How Not To Educate the Information Age Workforce’, Critical Quarterly Spring 2001, Vol 43 No 1.

By Diane Coyle

Tony Blair, in the 1997 general election campaign, famously made education his top three priorities. He was more emphatic than most, but it is every politician¹s top priority, and certainly every parent¹s. Yet there are no aspects of modern societies less well prepared for the information age economy than their education systems. While institutional details vary from country to country, including the amounts spent and the split between private and public provision, everywhere the education system is inflexible, bureaucratic, over-centralised, demoralised and inadequate. Policy-makers, teachers and parents are failing their children, a failure that matters most for those who start out with the fewest economic advantages. The education system is guilty, amongst other things, of fossilizing emerging inequalities as a result of its failure to adapt to underlying economic change.

This is not to say there are no signs of awareness of the extent of this failure. For example, Japan has one of the world¹s most rigid and conformist education systems, in which students come under enormous pressure to succeed in just one conventional way. Taichi Sakaiya, Japan¹s Minister of State for Economic Planning, speaking in Paris at the OECD Forum 2000, explicitly recognised the link between the underlying economic structure and education, a system extraordinarily little changed in its broad outline for a century. ³The educational system was built up to foster highly patient and co-operative people with minimal originality and creativity, perfectly suited for working in standardised mass production industries. … As a result, by the 1980s Japan had achieved the most complete modern industrialised society, based on the mass production of standardised goods, in the entire history of human beings,² he said.

Across the industrialised world, however, the political response to the realisation — and it¹s not new — that an education system devised to train workers for the assembly line is failing because of the obsolescence of the mass production economy, has been to try and patch it up. In a desperate and entirely understandable bid to raise standards in failing schools, politicians and bureaucrats have concentrated massive efforts on delivering incremental improvements in the existing education system, and its incremental extension to broader groups of the population.

Of course it is right to seek to raise standards in response to the past failures. Even so, the absence of serious proposals to combine the need for a less rigid education system with a true respect for intellectual attainment is all the more shocking because the internet has created a vast new array of resources and made possible new methods of teaching. New technology has cut the cost of extending educational provision, made it possible for the best teachers to extend their reach and literally put the entire Library of Congress at the fingertips of students.

One of the most thoughtful contributions on what kind of education system the 21st century economy will need has come from Alan Greenspan, the Federal Reserve Board chairman. In one speech he said: ³Skill has taken on a much broader meaning than it had only a decade or two ago. Today¹s workers must be prepared along many dimensions — not only with technical know-how but also with the ability to create, analyze and transform information, and with the capacity to interact effectively with others. Moreover they must recognise that the skills they develop today will likely not last a lifetime.² Whereas once completing high school was enough learning for a lifetime, that is no longer true, he added.1 In other words, while it was always true that the most able students, those climbing to the pinnacle of the liberal education, not only learnt well but also learnt how to learn, that meta-skill is now needed by almost everyone. For having only generic attainments that start becoming outdated as soon as they leave school leaves people vulnerable to replacement either by machines or by workers in other, cheaper parts of the world.

This need for the constant updating of skills is nowhere more evident than on the frontier of the computer industry. After all, this industry changes so swiftly. Programmers acquire shelves groaning with dusty three year old or 12 month old user manuals for languages once in huge demand and now defunct. New areas of business balloon unpredictably, creating a jobs market so tight in some skills that companies literally go to the ends of the earth to hire workers. In her memoir of this manic business, Ellen Ullman writes: ³The skill-set changes before the person possibly can, so it¹s always simpler just to change the person. Take out a component, put in a zippier one. Let the people come and go; plug them in then pull them out.²

This kind of turnover in the demand for skills is still the exception in the jobs market. Even so, it is hard to think of any jobs now where what an employer wants in a worker is a passive repository containing a minimum amount of information and basic literacy and numeracy. Although literacy and numeracy are still essential of course — making it tricky to argue with the official Gradgrinds focussed on achieving higher standards in this small area of the necessary skill set — the real need is a robust ability to think independently. Even in the most Œordinary¹ jobs people increasingly need to be able to take responsibility for decisions. In a factory using teams to build products in a just-in-time system, team members need to decide when to stop the line for quality control, or to think up their own process and product improvements. Nurses in a hospital are no longer the bottom layers of the medical hierarchy, humbly carrying out doctors¹ decisions, but have taken on parallel responsibilities. PAs in an office are no longer just typists and tea-makers but have significant adminstrative responsibilities. Passivity and conformity at work is on its way out. Yet our education system expects passivity at school for 14 or more years to be an adequate preparation for work.

