing and call-centre capacity.”
I think Schrage’s right. And his point is a critical one. As I wrote last year, reporting on comments Gerry Cohen made about American students’ declining interest in technology careers, “The supply of homegrown tech talent will shrink because the availability of and compensation for tech work will decline as companies … shift jobs to countries with cheaper labor. It’s simple economics. When wages go down for a category of jobs, demand for those jobs falls as well … If we think stronger education will cure the shortage of domestic tech workers, we’re wrong. It’s job quality, not education quality, that in the end determines the careers people pursue.” However noble the intentions, pushing students into a glutted labor market will only backfire.
Schrage coldly sums up the new market dynamics generated by globalization and high-bandwidth data networks: “Knowledge is not power; it is on sale … For the US and Europe, increasing the numbers of science and engineering graduates seems a policy prescription for economic despair.”
So how do we ensure that good, well-paying jobs will be around in the future? Schrage says that our educational institutions need to focus on “creative differentiation.” If that sounds vague, it’s because it is. Where Schrage’s diagnosis of the problem is incisive, his prescription for solving it is sketchy. He talks about using business ingenuity and the prestige of our top universities to harness the power of the cheap technical talent residing elsewhere in the world. But while that may help the bottom lines of multinational corporations, it leaves unanswered the bigger question: Where are the good jobs required to support a healthy middle class going to come from? I admit that I don’t have an answer for that question, either. But I’m pretty sure of one thing: We can’t all make a living writing blogs and shooting silly videos.