Biodun Iginla, BBC News

Biodun Iginla, BBC News
Showing posts with label Modern technology. Show all posts
Showing posts with label Modern technology. Show all posts

Thursday, January 12, 2017

Equipping people to stay ahead of technological change

Learning and earning


It is easy to say that people need to keep learning throughout their careers. The practicalities are daunting




WHEN education fails to keep pace with technology, the result is inequality. Without the skills to stay useful as innovations arrive, workers suffer—and if enough of them fall behind, society starts to fall apart. That fundamental insight seized reformers in the Industrial Revolution, heralding state-funded universal schooling. Later, automation in factories and offices called forth a surge in college graduates. The combination of education and innovation, spread over decades, led to a remarkable flowering of prosperity.
Today robotics and artificial intelligence call for another education revolution. This time, however, working lives are so lengthy and so fast-changing that simply cramming more schooling in at the start is not enough. People must also be able to acquire new skills throughout their careers.
Unfortunately, as our special report in this issue sets out, the lifelong learning that exists today mainly benefits high achievers—and is therefore more likely to exacerbate inequality than diminish it. If 21st-century economies are not to create a massive underclass, policymakers urgently need to work out how to help all their citizens learn while they earn. So far, their ambition has fallen pitifully short.
Machines or learning
The classic model of education—a burst at the start and top-ups through company training—is breaking down. One reason is the need for new, and constantly updated, skills. Manufacturing increasingly calls for brain work rather than metal-bashing (see Briefing). The share of the American workforce employed in routine office jobs declined from 25.5% to 21% between 1996 and 2015. The single, stable career has gone the way of the Rolodex.
Pushing people into ever-higher levels of formal education at the start of their lives is not the way to cope. Just 16% of Americans think that a four-year college degree prepares students very well for a good job. Although a vocational education promises that vital first hire, those with specialised training tend to withdraw from the labour force earlier than those with general education—perhaps because they are less adaptable.
At the same time on-the-job training is shrinking. In America and Britain it has fallen by roughly half in the past two decades. Self-employment is spreading, leaving more people to take responsibility for their own skills. Taking time out later in life to pursue a formal qualification is an option, but it costs money and most colleges are geared towards youngsters.
The market is innovating to enable workers to learn and earn in new ways. Providers from General Assembly to Pluralsight are building businesses on the promise of boosting and rebooting careers. Massive open online courses (MOOCs) have veered away from lectures on Plato or black holes in favour of courses that make their students more employable. At Udacity and Coursera self-improvers pay for cheap, short programmes that bestow “microcredentials” and “nanodegrees” in, say, self-driving cars or the Android operating system. By offering degrees online, universities are making it easier for professionals to burnish their skills. A single master’s programme from Georgia Tech could expand the annual output of computer-science master’s degrees in America by close to 10%.
Such efforts demonstrate how to interleave careers and learning. But left to its own devices, this nascent market will mainly serve those who already have advantages. It is easier to learn later in life if you enjoyed the classroom first time around: about 80% of the learners on Coursera already have degrees. Online learning requires some IT literacy, yet one in four adults in the OECD has no or limited experience of computers. Skills atrophy unless they are used, but many low-end jobs give workers little chance to practise them.
Shampoo technician wanted
If new ways of learning are to help those who need them most, policymakers should be aiming for something far more radical. Because education is a public good whose benefits spill over to all of society, governments have a vital role to play—not just by spending more, but also by spending wisely.
Lifelong learning starts at school. As a rule, education should not be narrowly vocational. The curriculum needs to teach children how to study and think. A focus on “metacognition” will make them better at picking up skills later in life.
But the biggest change is to make adult learning routinely accessible to all. One way is for citizens to receive vouchers that they can use to pay for training. Singapore has such “individual learning accounts”; it has given money to everyone over 25 to spend on any of 500 approved courses. So far each citizen has only a few hundred dollars, but it is early days.
Courses paid for by taxpayers risk being wasteful. But industry can help by steering people towards the skills it wants and by working with MOOCs and colleges to design courses that are relevant. Companies can also encourage their staff to learn. AT&T, a telecoms firm which wants to equip its workforce with digital skills, spends $30m a year on reimbursing employees’ tuition costs. Trade unions can play a useful role as organisers of lifelong learning, particularly for those—workers in small firms or the self-employed—for whom company-provided training is unlikely. A union-run training programme in Britain has support from political parties on the right and left.
To make all this training worthwhile, governments need to slash the licensing requirements and other barriers that make it hard for newcomers to enter occupations. Rather than asking for 300 hours’ practice to qualify to wash hair, for instance, the state of Tennessee should let hairdressers decide for themselves who is the best person to hire.
Not everyone will successfully navigate the shifting jobs market. Those most at risk of technological disruption are men in blue-collar jobs, many of whom reject taking less “masculine” roles in fast-growing areas such as health care. But to keep the numbers of those left behind to a minimum, all adults must have access to flexible, affordable training. The 19th and 20th centuries saw stunning advances in education. That should be the scale of the ambition today.

