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06/05/2008

It's Not All Bad

Fareed Zakaria, editor of Newsweek International, has written a
book “The Post-American World” that is rocketing up the best-
seller lists. He did an essay adapted from the book that appeared
in the May/June 2008 edition of Foreign Affairs and contained
therein were some interesting comments on the topics of education
and the global economy.

---

“In trying to understand how the United States will fare in the
new world, the first thing to do is simply look around: the future
is already here. Over the last 20 years, globalization has been
gaining breadth and depth. More countries are making goods,
communications technology has been leveling the playing field,
capital has been free to move across the world – and the United
States has benefited massively from these trends. Its economy
has received hundreds of billions of dollars in investment, and its
companies have entered new countries and industries with great
success. Despite two decades of a very expensive dollar, U.S.
exports have held ground, and the World Economic Forum
currently ranks the United States as the world’s most competitive
economy. GDP growth, the bottom line, has averaged just over
three percent in the United States for 25 years, significantly
higher than in Europe or Japan. Productivity growth, the elixir of
modern economics, has been over 2.5 percent for a decade now,
a full percentage point higher than the European average. This
superior growth trajectory might be petering out, and perhaps
U.S. growth will be more typical for an advanced industrialized
country for the next few years. But the general point – that the
United States is a highly dynamic economy at the cutting edge,
despite its enormous size – holds.

“Consider the industries of the future. Nanotechnology (applied
science dealing with the control of matter at the atomic or
molecular scale) is likely to lead to fundamental breakthroughs
over the next 50 years, and the United States dominates the field.
It has more dedicated ‘nanocenters’ than the next three nations
(Germany, Britain, and China) combined and has issued more
patents for nanotechnology than the rest of the world combined,
highlighting its unusual strength in turning abstract theory into
practical products. Biotechnology (a broad category that
describes the use of biological systems to create medical,
agricultural, and industrial products) is also dominated by the
United States. Biotech revenues in the United States approached
$50 billion in 2005, five times as large as the amount in Europe
and representing 76 percent of global biotech revenues.

“Manufacturing has, of course, been leaving the country, shifting
to the developing world and turning the United States into a
service economy. This scares many Americans, who wonder
what their country will make if everything is ‘made in China.’
But Asian manufacturing must be viewed in the context of a
global economy. The Atlantic Monthly’s James Fallows spent a
year in China watching its manufacturing juggernaut up close,
and he provides a persuasive explanation of how outsourcing has
strengthened U.S. competitiveness. What it comes down to is
that the real money is in designing and distributing products –
which the United States dominates – rather than manufacturing
them. A vivid example of this is the iPod: it is manufactured
mostly outside the United States, but most of the added value is
captured by Apple, in California.”

Education Nation

“ ‘Ah yes,’ say those who are more worried, ‘but you are looking
at a snapshot of today. The United States’ advantages are rapidly
eroding as the country loses its scientific and technological base
and suffers from inexorable cultural decay.’ A country that once
adhered to a Puritan ethic of delayed gratification, the argument
goes, has become one that revels in instant pleasures; Americans
are losing interest in the basics – math, manufacturing, hard
work, savings – and becoming a society that specializes in
consumption and leisure.

“No statistic seems to capture this anxiety better than those
showing the decline of engineering in the United States. In 2005,
the National Academy of Sciences released a report warning that
the United States could soon lose its privileged position as the
world’s science leader. The report said that in 2004 China
graduated 600,000 engineers, India 350,000, and the United
States 70,000 – numbers that were repeated in countless articles,
books, and speeches. And indeed, these figures do seem to be
cause for despair. What hope does the United States have if for
every one qualified American engineer there are more than a
dozen Chinese and Indian ones? For the cost of one chemist or
engineer in the United States, the report pointed out, a company
could hire five Chinese chemists or 11 Indian engineers.

“The numbers, however, are wrong. Several academics and
journalists investigated the matter and quickly realized that the
Asian totals included graduates of two- and three-year programs
training students in simple technical tasks. The National Science
Foundation, which tracks these statistics in the United States and
other nations, puts the Chinese number at about 200,000
engineering degrees per year, and the Rochester Institute of
Technology’s Ron Hira puts the number of Indian engineering
graduates at about 125,000 a year. This means that the United
States actually trains more engineers per capita than either China
or India does.

“And the numbers do not address the issue of quality. The best
and brightest in China and India – those who, for example, excel
at India’s famous engineering academies, the Indian Institutes of
Technology (5,000 out of 300,000 applicants make it past the
entrance exams) – would do well in any educational system. But
once you get beyond such elite institutions – which graduate
under 10,000 students a year – the quality of higher education in
China and India remains extremely poor, which is why so many
students leave those countries to get trained abroad. In 2005, the
McKinsey Global Institute did a study of ‘the emerging global
labor market’ and found that 28 low-wage countries had
approximately 33 million young professionals at their disposal.
But, the study noted, ‘only a fraction of potential job candidates
could successfully work at a foreign company,’ largely because
of inadequate education.