If there is a single sign of the inadequacy of education for the majority of children, it is the increasing inequality in earnings apparent in all OECD economies but particularly in the US and UK with their more flexible jobs markets. By the mid-1990s the degree of inequality had reached its most pronounced level than any time in the past 60 years and probably longer. In particular, the economic return to education and computer skills rose dramatically. Between 1979 and 1995 the earnings of new college graduates in the US rose 33 per cent relative to those of high-school graduates. In real, inflation-adjusted terms the pay of the least educated workers actually fell during those two decades.

Economists have tested several possible explanations for increased inequality. For a while one favoured suggestion was that increased competition from low-cost foreign workers was to blame, but that was clearly rejected by the available evidence in a number of studies. Such trade is too small-scale to explain the trend in incomes, and nor can it account for increased earnings inequality within industries and companies.

Instead, the problem seems to be a vastly increased demand for some types of skill combined with too small an increase in the supply of such workers.4 To give an indication of the demand shift, the proportion of the US workforce using a computer at work climbed from 24.4 per cent of all workers in 1984 to 50.6 per cent in 1997. And in 1997 the proportions ranged between 11.7 per cent for high school dropouts to 75.9 per cent for college graduates. The data show a substantial wage premium for use of a computer at work, one above and beyond the higher pay you would expect for a higher level of education. One summary concludes: ³Increases in the growth of the demand for more educated workers are concentrated in the most computer-intensive sectors of the economy over the past two decades.² This is not conclusive proof that computerization is behind the pattern of demand for labour, but it is certainly suggestive. It indicates that technical progress has been biased towards using certain kinds of new skills and against traditional skills. The modern jobs market needs a different kind of worker. The pattern of skill demands is similar in other OECD nations, although labour market institutions mean the outcomes in terms of wages and employment levels vary widely, with less inequality but also lower employment in countries with a high degree of social protection.

When asked, human resource managers in US companies said big investments in information technology had led to organisational changes. They had decentralised decision making and given workers more autonomy, and they wanted employees with a higher level of educational attainment.5 This suggests a need for independence or self-reliance, basic intelligence and common sense, and probably more co-operation or consultation with co-workers, less instruction from above — all characteristics exactly opposite to those valued by a manager trying to run a smooth, centralised assembly line.

Obviously computers have been able to substitute directly for many repetitive tasks, whether in the factory or in services like banking. Yet while the microprocessor can substitute for some kinds of labour, it complements others. What computers need humans for is doing all the things they can¹t manage. In short, they need people skills. These range from raw intellect to creativity and imagination, through to friendliness and a cheerful smile. This is exactly consistent with the observed patterns of jobs growth, tracked each year for example by the US Bureau of Labour Statistics or Warwick University¹s Institute for Employment Research.

The evidence of history also supports the argument that all technological revolutions increase the rewards to Œskill¹ over a transitional period. It is no accident that on some measures earnings inequality is greater now than at any time since the late 19th and early 20th century. For example, Claudia Goldin and Lawrence Katz found that during the period of factory electrification in 1909-29, industries with higher capital ratios and more intensive electricity use employed more highly-educated workers and paid them more. This was a contrast to the earlier period when initially mechanization had been deskilling, requiring only factory fodder. The new system of batch production raised the need for skills once again. However, the pay gap between the skilled and unskilled narrowed again later, for two reasons. One is that the new technologies become more familiar and user-friendly, reducing the comparative advantage of the skilled.

A second, reason, however, lies in the response of the education system. That was also the period when the US public school system was created and the provision of education to a standardised level spread throughout the country to a large proportion of the population. In other industrialised nations the same period also saw the mass state provision of education, standardisation of the curriculum and successive increases in the school leaving age. Ever since the tendency has been towards further centralised direction of education and training by governments even in countries where there is also private schooling. Teachers are bureacrats required to furnish their pupils with a prescribed set of information at given times, and achieve measurable standards on various tightly defined metrics. It doesn¹t sound a good system for the network age, and it isn¹t.

Of course, it is a lot easier to criticise the existing system than to suggest a better one. For a start it is not obvious that improving economic growth ought to be the purpose of the education system. Even if you accept the needs of the economy as a valid framework of reference, the problem is that economists do not understand the links between education and growth. We know that the flow of ideas is the most important factor in long-run growth but not how it works. As Harvard economist Ed Glaeser puts it: ³The critical theoretical insight of growth theory has almost no solid empirical foundations.² The sensible response is to experiment with a range of reforms rather than making an instant commitment to a new model approved by a central government department.