Thursday, September 15, 2016

The superstar company


A giant problem

The rise of the corporate colossus threatens both competition and the legitimacy of business



DISRUPTION may be the buzzword in boardrooms, but the most striking feature of business today is not the overturning of the established order. It is the entrenchment of a group of superstar companies at the heart of the global economy. Some of these are old firms, like GE, that have reinvented themselves. Some are emerging-market champions, like Samsung, which have seized the opportunities provided by globalisation. The elite of the elite are high-tech wizards—Google, Apple, Facebook and the rest—that have conjured up corporate empires from bits and bytes.
As our special report this week makes clear, the superstars are admirable in many ways. They churn out products that improve consumers’ lives, from smarter smartphones to sharper televisions. They provide Americans and Europeans with an estimated $280 billion-worth of “free” services—such as search or directions—a year. But they have two big faults. They are squashing competition, and they are using the darker arts of management to stay ahead. Neither is easy to solve. But failing to do so risks a backlash which will be bad for everyone. 
More concentration, less focus
Bulking up is a global trend. The annual number of mergers and acquisitions is more than twice what it was in the 1990s. But concentration is at its most worrying in America. The share of GDP generated by America’s 100 biggest companies rose from about 33% in 1994 to 46% in 2013. The five largest banks account for 45% of banking assets, up from 25% in 2000. In the home of the entrepreneur, the number of startups is lower than it has been at any time since the 1970s. More firms are dying than being born. Founders dream of selling their firms to one of the giants rather than of building their own titans.
For many laissez-faire types this is only a temporary problem. Modern technology is lowering barriers to entry; flaccid incumbents will be destroyed by smaller, leaner ones. But the idea that market concentration is self-correcting is more questionable than it once was. Slower growth encourages companies to buy their rivals and squeeze out costs. High-tech companies grow more useful to customers when they attract more users and when they gather ever more data about those users.
The heft of the superstars also reflects their excellence at less productive activities. About 30% of global foreign direct investment (FDI) flows through tax havens; big companies routinely use “transfer pricing” to pretend that profits generated in one part of the world are in fact made in another. The giants also deploy huge armies of lobbyists, bringing the same techniques to Brussels, where 30,000 lobbyists now walk the corridors, that they perfected in Washington, DC. Laws such as Sarbanes-Oxley and Dodd-Frank, to say nothing of America’s tax code, penalise small firms more than large ones.
None of this helps the image of big business. Paying tax seems to be unavoidable for individuals but optional for firms. Rules are unbending for citizens, and up for negotiation when it comes to companies. Nor do profits translate into jobs as once they did. In 1990 the top three carmakers in Detroit had a market capitalisation of $36 billion and 1.2m employees. In 2014 the top three firms in Silicon Valley, with a market capitalisation of over $1 trillion, had only 137,000 employees.
Anger at all this is understandable, but an inchoate desire to bash business leaves everyone worse off. Disenchantment with pro-business policies, particularly liberal immigration rules, helped the “outs” to win the Brexit referendum in Britain and Donald Trump to seize the Republican nomination. Protectionism and nativism will only lower living standards. Reining in the giants requires the scalpel, not the soapbox.
That means a tough-but-considered approach to issues such as tax avoidance. The OECD countries have already made progress in drawing up common rules to prevent companies from parking money in tax havens, for example. They have more to do, not least to address the convenient fiction that different units of multinationals are really separate companies. But better the grind of multilateral negotiation than moves such as the European Commission’s recent attempt to impose retrospective taxes on Apple in Ireland.
Concentration is an even harder problem. America in particular has got into the habit of giving the benefit of the doubt to big business. This made some sense in the 1980s and 1990s when giant companies such as General Motors and IBM were being threatened by foreign rivals or domestic upstarts. It is less defensible now that superstar firms are gaining control of entire markets and finding new ways to entrench themselves.
Prudent policymakers must reinvent antitrust for the digital age. That means being more alert to the long-term consequences of large firms acquiring promising startups. It means making it easier for consumers to move their data from one company to another, and preventing tech firms from unfairly privileging their own services on platforms they control (an area where the commission, in its pursuit of Google, deserves credit). And it means making sure that people have a choice of ways of authenticating their identity online.
1917 and all that
The rise of the giants is a reversal of recent history. In the 1980s big companies were on the retreat, as Margaret Thatcher and Ronald Reagan took a wrecking ball to state-protected behemoths such as AT&T and British Leyland. But there are some worrying similarities to a much earlier era. In 1860-1917 the global economy was reshaped by the rise of giant new industries (steel and oil) and revolutionary new technologies (electricity and the combustion engine). These disruptions led to brief bursts of competition followed by prolonged periods of oligopoly. The business titans of that age reinforced their positions by driving their competitors out of business and cultivating close relations with politicians. The backlash that followed helped to destroy the liberal order in much of Europe.
So, by all means celebrate the astonishing achievements of today’s superstar companies. But also watch them. The world needs a healthy dose of competition to keep today’s giants on their toes and to give those in their shadow a chance to grow.