“Indeed, higher education is the United States’ best industry. In
no other field is the United States’ advantage so overwhelming.
A 2006 report from the London-based Center for European
Reform points out that the United States invests 2.6 percent of its
GDP in higher education, compared with 1.2 percent in Europe
and 1.1 percent in Japan. Depending on which study you look at,
the United States, with five percent of the world’s population,
has either seven or eight of the world’s top ten universities and
either 48 percent or 68 percent of the top 50. The situation in the
sciences is particularly striking. In India, universities graduate
between 35 and 50 Ph.D.’s in computer science each year; in the
United States, the figure is 1,000. A list of where the world’s
1,000 best computer scientists were educated shows that the top
ten schools are all American. The United States also remains by
far the most attractive destination for students, taking in 30
percent of the total number of foreign students globally, and its
collaborations between business and educational institutions are
unmatched anywhere in the world. All these advantages will not
be erased easily, because the structure of European and Japanese
universities – mostly state-run bureaucracies – is unlikely to
change. And although China and India are opening new
institutions, it is not that easy to create a world-class university
out of whole cloth in a few decades.

“Few people believe that U.S. primary and secondary schools
deserve similar praise. The school system, the line goes, is in
crisis, with its students performing particularly badly in science
and math, year after year, in international rankings. But the
statistics here, although not wrong, reveal something slightly
different. The real problem is one not of excellence but of
access. The Trends in International Mathematics and Science
Study (TIMSS), the standard for comparing educational
programs across nations, puts the United States squarely in the
middle of the pack. The media reported the news with a
predictable penchant for direness: ‘Economic Time Bomb: U.S.
Teens Are Among Worst at Math,’ declared the Wall Street
Journal.

“But the aggregate scores hide deep regional, racial, and
socioeconomic variation. Poor and minority students score well
below the U.S. average, while, as one study noted, ‘students in
affluent suburban U.S. school districts score nearly as well as
students in Singapore, the runaway leader on TIMSS math
scores.’ The difference between the average science scores in
poor and wealthy school districts within the United States, for
instance, is four to five times as high as the difference between
the U.S. and the Singaporean national average. In other words,
the problem with U.S. education is a problem of inequality. This
will, over time, translate into a competitiveness problem, because
if the United States cannot educate and train a third of the
working population to compete in a knowledge economy, this
will drag down the country. But it does know what works.”

Hot Spots will return June 19.

Brian Trumbore


AddThis Feed Button

 

-06/05/2008-      
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Hot Spots

06/05/2008

It's Not All Bad

Fareed Zakaria, editor of Newsweek International, has written a
book “The Post-American World” that is rocketing up the best-
seller lists. He did an essay adapted from the book that appeared
in the May/June 2008 edition of Foreign Affairs and contained
therein were some interesting comments on the topics of education
and the global economy.

---

“In trying to understand how the United States will fare in the
new world, the first thing to do is simply look around: the future
is already here. Over the last 20 years, globalization has been
gaining breadth and depth. More countries are making goods,
communications technology has been leveling the playing field,
capital has been free to move across the world – and the United
States has benefited massively from these trends. Its economy
has received hundreds of billions of dollars in investment, and its
companies have entered new countries and industries with great
success. Despite two decades of a very expensive dollar, U.S.
exports have held ground, and the World Economic Forum
currently ranks the United States as the world’s most competitive
economy. GDP growth, the bottom line, has averaged just over
three percent in the United States for 25 years, significantly
higher than in Europe or Japan. Productivity growth, the elixir of
modern economics, has been over 2.5 percent for a decade now,
a full percentage point higher than the European average. This
superior growth trajectory might be petering out, and perhaps
U.S. growth will be more typical for an advanced industrialized
country for the next few years. But the general point – that the
United States is a highly dynamic economy at the cutting edge,
despite its enormous size – holds.

“Consider the industries of the future. Nanotechnology (applied
science dealing with the control of matter at the atomic or
molecular scale) is likely to lead to fundamental breakthroughs
over the next 50 years, and the United States dominates the field.
It has more dedicated ‘nanocenters’ than the next three nations
(Germany, Britain, and China) combined and has issued more
patents for nanotechnology than the rest of the world combined,
highlighting its unusual strength in turning abstract theory into
practical products. Biotechnology (a broad category that
describes the use of biological systems to create medical,
agricultural, and industrial products) is also dominated by the
United States. Biotech revenues in the United States approached
$50 billion in 2005, five times as large as the amount in Europe
and representing 76 percent of global biotech revenues.

“Manufacturing has, of course, been leaving the country, shifting
to the developing world and turning the United States into a
service economy. This scares many Americans, who wonder
what their country will make if everything is ‘made in China.’
But Asian manufacturing must be viewed in the context of a
global economy. The Atlantic Monthly’s James Fallows spent a
year in China watching its manufacturing juggernaut up close,
and he provides a persuasive explanation of how outsourcing has
strengthened U.S. competitiveness. What it comes down to is
that the real money is in designing and distributing products –
which the United States dominates – rather than manufacturing
them. A vivid example of this is the iPod: it is manufactured
mostly outside the United States, but most of the added value is
captured by Apple, in California.”