There may be some clues in looking at the kinds of people who have succeeded in the ur-New Economy industry itself, computers. Two researchers from the extraordinarily innovative Xerox PARC note that successful software and hardware innovators are anything but conventional. John Seely Brown and Paul Duguid write: ³Much digital innovation has come from people who spent their time on campus wandering around in the arts, theatre, psychology and the humanities — areas not well supported in the unplug-and-pay model of education.²

It is also noteworthy that almost all the world-class universities in almost all subjects, attracting the best students from many countries in an increaingly global higher education market, are the private US universities. These have two features that distinguish them from universities in other countries. One is the freedom available to students in the curriculum. The range of subjects studied by undergraduates is far wider than in other countries, providing a much greater choice and variety, and educating students more broadly. They have stayed closer to the classic educational ideal of forming well-rounded graduates, leaving narrower professional or vocational skills to post-graduate training. At an earlier stage it does not matter what they have learnt specifically, only that they have learnt something and can therefore do it again.

The second feature is the weight placed on having to attract the paying customer, tapping into the great merit of markets, that they convey unparalleled information about what people want. At present in most countries outside the US public funding is committed to the institution rather than the individual. Students can in many cases shop around in the sense that they can choose their university or college but, within limits, their choices have little impact on the institutions and there is no price mechanism to signal preferences. In hiring academics, too, only the US has anything like a market creating incentives to excel and attract students. Professors there have to compete to attract students to their courses, and universities have to compete for the best teachers and researchers. Elsewhere, universities are frankly stuffed with undistinguished jobsworths who put up with declining relative pay and status in return for a quiet life.

In their book Seely Brown and Duguid, writing about the US, suggest an refined university model, one that takes advantage of the new technologies. Universities would continue to exist as research centres and degree-granting bodies, but a student¹s education could be more fluid in time and place. ³Essentially a student¹s university career in such a system would no longer be through a particular place, time or pre-selected body of academics, but through a network principally of their own making yet shaped by a degree granting body and its faculty,² they write.6 Students could stay home or travel, work online or meet their teachers face-to-face, work with a class or with mentors, and learn continuously rather than for a fixed period. Such changes seem inevitable. Indeed, many universities are already experimenting with more flexible schemes. Harvard and Oxford are collaborating on a scheme to provide online learning to their alumni, allowing them to refresh and update their education. Distance learning is well-established and much improved through use of the internet.

Although extending access to higher education and exploiting new technologies effectively will be challenging, especially in the highly bureaucratic and centralised tertiary education systems outside the US, reshaping primary and secondary education looks far more difficult. Inevitably, the economic and social costs of a failed experiment at this stage of children¹s lives are far higher. Still, some of the necessary features of an education system that goes beyond the mass production of standardised workers are clear.

For example, the content of many school lessons is of no use in adult life. This has been true at least since I was a child, making education a process of jumping required hurdles and then, mercifully, forgetting whatever it was that got you over them. But that is no excuse for it to go on. Ministries of education ought to stop wasting time prescribing the detailed content of lessons in specialised subjects at every stage of a pupil¹s school career. They are perpetrating an intellectual fraud, one whose biggest victims are those children who are least able in the conventional academic sense. It condemns them unnecessarily to failure, both financially and in the more important personal sense.

Even somebody who is going to become an academic will acquire the necessary content matter in their undergraduate and postgraduate courses. After all, that material has never been more easily and cheaply available than it is now. What they need to learn at school, rather, is some general Œhow tos¹ rather than Œwhats¹. The good old 3Rs, obviously, are the basic building blocks for acquiring and processing information. But also needed are skills of logic and powers of argument, and, in an age when we are saturated with images, visual skills.

Subjects that have come to be seen, at least in the ministries, as frivolous such as music and drama are almost certainly more useful for both the pupil and the economy as a whole than the narrowly academic, core curriculum subjects edging them out. For example, charitable welfare-to-work schemes in New York and London focus on giving young people written off as no-hopers at the end of their school careers, who are long-term unemployed, key life skills they should have learnt in school if not at home. As well as punctuality and politeness, for instance, these include presentation, speaking confidently and clearly, good posture — all skills a drama teacher could have offered.

At a time when in so many subject areas there is obviously no such thing as a static body of knowledge it seems madness to imagine we should nevertheless be instilling such a set of information into the minds of young people. The knowledge economy is not about what you know but how you know, and knowledge is a process or experience, dynamic rather than static.

To focus on incremental improvements in redundant skills is all the more damaging given the importance of values and intangible social capital in modern economies. Children know when their education is useless, and in many schools — especially amongst boys — there is tremendous peer pressure to shun conventional academic success even though it clearly can offer a path to other and better opportunities. Given that lack of respect for conventional schooling, and given the need for alternative role models or sets of values, it beggars belief that the principal policy solution on offer is to push even harder down the conventional route. It obviously will not work. It will not attain the results, and it won¹t do the children any good either. They know getting a grade C rather than a D in history doesn¹t matter.

There is a compelling case for decentralisation in primary and secondary education, not so much in the administrative sense as the intellectual. Who pays for the education system, or what the lines of organisational accountability should be, are secondary questions in this context. High standards for pupils are best achieved by ensuring their teachers are high quality, and while relatively low pay plays a big part in having creamed off some of the best teachers into other occupations in recent years, the bureaucratisation and centralisation of school systems has tried to turn teachers into machines. Now that they can, let the machines do all the boring business of churning out facts and marking homework. Most of the material is already there online somewhere: a motivated child could pass through high school right now with the BBC Online and similar websites. Free all the teachers to instill a sense of curiosity and intellectual excitement, self-respect and fun, personal discipline and logical thought. Some will be good at it, some bad; after all many are natural bureaucrats rather than born teachers. But the overall standard of education will without any doubt improve.

Increasing standardisation has also served children, in all their variety, very badly. The focus on academic success alone means education systems inevitably produce first and second class citizens. Decentralisation would also permit more diversity, and recognise that success takes many shapes. Most people are not stupid, but relatively few are academically able. As it is impossible to predict exactly what workplace skills will be needed in even five or ten years¹ time, it is dangerously obsessive to insist on a single and clearly already slightly archaic set of achievements.

The financial markets provide a wonderful example of the sudden mushrooming of demand for an unexpected set of skills. The explosive growth of derivatives market from the late 1980s on created an insatiable demand for traders with a particular set of mental arithmetic skills. It was not academically high level stuff — they didn¹t need a PhD in mathematics although the banks did want people with those too. Rather, on the trading floor, they needed the ability to add up and multiply very fast, to be thoroughly at home with certain simple mental arithmetic skills. The City of London sucked in tens of thousands of young men and women working in another kind of market, street markets, or perhaps in bank branches as tellers, people who might or might not have left high school with a paper qualification in mathematics but could do the business. Now, nearly 20 years later, the demand for such people is tailing off as more trading is computerised. In the next decade there will be a demand for another, unexpected skill.

What policy makers hate about this kind of prescription is the thought of giving up control. Even if they can accept the case for decentralisation intellectually, and a minority can, they hate the idea of not being able to spell out exactly what it is supposed to achieve. In this, they are no different from the top executives in many big companies who talk of empowering the workforce or decentralising decision-making to business units, but in the end cannot bring themselves to do it. Instead they use new technologies to control the units even more tightly or monitor every key stroke made by an employee. However, at a time of rapid and tumultuous economic change, it is impossible to predict what workforce skills employers will need. For bureaucrats to pretend they can spell out an appropriate curriculum and standards in every detail is both dishonest and an appalling failure of their responsibilities to the public. Bureaucratic planning failed as an economic system under Soviet communism and now it is failing under western capitalism too. Yet it clings on grimly in ministries of education the world over, at the expense of our children.

BRYNJOLFSSON, Erik and Lorin Hitt, ŒComputing Productivity: Are Computers Pulling Their Weight?¹, MIT Sloan School of Management, working paper January 2000.

CASTELLS, Manuel, The Information Age, vols I-III, Blackwell, 1996-98.

GLAESER, Ed, ŒThe Future of Urban Research¹, Harvard University working paper September 1999.

GOLDIN, Claudia and Lawrence Katz, ŒThe Origins of Technology-Skill Complementarity¹, Quarterly Journal of Economics, August 1998, Vol CXIII No 3 pp693-732.

GREENSPAN, Alan, Speech to National Community Reinvestment Coalition, 22/3/00,

KATZ, Lawrence, ŒTechnological Change, Computerization and the Wage Structure¹, paper presented at Commerce Department Conference 25-26 May 1999.

KRUGMAN, Paul, Pop Internationalism, MIT Press 1996.

SAKAIYA, Taichi, ŒThe Knowledge Value Revolution¹, paper presented at OECD Forum 2000, Paris 27/6/00.

SEELY BROWN John and Paul Duguid, The Social Life of Information, Harvard Business School Press, 2000.

ULLMAN, Ellen, Close to the Machine, City Lights 1997.

Copyright Diane Coyle, 2001.