Education Nation

“ ‘Ah yes,’ say those who are more worried, ‘but you are looking
at a snapshot of today. The United States’ advantages are rapidly
eroding as the country loses its scientific and technological base
and suffers from inexorable cultural decay.’ A country that once
adhered to a Puritan ethic of delayed gratification, the argument
goes, has become one that revels in instant pleasures; Americans
are losing interest in the basics – math, manufacturing, hard
work, savings – and becoming a society that specializes in
consumption and leisure.

“No statistic seems to capture this anxiety better than those
showing the decline of engineering in the United States. In 2005,
the National Academy of Sciences released a report warning that
the United States could soon lose its privileged position as the
world’s science leader. The report said that in 2004 China
graduated 600,000 engineers, India 350,000, and the United
States 70,000 – numbers that were repeated in countless articles,
books, and speeches. And indeed, these figures do seem to be
cause for despair. What hope does the United States have if for
every one qualified American engineer there are more than a
dozen Chinese and Indian ones? For the cost of one chemist or
engineer in the United States, the report pointed out, a company
could hire five Chinese chemists or 11 Indian engineers.

“The numbers, however, are wrong. Several academics and
journalists investigated the matter and quickly realized that the
Asian totals included graduates of two- and three-year programs
training students in simple technical tasks. The National Science
Foundation, which tracks these statistics in the United States and
other nations, puts the Chinese number at about 200,000
engineering degrees per year, and the Rochester Institute of
Technology’s Ron Hira puts the number of Indian engineering
graduates at about 125,000 a year. This means that the United
States actually trains more engineers per capita than either China
or India does.

“And the numbers do not address the issue of quality. The best
and brightest in China and India – those who, for example, excel
at India’s famous engineering academies, the Indian Institutes of
Technology (5,000 out of 300,000 applicants make it past the
entrance exams) – would do well in any educational system. But
once you get beyond such elite institutions – which graduate
under 10,000 students a year – the quality of higher education in
China and India remains extremely poor, which is why so many
students leave those countries to get trained abroad. In 2005, the
McKinsey Global Institute did a study of ‘the emerging global
labor market’ and found that 28 low-wage countries had
approximately 33 million young professionals at their disposal.
But, the study noted, ‘only a fraction of potential job candidates
could successfully work at a foreign company,’ largely because
of inadequate education.

“Indeed, higher education is the United States’ best industry. In
no other field is the United States’ advantage so overwhelming.
A 2006 report from the London-based Center for European
Reform points out that the United States invests 2.6 percent of its
GDP in higher education, compared with 1.2 percent in Europe
and 1.1 percent in Japan. Depending on which study you look at,
the United States, with five percent of the world’s population,
has either seven or eight of the world’s top ten universities and
either 48 percent or 68 percent of the top 50. The situation in the
sciences is particularly striking. In India, universities graduate
between 35 and 50 Ph.D.’s in computer science each year; in the
United States, the figure is 1,000. A list of where the world’s
1,000 best computer scientists were educated shows that the top
ten schools are all American. The United States also remains by
far the most attractive destination for students, taking in 30
percent of the total number of foreign students globally, and its
collaborations between business and educational institutions are
unmatched anywhere in the world. All these advantages will not
be erased easily, because the structure of European and Japanese
universities – mostly state-run bureaucracies – is unlikely to
change. And although China and India are opening new
institutions, it is not that easy to create a world-class university
out of whole cloth in a few decades.

“Few people believe that U.S. primary and secondary schools
deserve similar praise. The school system, the line goes, is in
crisis, with its students performing particularly badly in science
and math, year after year, in international rankings. But the
statistics here, although not wrong, reveal something slightly
different. The real problem is one not of excellence but of
access. The Trends in International Mathematics and Science
Study (TIMSS), the standard for comparing educational
programs across nations, puts the United States squarely in the
middle of the pack. The media reported the news with a
predictable penchant for direness: ‘Economic Time Bomb: U.S.
Teens Are Among Worst at Math,’ declared the Wall Street
Journal.

“But the aggregate scores hide deep regional, racial, and
socioeconomic variation. Poor and minority students score well
below the U.S. average, while, as one study noted, ‘students in
affluent suburban U.S. school districts score nearly as well as
students in Singapore, the runaway leader on TIMSS math
scores.’ The difference between the average science scores in
poor and wealthy school districts within the United States, for
instance, is four to five times as high as the difference between
the U.S. and the Singaporean national average. In other words,
the problem with U.S. education is a problem of inequality. This
will, over time, translate into a competitiveness problem, because
if the United States cannot educate and train a third of the
working population to compete in a knowledge economy, this
will drag down the country. But it does know what works.”

Hot Spots will return June 19.

Brian Trumbore